<SUBMISSION>
<ACCESSION-NUMBER>0000950123-09-068115
<TYPE>S-11/A
<PUBLIC-DOCUMENT-COUNT>27
<FILING-DATE>20091203
<DATE-OF-FILING-DATE-CHANGE>20091203
<FILER>
<COMPANY-DATA>
<CONFORMED-NAME>Pebblebrook Hotel Trust
<CIK>0001474098
<ASSIGNED-SIC>6798
<IRS-NUMBER>271055421
<STATE-OF-INCORPORATION>MD
<FISCAL-YEAR-END>1231
</COMPANY-DATA>
<FILING-VALUES>
<FORM-TYPE>S-11/A
<ACT>33
<FILE-NUMBER>333-162412
<FILM-NUMBER>091220943
</FILING-VALUES>
<BUSINESS-ADDRESS>
<STREET1>10319 WESTLAKE DRIVE
<STREET2>SUITE 112
<CITY>BETHESDA
<STATE>MD
<ZIP>20817
<PHONE>301.765.6045
</BUSINESS-ADDRESS>
<MAIL-ADDRESS>
<STREET1>10319 WESTLAKE DRIVE
<STREET2>SUITE 112
<CITY>BETHESDA
<STATE>MD
<ZIP>20817
</MAIL-ADDRESS>
</FILER>
<DOCUMENT>
<TYPE>S-11/A
<SEQUENCE>1
<FILENAME>w75877a3sv11za.htm
<DESCRIPTION>S-11/A
<TEXT>
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<TITLE>sv11za</TITLE>
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<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>As filed with the Securities and Exchange Commission on
    December&#160;3, 2009</B>
</DIV>

<DIV align="right" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Registration No.&#160;333-162412</B>
</DIV>

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<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 13pt">UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">Washington,&#160;D.C.
    20549</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

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<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">Amendment No.&#160;3</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 12pt">to</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 16pt"><FONT style="white-space: nowrap">Form&#160;S-11</FONT></FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 11pt">FOR REGISTRATION</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 11pt">UNDER</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 11pt">THE SECURITIES ACT OF
    1933</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 11pt">OF SECURITIES</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 11pt">OF CERTAIN REAL ESTATE
    COMPANIES</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 16%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=90 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 22pt">PEBBLEBROOK HOTEL
    TRUST</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="font-size: 7pt">(Exact name of registrant as
    specified in governing instruments)</FONT></I>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 16%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=540 length=90 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 9pt">10319&#160;Westlake Drive,
    Suite&#160;112</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 9pt">Bethesda, MD 20817</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 9pt">(301)&#160;765-6045</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="font-size: 7pt">(Address, including zip code,
    and telephone number, including area code, of registrant&#146;s
    principal executive offices)</FONT></I>
</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 9pt">Jon E. Bortz</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 9pt">Chairman, President and Chief
    Executive Officer</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 9pt">10319&#160;Westlake Drive,
    Suite&#160;112</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 9pt">Bethesda, MD 20817</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 9pt">(301)&#160;765-6045</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I><FONT style="font-size: 7pt">(Name, address, including zip
    code, and telephone number, including area code, of agent for
    service)</FONT></I>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

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<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><I><FONT style="font-size: 9pt">Copies to:</FONT></I></B>
</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
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<TD align="center" valign="top">
    <B>David C. Wright<BR>
    Hunton &#038; Williams LLP<BR>
    Riverfront Plaza, East Tower<BR>
    951&#160;E.&#160;Byrd Street<BR>
    Richmond, Virginia 23219-4074<BR>
    (804)&#160;788-8200<BR>
    (804)&#160;788-8218 (Telecopy)</B>
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    <B>James O&#146;Connor<BR>
    Bartholomew A. Sheehan<BR>
    Sidley Austin LLP<BR>
    787 Seventh Avenue<BR>
    New York, New York 10019<BR>
    (212) 839-5300<BR>
    (212) 839-5599 (Telecopy) </B>
</TD>
</TR>
</TABLE>

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</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Approximate date of commencement of proposed sale to the
    public:</B>&#160;&#160;As soon as practicable after the
    effective date of this Registration Statement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If any of the Securities registered on this Form are to be
    offered on a delayed or continuous basis pursuant to
    Rule&#160;415 under the Securities Act, check the following
    box:&#160;&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If this Form is filed to register additional securities for an
    offering pursuant to Rule&#160;462(b) under the Securities Act,
    check the following box and list the Securities Act registration
    statement number of the earlier effective registration statement
    for the same
    offering.&#160;&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If this Form is a post-effective amendment filed pursuant to
    Rule&#160;462(c) under the Securities Act, check the following
    box and list the Securities Act registration statement number of
    the earlier effective registration statement for the same
    offering.&#160;&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If this Form is a post-effective amendment filed pursuant to
    Rule&#160;462(d) under the Securities Act, check the following
    box and list the Securities Act registration statement number of
    the earlier effective registration statement for the same
    offering.&#160;&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If delivery of the prospectus is expected to be made pursuant to
    Rule&#160;434, please check the following
    box.&#160;&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Indicate by check mark whether the registrant is a large
    accelerated filer, an accelerated filer, a non-accelerated
    filer, or a smaller reporting company. See the definitions of
    &#147;large accelerated filer,&#148; &#147;accelerated
    filer&#148; and &#147;smaller reporting company&#148; in Rule
    12b-2 of the Exchange Act. (Check one):
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
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    <TD width="12%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="5%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="31%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="5%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="21%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
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<DIV style="text-indent: -9pt; margin-left: 9pt">
    Large&#160;accelerated&#160;filer&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Accelerated&#160;filer&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    <FONT style="white-space: nowrap">Non-accelerated&#160;filer&#160;</FONT><FONT style="font-family: Wingdings; font-variant: normal">&#254;
    </FONT>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    Smaller&#160;Reporting&#160;company&#160;<FONT style="font-family: Wingdings; font-variant: normal">&#111;
    </FONT>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
    (Do&#160;not&#160;check&#160;if&#160;a&#160;smaller&#160;reporting&#160;company)
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

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<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 6%; font-size: 9pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>The Registrant hereby amends this Registration Statement on
    such date or dates as may be necessary to delay its effective
    date until the Registrant shall file a further amendment which
    specifically states that this Registration Statement shall
    thereafter become effective in accordance with Section&#160;8(a)
    of the Securities Act of 1933 or until the Registration
    Statement shall become effective on such date as the Commission,
    acting pursuant to said Section&#160;8(a), may determine.</B>
</DIV>

<DIV style="margin-top: 5pt; font-size: 1pt">&nbsp;</DIV>

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<TABLE style="color: #FF0000" width="100%" border="1" cellpadding="5"><TR><TD style=text-align:justify>
<FONT style="font-size: 10pt; color: #E8112D">The information in
this prospectus is not complete and may be changed. We may not
sell these securities until the registration statement filed
with the Securities and Exchange Commission is effective. This
prospectus is not an offer to sell these securities, and it is
not soliciting an offer to buy these securities in any state
where the offer or sale is not permitted.<BR>
</FONT>
</TD></TR></TABLE>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 91%; margin-left: 4%"><!-- BEGIN PAGE WIDTH -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="color: #E8112D">Subject to Completion</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="color: #E8112D"> Preliminary Prospectus dated
    December&#160;3, 2009</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><U>PROSPECTUS</U></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 18pt">17,500,000&#160;Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="w75877a3w7587711.gif" alt="(PEBBLE BROOK HOTEL TRUST LOGO)"><FONT style="font-size: 18pt">
    </FONT>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 14pt">Common Shares</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



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<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pebblebrook Hotel Trust is an internally managed hotel
    investment company recently organized to opportunistically
    acquire and invest in hotel properties.
</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This is the initial public offering of our common shares of
    beneficial interest, $0.01&#160;par value per share, or common
    shares. We expect the initial public offering price of our
    common shares to be $20.00 per share. Prior to this offering,
    there has been no public market for our common shares. We intend
    to apply to list our common shares on the New York Stock
    Exchange under the symbol &#147;PEB.&#148;
</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Concurrently with this offering, in a separate private
    placement, we will sell an aggregate of 135,000 common shares to
    Jon E. Bortz, our Chairman, President and Chief Executive
    Officer, and Raymond D. Martz, our Executive Vice President and
    Chief Financial Officer, at the public offering price per share
    shown below.
</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to elect and qualify to be taxed as a real estate
    investment trust, or REIT, for federal income tax purposes. To
    assist us in qualifying as a REIT, among other reasons,
    ownership of our outstanding common shares by any person is
    limited to 9.8%, subject to certain exceptions. In addition, our
    declaration of trust contains various other restrictions on the
    ownership and transfer of our common shares.
</DIV>

<DIV style="margin-top: 1pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 12pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>Investing in our common shares involves risks. You should
    read the section entitled &#147;Risk Factors&#148; beginning on
    page&#160;11 of this prospectus for a discussion of the
    following and other risks that you should consider before
    investing in our common shares:</B>
</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="4%"></TD>
    <TD width="89%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    We have no operating history and have no agreements to acquire
    any hotel properties. We have not identified any specific hotel
    properties to acquire or committed the net proceeds of this
    offering and the concurrent private placement to any specific
    hotel property investment. Investors will not be able to
    evaluate the economic merits of any investments we make with the
    net proceeds prior to purchasing common shares in this offering.
    We may be unable to invest the proceeds on acceptable terms, or
    at all.
</TD>
</TR>





<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    Our success will depend upon the efforts and expertise of our
    existing and future management team. The loss of their services
    could have an adverse impact on our business.
</TD>
</TR>


<TR style="line-height: 2pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    Failure of lodging industry fundamentals to improve may
    adversely affect our ability to execute our business strategy.
</TD>
</TR>





<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    In order to qualify as a REIT, we will not be able to operate
    our hotels, and our returns will depend on the management of our
    hotels by third-party hotel management companies.
</TD>
</TR>





<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    Our failure to qualify as a REIT would result in higher taxes
    and reduced cash available for distribution to our shareholders
    and may have significant adverse consequences on the market
    price of our common shares.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<CENTER style="font-size: 1pt; width: 17%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=504 length=90 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="78%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="3%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="10%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Per Share</B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Total</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Public offering price
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Underwriting discount(1)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Proceeds, before expenses, to us
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>



<DIV style="font-size: 12pt; margin-left: 0%; width: 9%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=504 length=48 -->



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    <FONT style="font-size: 8pt">(1)
    </FONT></TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 8pt">At the closing of this offering,
    the underwriters will be entitled to receive
    $&#160;&#160;&#160;&#160;&#160; from us for each share sold in
    this offering. The underwriters will forego the receipt of
    payment of $&#160;&#160;&#160;&#160;&#160; per share, until such
    time as we purchase assets in accordance with our investment
    strategy as described in this prospectus with an aggregate
    purchase price (including the amount of any outstanding
    indebtedness assumed or incurred by us) at least equal to the
    net proceeds from this offering (after deducting the full
    underwriting discount and other estimated offering expenses
    payable by us), at which time, we have agreed to pay the
    underwriters an amount equal to $&#160;&#160;&#160;&#160;&#160;
    per share sold in this offering. See &#147;Underwriting.&#148;
    </FONT></TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriters may also purchase up to an additional 2,625,000
    common shares from us, at the public offering price, less the
    underwriting discount, within 30&#160;days from the date of this
    prospectus to cover overallotments, if any.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Neither the Securities and Exchange Commission nor any state
    securities commission has approved or disapproved of these
    securities or determined if this prospectus is truthful or
    complete. Any representation to the contrary is a criminal
    offense.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The common shares will be ready for delivery on or about
    December&#160;&#160;&#160;, 2009.
</DIV>



<CENTER style="font-size: 1pt; width: 17%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=504 length=90 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
    <TD width="33%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">    <B><FONT style="font-size: 18pt; font-family: 'Times New Roman', Times">BofA
    Merrill Lynch</FONT></B></TD>
    <TD nowrap align="center">    <B><FONT style="font-size: 18pt; font-family: 'Times New Roman', Times">
    Raymond James</FONT></B></TD>
    <TD nowrap align="right">    <B><FONT style="font-size: 18pt; font-family: 'Times New Roman', Times">
    Wells Fargo Securities</FONT></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 17%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=504 length=90 -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="50%"></TD>
    <TD width="50%"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">    <B><FONT style="font-size: 16pt; font-family: 'Times New Roman', Times">Calyon
    Securities (USA) Inc.</FONT></B></TD>
    <TD nowrap align="right">    <B><FONT style="font-size: 16pt; font-family: 'Times New Roman', Times">
    RBC Capital Markets</FONT></B></TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 17%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=504 length=90 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The date of this prospectus is December&#160;&#160;&#160;, 2009.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 91%; margin-left: 4%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">TABLE OF
    CONTENTS</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>
<DIV align="left">
<!-- TOC -->
</DIV>

<DIV align="left">
<A name="tocpage"></A>
</DIV>


<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="95%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#101'>PROSPECTUS SUMMARY</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#102'>RISK FACTORS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    11
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#103'>CAUTIONARY NOTE&#160;REGARDING FORWARD-LOOKING
    STATEMENTS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    34
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#104'>USE OF PROCEEDS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    35
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#105'>CAPITALIZATION</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    36
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#106'>OUR DISTRIBUTION POLICY</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    37
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#107'>OUR BUSINESS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    38
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#108'>MANAGEMENT&#146;S DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    50
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#109'>OUR MANAGEMENT</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    54
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#110'>INVESTMENT POLICIES AND POLICIES WITH RESPECT TO
    CERTAIN ACTIVITIES</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    65
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#111'>OUR PRINCIPAL SHAREHOLDERS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    68
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#112'>CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    69
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#113'>DESCRIPTION OF SHARES OF BENEFICIAL INTEREST</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    70
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#114'>SHARES ELIGIBLE FOR FUTURE SALE</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    74
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#115'>CERTAIN PROVISIONS OF MARYLAND LAW AND OF OUR
    DECLARATION OF TRUST&#160;AND BYLAWS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    76
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#116'>OUR OPERATING PARTNERSHIP AND THE PARTNERSHIP
    AGREEMENT</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    81
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#117'>MATERIAL FEDERAL INCOME TAX CONSIDERATIONS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    86
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#118'>ERISA CONSIDERATIONS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    111
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#119'>UNDERWRITING</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    112
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#120'>LEGAL MATTERS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
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    117
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</TD>
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<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#121'>EXPERTS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
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    117
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</TD>
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<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#122'>WHERE YOU CAN FIND MORE INFORMATION</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
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    117
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<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#123'>REPORTS TO SHAREHOLDERS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
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    118
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</TD>
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<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#124'>INDEX TO FINANCIAL STATEMENTS</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    F-1
</TD>
<TD>&nbsp;
</TD>
</TR>
</TABLE>

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<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

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<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    You should rely only on the information contained in this
    prospectus, any free writing prospectus prepared by us or
    information to which we have referred you. We have not, and the
    underwriters have not, authorized any other person to provide
    you with different information. If anyone provides you with
    different or inconsistent information, you should not rely on
    it. We are not, and the underwriters are not, making an offer to
    sell these securities in any jurisdiction where the offer or
    sale is not permitted. You should assume that the information
    appearing in this prospectus is accurate only as of the date on
    the front cover of this prospectus or another date specified
    herein. Our business, financial condition and prospects may have
    changed since such dates.
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    <B><FONT style="font-family: 'Times New Roman', Times">PROSPECTUS
    SUMMARY</FONT></B>
</DIV>

</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>The following summary highlights information contained
    elsewhere in this prospectus. This summary is not complete and
    does not contain all of the information that you should consider
    before investing in our common shares. You should read the
    entire prospectus, including &#147;Risk Factors,&#148; before
    making a decision to invest in our common shares. In this
    prospectus, references to &#147;our company,&#148;
    &#147;we,&#148; &#147;us&#148; and &#147;our&#148; mean
    Pebblebrook Hotel Trust, a Maryland real estate investment
    trust, and our consolidated subsidiaries, including Pebblebrook
    Hotel, L.P., a Delaware limited partnership, the subsidiary
    through which we will conduct our business and which we refer to
    as our operating partnership, except where it is clear from the
    context that the term means only the issuer of the common
    shares, Pebblebrook Hotel Trust. References to the
    &#147;concurrent private placement&#148; mean the private
    placement, concurrent with this offering, in which we will sell
    an aggregate of 135,000 common shares to Jon E. Bortz, our
    Chairman, President and Chief Executive Officer, and Raymond D.
    Martz, our Executive Vice President and Chief Financial Officer,
    at the public offering price per share shown on the cover page
    of this prospectus. Unless otherwise indicated, the information
    contained in this prospectus assumes that the underwriters&#146;
    overallotment option is not exercised.</I>
</DIV>


<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    Company</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are an internally managed hotel investment company recently
    organized by our Chairman, President and Chief Executive
    Officer, Jon&#160;E. Bortz, to opportunistically acquire and
    invest in hotel properties located primarily in major United
    States cities, with an emphasis on the major coastal markets. As
    a result of construction costs and density, these markets have
    significant barriers to entry and, as shown in historical
    industry data, we believe these markets will experience the most
    robust recovery in meeting and room-night demand as the U.S.
    economy improves. In addition, we may invest in resort
    properties located near our primary urban target markets, as
    well as in select destination markets such as Hawaii, south
    Florida and southern California. We will seek geographic
    diversity in our investments, although attractive opportunities
    will be more important than geographic mix in our investment
    activity. We intend to focus on full-service hotel properties in
    the &#147;upper upscale&#148; segment of the lodging industry as
    defined by Smith Travel Research, Inc., or Smith Travel
    Research. In addition, we may seek to acquire branded, upscale,
    select-service properties in our primary urban target markets.
    We believe that these investments can produce attractive
    risk-adjusted returns because we expect (i)&#160;to acquire
    properties at cyclically low prices in the current economic and
    financing environment and (ii)&#160;the properties we purchase
    will benefit from increasing business and leisure travel as the
    economy improves. We currently do not own any hotel properties
    and have no properties under contract. We intend to elect and
    qualify to be taxed as a real estate investment trust, or REIT,
    for federal income tax purposes.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe that the current market environment will present a
    significant number of attractive investment opportunities and
    that our management team will have the experience and expertise
    necessary to acquire a high-quality portfolio of hotel
    properties. Our management team will be led by Mr.&#160;Bortz,
    the founder and former Chairman of the Board of Trustees and
    Chief Executive Officer of LaSalle Hotel Properties, a
    NYSE-listed hotel REIT. Prior to that, he founded and led Jones
    Lang LaSalle&#146;s Hotel Investment Group. Mr.&#160;Bortz has
    28&#160;years of lodging and real estate experience, having
    overseen more than $2.5&#160;billion of lodging-related
    transactions.
</DIV>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon completion of this offering and the concurrent private
    placement to Messrs. Bortz and Martz, we will have approximately
    $330&#160;million to invest in hotel properties and we will have
    no outstanding indebtedness. Accordingly, we believe we will be
    well-positioned to take advantage of attractive investment
    opportunities that we expect will be available in the lodging
    industry.
</DIV>


<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Market
    Opportunity</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The U.S.&#160;hotel industry has experienced substantial
    declines in fundamentals as a result of the global economic
    recession and its adverse impact on business and leisure travel.
    We believe that the significant number of hotel properties
    experiencing substantial declines in operating cash flow,
    coupled with the challenged credit markets, near-term debt
    maturities and, in some instances, covenant defaults relating to
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    outstanding indebtedness, will present attractive investment
    opportunities in the lodging industry. Accordingly, we believe
    the following factors will provide well-capitalized investors,
    such as our company, the opportunity to acquire high-quality
    hotel properties at prices significantly below replacement cost,
    with substantial appreciation potential as the U.S.&#160;economy
    recovers from the current recession:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    <I>Significant Debt Defaults.</I>&#160;&#160;Cash flow at many
    hotel properties has declined or will likely decline to levels
    that are inadequate to support required debt service payments or
    that violate applicable covenants. Real Capital Analytics
    estimates that, as of September&#160;30, 2009, there are over
    1,100 hotel properties in distress (which includes default,
    <FONT style="white-space: nowrap">deed-in-lieu,</FONT>
    forced sales, foreclosure or bankruptcy), having an estimated
    aggregate value of approximately $29&#160;billion. We believe
    many of these hotel properties will be sold by lenders after
    foreclosure, while in receivership or in cooperation with the
    borrower.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    <I>Maturity Defaults and Lack of Available
    Financing.</I>&#160;&#160;According to Standard&#160;&#038;
    Poor&#146;s, hotel-related commercial mortgage-backed
    securities, or CMBS, with an aggregate principal amount of
    approximately $21&#160;billion are scheduled to mature over the
    next three years. In the current recessionary environment,
    traditional lending sources, such as banks, insurance companies
    and pension funds have adopted more conservative lending
    policies and have materially decreased new lending commitments
    to hotel properties. We believe the current and projected cash
    flows at many hotel properties, when coupled with more
    conservative lending policies, will only support mortgage
    financing that is significantly less than the amounts currently
    borrowed against such properties. As a result, we expect many
    owners of hotel properties will be unable to refinance maturing
    debt without significant additional equity investment, which may
    result in sales or foreclosures.
</TD>
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<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    <I>Under-Capitalized Owners.</I>&#160;&#160;Maintaining a
    hotel&#146;s physical condition at the levels required by major
    hotel brands often requires significant capital investment. This
    is particularly true for hotels in urban markets and in the
    upper upscale segment of the lodging industry, where we intend
    to focus our investment activity. We believe cash flow after
    debt service at many hotel properties may be insufficient to
    fund necessary capital expenditures and their owners may face
    capital investment demands that could require additional equity
    investments. We believe some hotel owners will be unable or
    unwilling to make the required equity investments and may choose
    or be compelled to sell their hotels.
</TD>
</TR>

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<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Competitive
    Strengths</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect the following factors will benefit our company as we
    implement our business strategy:
</DIV>


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    <TD width="87%"></TD>
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<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    <I>Experienced Leadership.</I>&#160;&#160;Our senior executive
    management team will be led by our Chairman, President and Chief
    Executive Officer, Mr.&#160;Bortz, who has a proven track record
    and substantial experience in the hotel industry. Mr.&#160;Bortz
    has 28&#160;years of lodging and real estate experience,
    including expertise in hotel and resort property acquisitions,
    divestitures, repositioning, redevelopment, asset management,
    branding and financing. Our company represents
    Mr.&#160;Bortz&#146;s third lodging investment vehicle and his
    second publicly listed venture. He most recently served as Chief
    Executive Officer of LaSalle Hotel Properties, an internally
    managed, NYSE-listed hotel REIT, from its inception in April
    1998 and as the Chairman of its Board of Trustees from January
    2001 until his retirement in September 2009. Prior to LaSalle
    Hotel Properties, Mr.&#160;Bortz founded and led Jones Lang
    LaSalle&#146;s Hotel Investment Group, which acquired 15 hotels
    over his four-year tenure as its President. Through his past
    professional experiences, Mr.&#160;Bortz has developed strong
    relationships with hotel owners, management companies, brand
    companies, brokers, lenders and institutional investors. Our
    Executive Vice President and Chief Financial Officer,
    Raymond&#160;D. Martz, has over 15&#160;years&#146; experience
    in the hotel and real estate industries, including having served
    as Chief Financial Officer in his last two positions and in
    senior finance positions at two NYSE-listed hotel REITs.
</TD>
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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    <I>Proven Acquirer with Strong Track Record of
    Growth.</I>&#160;&#160;Throughout his career, Mr.&#160;Bortz has
    demonstrated the ability to acquire, redevelop and reposition
    hotel properties. During Mr.&#160;Bortz&#146;s tenure as Chief
    Executive Officer of LaSalle Hotel Properties, he led
    transactions totaling $2.5&#160;billion in asset value. During
    this period, LaSalle Hotel Properties&#146; portfolio increased
    from 10 hotel properties at the time of its initial public
    offering in April 1998 to 31 properties with over 8,400 rooms at
    the time of Mr.&#160;Bortz&#146;s retirement in September 2009.
    In aggregate, Mr.&#160;Bortz oversaw the acquisition of 42 hotel
    and resort properties during his leadership tenure at LaSalle
    Hotel Properties and Jones Lang LaSalle&#146;s Hotel Investment
    Group. Mr.&#160;Bortz also established a strong capital sourcing
    network while at LaSalle Hotel Properties, overseeing that
    company&#146;s raising of more than $3.0&#160;billion of debt
    and equity capital to finance its significant growth over the
    past 11&#160;years. During Mr. Bortz&#146;s tenure at LaSalle
    Hotel Properties, that company experienced significant
    challenges resulting from severe industry downturns, such as the
    periods following September&#160;11, 2001 and the global
    recession beginning in August 2008, during which LaSalle Hotel
    Properties reduced dividend distributions and capital
    investments due to substantial declines in revenues and earnings.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    <I>Focused Property Investment Strategy.</I>&#160;&#160;Industry
    analysts project that growth in revenue per available room, or
    RevPAR, will turn positive in 2011, thereby improving
    profitability. In accordance with such forecasts, we believe
    that when the U.S. economy begins to stabilize and generate
    positive growth in U.S.&#160;gross domestic product, or GDP,
    transient and group travel is likely to rebound, allowing hotel
    owners to grow occupancy as demand growth exceeds diminishing
    supply growth, leading to increasing average daily rates. We
    intend to invest primarily in upper upscale, full-service,
    branded and independent hotels in major U.S.&#160;cities, with
    an emphasis on the major coastal markets, where we believe there
    are significant barriers to entry for new hotel supply and
    meeting and room-night demand will experience the most robust
    recovery as the U.S.&#160;economy improves. In addition, we
    expect to acquire resort properties located near our primary
    urban target markets as well as in select, unique destination
    markets. We may also invest in branded, upscale, select-service
    hotels in premium urban locations in these major cities. Within
    these markets, we intend to establish a diversified customer
    base by investing in urban, resort and convention hotels, each
    of which typically has a different mix of business transient,
    leisure transient and group and convention customers, all of
    which follow different demand trends.
</TD>
</TR>


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<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    <I>Flexible and Diversified Operating Strategy with No Legacy
    Issues.</I>&#160;&#160;Upon completion of this offering and the
    concurrent private placement, we will have no outstanding
    indebtedness and approximately $330&#160;million available for
    investment. While we expect our capital structure to ultimately
    include indebtedness as described in this prospectus, we do not
    intend to use significant leverage until after we have invested
    substantially all of the net proceeds of this offering and the
    concurrent private placement. As a newly formed company with no
    properties or operating history, we do not have the burden and
    distraction of legacy operating or legacy leverage issues that
    have adversely affected many existing hotel companies during the
    recent industry downturn, such as properties suffering from
    significant declines in cash flows or mortgage loan defaults.
    Since we are not affiliated with any hotel management company
    and have no contractual obligations to any particular hotel
    manager, we plan to retain multiple branded and independent
    third-party hotel management companies to operate our hotels,
    based on our assessment of the operator most beneficial for each
    property. We believe this strategy of retaining multiple hotel
    managers will assist us in identifying best practices that we
    will implement across our portfolio, as appropriate. We intend
    to enter into management contracts with third-party hotel
    management companies for the operation of our hotels. We expect
    that, in general, these contracts will have initial terms of
    five to ten years and require us to pay each management company
    a base management fee, typically in a range of 3% to 4% of total
    hotel revenues, and may provide for
    <FONT style="white-space: nowrap">agreed-upon</FONT>
    performance-based compensation to the management company. We
    expect that performance-based compensation will be negotiated on
    a hotel by hotel basis, but will typically range from 10% to 20%
    of hotel operating income or adjusted
</TD>
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    <TD>&nbsp;</TD>
    <TD>
</TD>
    <TD align="left">
     hotel operating income, with either a fixed negotiated nominal
    threshold or nominal thresholds that vary or increase by year
    based on third-party hotel manager forecasts or
    <FONT style="white-space: nowrap">agreed-upon</FONT>
    projections of hotel performance. Further, we will seek
    management contracts that provide us with the ability to
    (i)&#160;terminate the management contract and replace an
    operator if specified levels of operating performance are not
    satisfied, or at will; (ii)&#160;reposition a hotel if we
    determine to do so; and (iii)&#160;terminate the management
    contract in connection with a sale of the hotel, which we
    believe may facilitate the sale of a hotel. Periodically, we may
    sell a hotel on an opportunistic basis if we believe sales
    proceeds may be invested in hotel properties that offer more
    attractive risk-return profiles. We expect to negotiate the
    termination fees payable to the hotel manager on a hotel by
    hotel basis, but would expect the termination fees to range from
    a relatively nominal fee to up to the sum of three years&#146;
    annual base management fees plus performance-based compensation.
</TD>
</TR>

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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    <I>Intensive Asset Management.</I>&#160;&#160;We intend to
    employ a dedicated and experienced asset management team to
    proactively manage our third-party hotel management companies in
    order to improve operational performance and maximize our return
    on investment. Although we will not operate our hotel
    properties, both our asset managers and our executive management
    team will actively participate with our hotel managers in all
    aspects of our hotels&#146; operations, including property
    positioning and repositioning, operations analysis, physical
    design, renovation and capital improvements, guest experience
    and overall strategic direction. Through these initiatives, we
    will seek to improve property efficiencies, lower costs,
    maximize revenues, and enhance property operating margins. We
    also anticipate implementing certain value-added strategies,
    such as changing operators, re-branding and de-flagging, when
    appropriate.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    <I>Prudent Capital Structure.</I>&#160;&#160;We expect to
    maintain a low-leverage capital structure and intend to limit
    the sum of the outstanding principal amount of our consolidated
    indebtedness and the liquidation preference of any outstanding
    preferred shares to not more than 4.5x our earnings before
    interest, taxes, depreciation and amortization, or EBITDA, for
    the <FONT style="white-space: nowrap">12-month</FONT>
    period preceding the incurrence of such debt or the issuance of
    such preferred shares. Our board of trustees may modify or
    eliminate this limitation at any time without the approval of
    our shareholders.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Business
    Strategy and Investment Criteria</FONT></B>
</DIV>


<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to invest in hotel properties located primarily in
    major U.S.&#160;cities, such as Boston, New York, Washington,
    D.C., Chicago, Los Angeles and San Francisco, with an emphasis
    on the major coastal markets. We believe these markets have
    significant barriers to entry and will experience the most
    robust recovery in meeting and room-night demand as the U.S.
    economy improves. In addition, we may invest in resort
    properties located near our primary urban target markets, as
    well as in select destination markets such as Hawaii, south
    Florida and southern California. We intend to focus on both
    branded and independent full-service hotels in the &#147;upper
    upscale&#148; segment of the lodging industry as defined by
    Smith Travel Research based on average daily rates. In addition,
    we may seek to acquire branded, upscale, select-service hotels
    in our primary urban target markets. The full-service hotels on
    which we intend to focus our investment activity generally will
    have restaurant, lounge and meeting facilities and other
    amenities, as well as high service levels. The select-service
    hotels in which we may invest generally will not have
    comprehensive business meeting or banquet facilities and will
    have limited food and beverage outlets. We believe our target
    markets, including the coastal cities and resort markets, are
    characterized by significant barriers to entry and that
    long-term room-night demand and rate growth of these types of
    hotels will likely continue to outperform the national average,
    as they have historically.
</DIV>


<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will utilize extensive research to evaluate any target market
    and property, including a detailed review of the long-term
    economic outlook, trends in local demand generators, competitive
    environment, property systems and physical condition, and
    property financial performance. Specific acquisition criteria
    may include, but are not limited to, the following:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

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    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    premier locations, facilities and other competitive advantages
    not easily replicated;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    significant barriers to entry in the market, such as scarcity of
    development sites, regulatory hurdles, high per room development
    costs and long lead times for new development;
</TD>
</TR>

</TABLE>
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    <BR>
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<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

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    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
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<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    acquisition price at a significant discount to replacement cost;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    properties not subject to long-term management contracts with
    hotel management companies;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    potential return on investment initiatives, including
    redevelopment, rebranding, redesign, expansion and change of
    management;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    opportunities to implement value-added operational
    improvements;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    strong demand growth characteristics supported by favorable
    demographic indicators.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe that as the U.S.&#160;economy begins to stabilize and
    generate positive GDP growth, upper upscale full-service hotels
    and resorts and upscale select-service hotels located in major
    U.S.&#160;urban, convention and drive-to and destination resort
    markets are likely to generate the most favorable returns on
    investment in the lodging industry. Hotel developers&#146;
    inability to source construction financing over the past 18 to
    24&#160;months, and likely for the foreseeable future, creates
    an environment in which minimal new lodging supply is expected
    to be added through at least 2012. We believe that as transient
    and group travel rebounds, existing supply will accommodate
    incremental room-night demand allowing hotel owners to grow
    occupancy and ultimately increase rates, thereby improving
    profitability. We believe that portfolio diversification will
    allow us to capitalize from growth in various customer segments
    including business transient, leisure transient, and group and
    convention room-night demand.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We generally intend to enter into flexible management contracts
    with third-party hotel management companies for the operation of
    our hotels that will provide us with the ability to replace
    operators
    <FONT style="white-space: nowrap">and/or</FONT>
    reposition properties, to the extent that we determine to do so,
    and will align our operators with our objective of generating
    the highest return on investment. In addition, we believe that
    flexible management contracts facilitate the sale of hotels, and
    we may seek to opportunistically sell hotels if we believe sales
    proceeds may be invested in hotel properties that offer more
    attractive risk-adjusted returns.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Initially, we do not intend to engage in significant development
    or redevelopment of hotel properties. However, we do expect to
    engage in partial redevelopment and repositioning of certain
    properties, as we seek to maximize the financial performance of
    the hotels that we acquire. In addition, we may acquire
    properties that require significant capital improvement,
    renovation or refurbishment. Over the long-term, we may acquire
    hotel and resort properties that we believe would benefit from
    significant redevelopment or expansion, including, for example,
    adding rooms, meeting facilities or other amenities.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may consider acquiring outstanding debt secured by a hotel or
    resort property from lenders and investors if we believe we can
    foreclose on or acquire ownership of the property in the
    near-term. We do not intend to originate any debt financing or
    purchase any debt where we do not expect to gain ownership of
    the underlying property.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Financing
    Strategies</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect to maintain a low-leverage capital structure and
    intend to limit the sum of the outstanding principal amount of
    our consolidated indebtedness and the liquidation preference of
    any outstanding preferred shares to not more than 4.5x our
    EBITDA for the
    <FONT style="white-space: nowrap">12-month</FONT>
    period preceding the incurrence of such debt or the issuance of
    such preferred shares. Over time, we intend to finance our
    long-term growth with common and preferred equity issuances and
    debt financing having staggered maturities. Our debt may include
    mortgage debt secured by our hotel properties and unsecured debt.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We anticipate arranging and utilizing a revolving credit
    facility to fund future acquisitions (following investment of
    the net proceeds of this offering and the concurrent private
    placement), as well as for property redevelopments, return on
    investment initiatives and working capital requirements. We
    intend to repay amounts outstanding under any such credit
    facility from time to time with periodic common and preferred
    equity issuances, long-term debt financings and cash flows from
    operations. No assurance can be given that we will be able to
    obtain a credit facility.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    When purchasing hotel properties, we may issue limited
    partnership interests in our operating partnership as full or
    partial consideration to sellers who may desire to take
    advantage of tax deferral on the sale of a hotel or participate
    in the potential appreciation in value of our common shares.
</DIV>
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    <BR>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Executive
    Management Team</FONT></B>
</DIV>


<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our management team will be led by our Chairman, President and
    Chief Executive Officer, Mr. Bortz, who has 28&#160;years of
    lodging and real estate experience, including expertise in hotel
    property acquisitions, divestitures, repositioning,
    redevelopment, asset management, branding, re-branding and
    financing. Mr.&#160;Bortz founded and led two prior lodging
    entities, where he oversaw:
</DIV>


<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

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    <TD width="87%"></TD>
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<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    more than $2.5&#160;billion in hotel investments, including
    acquisitions, dispositions, mergers and joint ventures;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    more than $3.0&#160;billion in financings, including mortgage
    financings, common and preferred equity financings and secured
    and unsecured credit facilities;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the establishment of strong relationships within the lodging
    industry, including with hotel owners, management companies,
    brand companies and brokers;&#160;and
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the development of strong relationships within the financial
    community, including with leading institutional investors,
    investment banks, professional service firms and lenders.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our Executive Vice President and Chief Financial Officer, Mr.
    Martz, has over 15 years&#146; experience in the hotel and real
    estate industries, including having served as Chief Financial
    Officer in his last two positions and in senior finance
    positions at two NYSE-listed hotel REITs.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Following completion of this offering, we intend to expand our
    team to include a Chief Investment Officer. Thereafter, we
    intend to hire additional experienced professionals as required
    by our operations, such as asset managers, analysts, accountants
    and administrative staff.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Summary
    Risk Factors</FONT></B>
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An investment in our common shares involves various risks. You
    should carefully consider the matters discussed in &#147;Risk
    Factors&#148; beginning on page&#160;11 of this prospectus
    before you decide whether to invest in our common shares. Some
    of the risks include the following:
</DIV>


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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    We were organized in October 2009 and have no operating history.
    We may be unable to successfully implement our business strategy
    or generate sufficient operating cash flows to make or sustain
    distributions to our shareholders.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    We currently do not own, and have no agreements to acquire, any
    hotel properties. We have not identified any specific hotel
    properties to acquire or committed any portion of the net
    proceeds of this offering or the concurrent private placement to
    any specific hotel property investment. Accordingly, you will
    not be able to evaluate the merits of any investments we make
    with the net proceeds. We may be unable to invest the net
    proceeds on acceptable terms, or at all.
</TD>
</TR>

</TABLE>


<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

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    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    Our success will depend upon the efforts and expertise of our
    existing and future management team. The loss of their services,
    and our inability to find suitable replacements, could delay the
    implementation of our investment strategy.
</TD>
</TR>

</TABLE>


<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

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    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    A substantial part of our business strategy is based on our
    expectation that lodging industry fundamentals will improve as
    forecast by industry analysts, such as Jones Lang LaSalle
    Hotels, or JLLH. If lodging industry fundamentals do not improve
    when or as we expect, or deteriorate, the operating results of
    hotels that we acquire and our ability to execute our business
    strategy may be impaired.
</TD>
</TR>

</TABLE>


<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

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    <TD width="7%"></TD>
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    <TD width="87%"></TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    The performance of the lodging industry has historically been
    linked to the performance of the general economy and U.S. GDP.
    Declines in corporate travel budgets and consumer demand due to
    adverse general economic conditions such as declines in U.S. GDP
    can lower the revenues and profitability of our hotel properties.
</TD>
</TR>

</TABLE>



<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

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    <TD width="87%"></TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    We will rely on third-party hotel management companies to
    operate our hotel properties under the terms of hotel management
    contracts. Even if we believe our hotel properties are being
    operated inefficiently or in a manner that does not result in
    satisfactory RevPar or profits we may not be able to force the
    hotel management company to change its method of operating our
    hotels.
</TD>
</TR>

</TABLE>

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    <BR>
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<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
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<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    Our hotel management contracts will require us, through our
    taxable REIT subsidiaries, or TRS lessees, to bear the risks of
    decreased revenues or increased expenses at our hotel
    properties. Any increases in operating expenses, such as wages
    and benefits, repair and maintenance, energy, taxes and
    insurance, or decreases in revenues resulting from decreased
    demand or competition from new supply, will be borne entirely by
    us and may have a significant adverse impact on our earnings and
    cash flow.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    To qualify for taxation as a REIT, we generally will be required
    to distribute at least 90% of our REIT taxable income,
    determined without regard to the deduction for dividends paid
    and excluding any net capital gain, each year to our
    shareholders. As a result, our ability to fund capital
    expenditures, acquisitions, hotel redevelopment and development
    through retained earnings will be very limited. We may not be
    able to fund capital improvements or acquisitions solely from
    cash provided from our operating activities. Consequently, after
    investing the net proceeds of this offering, we will rely upon
    the availability of debt or equity capital to fund investments
    in hotel properties and capital improvements. There can be no
    assurance that we will be able to obtain such financing on
    favorable terms or at all. We also may not generate sufficient
    cash flow to fund distributions required to maintain our
    qualification as a REIT.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    If we fail to qualify, or lose our qualification, as a REIT, we
    will be subject to federal income tax on our taxable income. Our
    hotel properties leased by TRS lessees must be operated by
    &#147;eligible independent contractors,&#148; as defined in the
    Internal Revenue Code of 1986, as amended, or the Code, in order
    for our TRS lessees to qualify as such and for the rental income
    from our TRS leases to qualify as rents from real property under
    the applicable REIT income tests. Complex constructive ownership
    rules under the Code apply in determining whether a person
    qualifies as an eligible independent contractor.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    We will incur a 100% excise tax on transactions with taxable
    REIT subsidiaries, or TRSs, including our TRS lessees, that are
    not conducted on an arm&#146;s-length basis.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    Subject to certain exceptions, our declaration of trust provides
    that no person may beneficially own more than 9.8% in value or
    in number of shares, whichever is more restrictive, of the
    outstanding shares of any class or series of our shares of
    beneficial interest. In addition, our declaration of trust and
    bylaws contain other provisions that may delay, defer or prevent
    an acquisition of control of our company by a third party
    without our board of trustees&#146; approval, even if our
    shareholders believe the change of control is in their best
    interests.
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    Because real estate investments are relatively illiquid, our
    ability to promptly sell one or more hotel properties for
    reasonable prices in response to changing economic, financial
    and investment conditions will be limited. In addition, because
    some of our hotel management contracts may be long-term and may
    not terminate in the event of a sale, our ability to sell hotel
    properties may be further limited.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    Organizational Structure</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We were formed as a Maryland real estate investment trust on
    October&#160;2, 2009. We will be the sole general partner of
    Pebblebrook Hotel, L.P., the subsidiary through which we will
    conduct substantially all of our operations and make
    substantially all of our investments and which we refer to as
    our operating partnership. Upon completion of this offering, we
    will contribute to our operating partnership the net proceeds of
    this offering and the concurrent private placement as our
    initial capital contribution in exchange for substantially all
    of the limited partnership interests in our operating
    partnership. In the future we may issue limited partnership
    interests in our operating partnership as consideration for the
    purchase of hotel properties or in connection with our equity
    incentive plan.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order for the income from our hotel operations to constitute
    &#147;rents from real property&#148; for purposes of the gross
    income tests required for REIT qualification under the Code, we
    cannot directly operate any of our hotel properties. Instead, we
    must lease our hotel properties. Accordingly, we will lease each
    of our hotel properties to one of our TRS lessees, which will be
    wholly owned by our operating partnership. Our TRS lessees will
    pay rent to us that can qualify as &#147;rents from real
    property,&#148; provided that the TRS lessees engage
</DIV>
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    <BR>
    7
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#147;eligible independent contractors&#148; to manage our
    hotels. A TRS is a corporate subsidiary of a REIT that jointly
    elects with the REIT to be treated as a TRS of the REIT and that
    pays federal income tax at regular corporate rates on its
    taxable income. We expect that all of our hotel properties will
    be leased to one of our wholly owned TRS lessees, which will be
    able to pay us rent out of the revenue of the hotels, and will
    engage multiple eligible independent contractors to manage our
    hotels.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following chart shows the structure of our company following
    completion of this offering and the concurrent private placement:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="w75877a3w7587701.gif" alt="(FLOW CHART)">
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 12pt; margin-left: 0%; width: 10%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=48 -->



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    <FONT style="font-size: 8pt">(1)
    </FONT></TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 8pt">Includes an aggregate of 135,000
    common shares purchased by Messrs. Bortz and Martz in the
    concurrent private placement and an aggregate of 15,000
    restricted common shares that will be granted to our initial
    independent trustees upon completion of this offering under our
    2009&#160;Equity Incentive Plan. Does not reflect
    (i)&#160;881,750&#160;common shares underlying an aggregate of
    881,750&#160;LTIP units that will be granted to Messrs. Bortz,
    Martz and Andrew&#160;H. Dittamo, our Vice President and
    Controller, upon completion of this offering pursuant to our
    2009 Equity Incentive Plan or (ii)&#160;grants of an aggregate
    of 48,000&#160;restricted common shares to Messrs.&#160;Bortz,
    Martz and Dittamo that are expected to be approved at the first
    meeting of our board of trustees following completion of this
    offering pursuant to our 2009 Equity Incentive Plan as part of
    our 2010&#160;compensation program.
    </FONT></TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    <FONT style="font-size: 8pt">(2)
    </FONT></TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 8pt">Upon completion of this offering,
    we will issue an aggregate of 881,750 LTIP units to
    Messrs.&#160;Bortz, Martz and Dittamo. See &#147;Our
    Management&#160;&#151; 2009 Equity Incentive Plan.&#148;
    </FONT></TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>

<TR>
    <TD align="right" valign="top">
    <FONT style="font-size: 8pt">(3)
    </FONT></TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 8pt">To be formed.
    </FONT></TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Tax
    Status</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to elect to be taxed as a REIT for federal income tax
    purposes commencing with our short taxable year ending on
    December&#160;31, 2009. Our qualification as a REIT will depend
    upon our ability to meet, on a continuing basis, through actual
    investment and operating results, various complex requirements
    under the Code relating to, among other things, the sources of
    our gross income, the composition and values of our assets, our
    distribution levels and the diversity of ownership of our shares
    of beneficial interest. We believe that we will be organized in
    conformity with the requirements for qualification as a REIT
    under the Code and that our intended manner of operation will
    enable us to meet the requirements for qualification and
    taxation as a REIT for federal income tax purposes commencing
    with our short taxable year ending December&#160;31, 2009 and
    continuing thereafter.
</DIV>
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    <BR>
    8
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a REIT, we generally will not be subject to federal income
    tax on our REIT taxable income that we distribute currently to
    our shareholders. Under the Code, REITs are subject to numerous
    organizational and operational requirements, including a
    requirement that they distribute each year at least 90% of their
    taxable income, determined without regard to the deduction for
    dividends paid and excluding any net capital gains. If we fail
    to qualify for taxation as a REIT in any taxable year and do not
    qualify for certain statutory relief provisions, our income for
    that year will be taxed at regular corporate rates, and we will
    be disqualified from taxation as a REIT for the four taxable
    years following the year during which we ceased to qualify as a
    REIT. Even if we qualify as a REIT for federal income tax
    purposes, we may still be subject to state and local taxes on
    our income and assets and to federal income and excise taxes on
    our undistributed income. Additionally, any income earned by our
    TRS lessees will be fully subject to federal, state and local
    corporate income tax.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Distribution
    Policy</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to make distributions consistent with our intent to be
    taxed as a REIT under the Code. We intend to make regular
    quarterly distributions to our shareholders beginning at such
    time as our board of trustees determines that we have acquired
    hotels generating sufficient cash flow to do so. Until we invest
    a substantial portion of the net proceeds of this offering and
    the concurrent private placement in hotels, we expect our
    distributions will be nominal. We cannot predict the timing of
    our hotel investments or when we will commence paying quarterly
    distributions.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order to qualify for taxation as a REIT, we intend to make
    annual distributions to our shareholders of at least 90% of our
    taxable income, determined without regard to the deduction for
    dividends paid and excluding any net capital gains. We cannot
    assure you as to when we will begin to generate sufficient cash
    flow to make distributions to our shareholders or our ability to
    sustain those distributions. Distributions will be authorized by
    our board of trustees and declared by us based upon a variety of
    factors deemed relevant by our trustees. Distributions to our
    shareholders generally will be taxable to our shareholders as
    ordinary income; however, because a significant portion of our
    investments will be equity ownership interests in hotel
    properties, which will generate depreciation and other non-cash
    charges against our income, a portion of our distributions may
    constitute a tax-free return of capital. To the extent not
    inconsistent with maintaining our qualification as a REIT, we
    may retain any earnings that accumulate in our TRSs.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Restrictions
    on Ownership of Our Common Shares</FONT></B>
</DIV>


<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order to help us qualify as a REIT, among other reasons, our
    declaration of trust, subject to certain exceptions, restricts
    the amount of our shares of beneficial interest that a person
    may beneficially or constructively own. Our declaration of trust
    provides that, subject to certain exceptions, no person may
    beneficially or constructively own more than 9.8% in value or in
    number of shares, whichever is more restrictive, of the
    outstanding shares of any class or series of our shares of
    beneficial interest. Our declaration of trust also prohibits any
    person from (i)&#160;beneficially owning shares of beneficial
    interest to the extent that such beneficial ownership would
    result in our being &#147;closely held&#148; within the meaning
    of Section&#160;856(h) of the Code (without regard to whether
    the ownership interest is held during the last half of the
    taxable year), (ii)&#160;transferring our shares of beneficial
    interest to the extent that such transfer would result in our
    shares of beneficial interest being beneficially owned by less
    than 100&#160;persons (determined under the principles of
    Section&#160;856(a)(5) of the Code), (iii)&#160;beneficially or
    constructively owning our shares of beneficial interest to the
    extent such beneficial or constructive ownership would cause us
    to constructively own ten percent or more of the ownership
    interests in a tenant (other than a TRS) of our real property
    within the meaning of Section&#160;856(d)(2)(B) of the Code or
    (iv)&#160;beneficially or constructively owning or transferring
    our shares of beneficial interest if such ownership or transfer
    would otherwise cause us to fail to qualify as a REIT under the
    Code, including but not limited to, as a result of any hotel
    management companies failing to qualify as &#147;eligible
    independent contractors&#148; under the REIT rules. Our board of
    trustees, in its sole discretion, may prospectively or
    retroactively exempt a person from certain of these limits and
    may establish or increase an excepted holder percentage limit
    for such person. The person seeking an exemption must provide to
    our board of trustees such representations, covenants and
    undertakings as our board of trustees may deem appropriate in
    order to conclude that granting the exemption will not cause us
    to lose our status as a REIT.
</DIV>


<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>
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    <BR>
    9
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<DIV style="width: 100%; height: 9in; border-top: 1px solid #000000; padding-top: 12pt; border-right: 1px solid #000000; padding-right: 12pt; border-bottom: 1px solid #000000; padding-bottom: 12pt; border-left: 1px solid #000000; padding-left: 12pt"><!-- Begin box 1 -->
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<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">The
    Offering</FONT></B>
</DIV>




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
    Common shares offered</TD>
    <TD></TD>
    <TD valign="bottom">
    17,500,000 common shares (plus up to an additional 2,625,000
    common shares that we may issue and sell upon the exercise of
    the underwriters&#146; overallotment option).</TD>
</TR>

</TABLE>





<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
    Common shares to be outstanding upon completion of this offering</TD>
    <TD></TD>
    <TD valign="bottom">
    17,650,000 common
    shares<SUP style="font-size: 85%; vertical-align: top">(1)</SUP></TD>

</TR>

</TABLE>



<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
    Use of proceeds</TD>
    <TD></TD>
    <TD valign="bottom">
    We will contribute the net proceeds of this offering and the
    concurrent private placement to our operating partnership. Our
    operating partnership will invest these net proceeds in hotel
    properties in accordance with our investment strategy described
    in this prospectus and for general business purposes. Prior to
    the full investment of the net offering proceeds in hotel
    properties, we intend to invest the net proceeds in
    interest-bearing short-term investment grade securities or
    money-market accounts which are consistent with our intention to
    qualify as a REIT. These initial investments are expected to
    provide a lower net return than we will seek to achieve from
    investments in hotel properties. We will use approximately
    $100,000 of the proceeds to reimburse Mr.&#160;Bortz for
    out-of-pocket expenses he incurred in connection with the
    formation of our company and this offering and $1,000 to
    repurchase the shares he acquired in connection with the
    formation and initial capitalization of our company. See
    &#147;Use of Proceeds.&#148;</TD>
</TR>

</TABLE>




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="36%"></TD>
    <TD width="1%"></TD>
    <TD width="63%"></TD>
</TR>

<TR>
    <TD valign="top">
    Proposed New York Stock Exchange symbol</TD>
    <TD></TD>
    <TD valign="bottom">
    &#147;PEB&#148;</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>



<TR>
    <TD valign="top">
    Ownership and transfer restrictions</TD>
    <TD></TD>
    <TD valign="bottom">
    Our declaration of trust, subject to certain exceptions,
    prohibits any person from directly or indirectly owning more
    than 9.8% by value or number of shares, whichever is more
    restrictive, of the outstanding shares of any class or series of
    our shares of beneficial interest. See &#147;Description of
    Shares of Beneficial Interest&#160;&#151; Restrictions on
    Ownership and Transfer.&#148;</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>



<TR>
    <TD valign="top">
    Risk factors</TD>
    <TD></TD>
    <TD valign="bottom">
    Investing in our common shares involves risks. You should
    carefully read and consider the information set forth under
    &#147;Risk Factors&#148; and all other information in this
    prospectus before investing in our common shares.</TD>
</TR>

</TABLE>



<DIV style="font-size: 12pt; margin-left: 0%; width: 10%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=48 -->




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    <FONT style="font-size: 8pt">(1)
    </FONT></TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 8pt">Includes an aggregate of 135,000
    common shares that we will sell to Messrs. Bortz and Martz in
    the concurrent private placement and an aggregate of 15,000
    restricted common shares that will be granted to our initial
    independent trustees upon completion of this offering pursuant
    to our 2009 Equity Incentive Plan. Does not include
    (i)&#160;881,750 common shares underlying an aggregate of
    881,750 LTIP units that will be granted to Messrs.&#160;Bortz,
    Martz and Dittamo upon completion of this offering pursuant to
    our 2009 Equity Incentive Plan, (ii)&#160;grants of an aggregate
    of 48,000 restricted common shares to Messrs.&#160;Bortz, Martz
    and Dittamo pursuant to our 2009 Equity Incentive Plan that are
    expected to be approved at the first meeting of our board of
    trustees following completion of this offering as part of our
    2010 compensation program, (iii)&#160;377,875 common shares
    reserved for issuance under our 2009 Equity Incentive Plan and
    (iv)&#160;2,625,000 common shares issuable upon exercise of the
    underwriters&#146; overallotment option. Our 2009 Equity
    Incentive Plan provides for the issuance of aggregate share
    awards equal to 7.5% of the number of common shares issued in
    this offering (excluding any shares issued pursuant to the
    underwriters&#146; overallotment option) and in the concurrent
    private placement. Based on an offering of
    17,500,000&#160;shares and 135,000&#160;shares sold pursuant to
    the concurrent private placement, 1,322,625 common shares will
    be available for issuance under the 2009 Equity Incentive Plan.
    After the grant of an aggregate of 881,750 LTIP units to
    Messrs.&#160;Bortz, Martz and Dittamo, an aggregate of 15,000
    restricted common shares to our initial independent trustees and
    an aggregate of 48,000 restricted common shares to
    Messrs.&#160;Bortz, Martz and Dittamo that are expected to be
    approved at the first meeting of our board of trustees following
    completion of this offering as part of our 2010 compensation
    program, 377,875 common shares will remain available for grants
    under the 2009 Equity Incentive Plan. If the size of this
    offering changes, the aggregate number of LTIP units to be
    granted to Messrs.&#160;Bortz, Martz and Dittamo will change so
    as to equal 5% of the common shares issued in this offering
    (excluding any shares issued pursuant to the underwriters&#146;
    overallotment option) and in the concurrent private placement
    and the aggregate number of shares and the remaining number of
    shares reserved for issuance under the 2009 Equity Incentive
    Plan will change accordingly.
    </FONT></TD>
</TR>

</TABLE>


<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>



<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    Information</FONT></B>
</DIV>



<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our principal executive offices are located at
    10319&#160;Westlake Drive, Suite&#160;112, Bethesda, MD 20817.
    Our telephone number is
    <FONT style="white-space: nowrap">(301)&#160;765-6045.</FONT>
    We expect to maintain a website at www.pebblebrookhotels.com
    upon completion of this offering. The contents of our website
    are not a part of this prospectus. We have included our website
    address only as an inactive textual reference and do not intend
    it to be an active link to our website.
</DIV>
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    <BR>
    10
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<A name='102'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">RISK
    FACTORS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An investment in our common shares involves risks. In addition
    to other information in this prospectus, you should carefully
    consider the following risks before investing in our common
    shares offered by this prospectus. The occurrence of any of the
    following risks could materially and adversely affect our
    business, prospects, financial condition, results of operations
    and our ability to make cash distributions to our shareholders,
    which could cause you to lose all or a significant portion of
    your investment in our common shares. Some statements in this
    prospectus, including statements in the following risk factors,
    constitute forward-looking statements. See &#147;Cautionary Note
    Regarding Forward-Looking Statements.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to Our Business and Properties</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    have no operating history and may not be able to successfully
    operate our business or generate sufficient operating cash flows
    to make or sustain distributions to our
    shareholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We were organized in October 2009, have no operating history and
    have no agreements to acquire any hotel properties. We will only
    commence operations upon completion of this offering. Our
    ability to make or sustain distributions to our shareholders
    will depend on many factors, including our availability to
    identify attractive acquisition opportunities that satisfy our
    investment strategy, our success in consummating acquisitions on
    favorable terms, the level and volatility of interest rates,
    readily accessible short-term and long-term financing on
    favorable terms, and conditions in the financial markets, the
    real estate market and the economy. We will face competition in
    acquiring attractive hotel properties. The value of the hotel
    properties that we acquire may decline substantially after we
    purchase them. We may not be able to successfully operate our
    business or implement our operating policies and investment
    strategy successfully. Furthermore, we may not be able to
    generate sufficient operating cash flow to pay our operating
    expenses and make distributions to our shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a newly formed company, we are subject to the risks of any
    newly established business enterprise, including risks that we
    will be unable to attract and retain qualified personnel, create
    effective operating and financial controls and systems or
    effectively mange our anticipated growth, any of which could
    have a material adverse effect on our business and our operating
    results.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    have not yet identified any specific hotel properties to acquire
    and you will be unable to evaluate the allocation of net
    proceeds of this offering and the concurrent private placement
    or the economic merits of our investments prior to making your
    investment decision.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We currently do not own any properties and have no agreements to
    acquire any properties. Since we have not yet identified any
    specific hotel properties to acquire or committed the net
    proceeds of this offering or the concurrent private placement to
    any specific hotel property investment, you will be unable to
    evaluate the allocation of the net proceeds or the economic
    merits of our acquisitions before making an investment decision
    to purchase our common shares. As a result, we will have broad
    authority to invest the net proceeds in any real estate
    investments that we may identify in the future and we may use
    those proceeds to make investments with which you may not agree.
    In addition, our investment policies may be amended or revised
    from time to time at the discretion of our board of trustees,
    without a vote of our shareholders. These factors will increase
    the uncertainty, and thus the risk, of investing in our common
    shares. Our failure to apply the net proceeds effectively or
    find suitable hotel properties to acquire in a timely manner or
    on acceptable terms could result in returns that are
    substantially below expectations or result in losses.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior to the full investment of the net offering proceeds in
    hotel properties, we intend to invest the net proceeds in
    interest-bearing short-term, investment grade securities or
    money-market accounts which are consistent with our intention to
    qualify as a REIT. These investments are expected to provide a
    lower net return than we will seek to achieve from our
    investments in hotel properties. We may not be able to identify
    hotel investments that meet our investment criteria, we may not
    be successful in completing any investment we identify and our
    investments may not produce acceptable, or any, returns. We may
    be unable to invest the proceeds on acceptable terms, or at all.
</DIV>
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    <BR>
    11
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    depend on the efforts and expertise of our key executive
    officers and would be adversely affected by the loss of their
    services.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We depend on the efforts and expertise of our President and
    Chief Executive Officer, as well as our other executive
    officers, to execute our business strategy. The loss of their
    services, and our inability to find suitable replacements, would
    have an adverse effect on our business.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Because
    our senior executive officers will have broad discretion to
    invest the net proceeds of this offering and the concurrent
    private placement, they may make investments where the returns
    are substantially below expectations or which result in net
    operating losses.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our senior executive officers will have broad discretion, within
    the general investment criteria established by our board of
    trustees, to invest the net proceeds of this offering and the
    concurrent private placement and to determine the timing of such
    investments. In addition, our investment policies may be revised
    from time to time at the discretion of our board of trustees,
    without a vote of our shareholders. Such discretion could result
    in investments that may not yield returns consistent with
    expectations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    intend to invest in the upper upscale segment of the lodging
    market which is highly competitive and generally subject to
    greater volatility than most other market segments and could
    negatively affect our profitability.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The upper upscale segment of the hotel business is highly
    competitive. Our hotel properties will compete on the basis of
    location, room rates, quality, service levels, reputation and
    reservations systems, among many factors. There are many
    competitors in the upper upscale segment, and many of these
    competitors may have substantially greater marketing and
    financial resources than we have. This competition could reduce
    occupancy levels and room revenue at our hotels. Over-building
    in the lodging industry may increase the number of rooms
    available and may decrease occupancy and room rates. In
    addition, in periods of weak demand, as may occur during a
    general economic recession, profitability is negatively affected
    by the relatively high fixed costs of operating upper upscale
    hotels.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Failure
    of the lodging industry to exhibit improvement may adversely
    affect the operating results of the hotels we acquire and our
    ability to execute our business strategy.</FONT></I></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A substantial part of our business strategy is based on our
    expectation that lodging industry fundamentals will improve as
    forecast by industry analysts, such as JLLH, which projects that
    RevPAR growth will turn positive in 2011, thereby improving
    profitability. There can be no assurance as to whether, or when,
    lodging industry fundamentals will in fact improve or to what
    extent they will improve. In the event conditions in the
    industry do not improve when and as we expect, or deteriorate,
    the operating results of hotels we acquire and our ability to
    execute our business strategy may be impaired.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    returns could be negatively impacted if the third-party
    management companies that will operate our hotels do not manage
    our hotel properties effectively.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Since federal income tax laws restrict REITs and their
    subsidiaries from operating or managing a hotel, we will not
    operate any hotel properties we acquire. Instead, we will lease
    substantially all of our hotel properties to subsidiaries that
    qualify as TRSs, under applicable REIT laws, and our TRS lessees
    will retain third-party managers to operate our hotels pursuant
    to management contracts. Our cash flow from the hotels may be
    adversely affected if our managers fail to provide quality
    services and amenities or if they or their affiliates fail to
    maintain a quality brand name. In addition, our managers or
    their affiliates may manage, and in some cases may own, invest
    in or provide credit support or operating guarantees to hotels
    that compete with hotel properties that we acquire, which may
    result in conflicts of interest and decisions regarding the
    operation of our hotels that are not in our best interests.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will not have the authority to require any hotel property to
    be operated in a particular manner or to govern any particular
    aspect of the daily operations of any hotel property (for
    example, setting room rates). Thus, even if we believe our
    hotels are being operated inefficiently or in a manner that does
    not result in
</DIV>
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    12
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    satisfactory occupancy rates, RevPAR and average daily rates, or
    ADR, we may not be able to force the management company to
    change its method of operating our hotels. We generally will
    attempt to resolve issues with our managers through discussions
    and negotiations. However, if we are unable to reach
    satisfactory results through discussions and negotiations, we
    may choose to litigate the dispute or submit the matter to
    third-party dispute resolution. We can only seek redress if a
    management company violates the terms of the applicable
    management contract with a TRS lessee, and then only to the
    extent of the remedies provided for under the terms of the
    management contract. Additionally, in the event that we need to
    replace any management company, we may be required by the terms
    of the management contract to pay substantial termination fees
    and may experience significant disruptions at the affected
    hotels.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Restrictive
    covenants in our management contracts could preclude us from
    taking actions with respect to the sale or refinancing of a
    hotel property that would otherwise be in our best
    interest.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although we currently intend to enter into flexible management
    contracts that will provide us with the ability to replace our
    hotel managers on relatively short notice, we may enter into
    management contracts that contain some restrictive covenants or
    acquire properties subject to existing management contracts that
    do not allow such flexibility. For example, the terms of some
    management contracts may restrict our ability to sell a property
    unless the purchaser is not a competitor of the manager and
    assumes the related management contract and meets specified
    other conditions. If we enter into any such management
    contracts, or acquire properties with such terms, we may be
    precluded from taking actions that would otherwise be in our
    best interest or could cause us to incur substantial expense.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    TRS lessee structure subjects us to the risk of increased hotel
    operating expenses.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our leases with our TRS lessees will require our TRS lessees to
    pay us rent based in part on revenues from our hotels. Our
    operating risks include decreases in hotel revenues and
    increases in hotel operating expenses, which would adversely
    affect our TRS lessees&#146; ability to pay us rent due under
    the leases, including but not limited to the increases in:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    wage and benefit costs;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    repair and maintenance expenses;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    energy costs;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    property taxes;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    insurance costs;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    other operating expenses.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Increases in these operating expenses can have a significant
    adverse impact on our financial condition, results of
    operations, the market price of our common shares and our
    ability to make distributions to our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    hotels operated under franchise agreements will be subject to
    risks arising from adverse developments with respect to the
    franchise brand and to costs associated with maintaining the
    franchise license.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect that many of our hotel properties will operate under
    franchise agreements, and that we will be subject to the risks
    associated with concentrating hotel investments in several
    franchise brands. These risks include reductions in business
    following negative publicity related to one of the brands or the
    general decline of a brand.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The maintenance of the franchise licenses for branded hotel
    properties will be subject to the franchisors&#146; operating
    standards and other terms and conditions. Franchisors will
    periodically inspect hotel properties to ensure that we and our
    lessees and management companies follow their standards. Failure
    by us, one of our TRS lessees or one of our third-party
    management companies to maintain these standards or other terms
    and conditions could result in a franchise license being
    canceled. If a franchise license is cancelled due to our failure
    to make required improvements or to otherwise comply with its
    terms, we also may be liable to
</DIV>
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    the franchisor for a termination payment, which varies by
    franchisor and by hotel property. As a condition of maintaining
    a franchise license, a franchisor could require us to make
    capital expenditures, even if we do not believe the capital
    improvements are necessary or desirable or will result in an
    acceptable return on our investment. We may risk losing a
    franchise license if we do not make franchisor-required capital
    expenditures.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If a franchisor terminates the franchise license or the license
    expires, we may try either to obtain a suitable replacement
    franchise or to operate the hotel without a franchise license.
    The loss of a franchise license could materially and adversely
    affect the operations and the underlying value of the hotel
    property because of the loss of associated name recognition,
    marketing support and centralized reservation system provided by
    the franchisor and adversely affect our revenues. This loss of
    revenue could in turn adversely affect our financial condition,
    results of operations, the market price of our common shares and
    our ability to make distributions to our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    ability to make distributions to our shareholders is subject to
    fluctuations in our financial performance, operating results and
    capital improvements requirements.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To qualify for taxation as a REIT, we will be required to
    distribute at least 90% of our taxable income (determined before
    the deduction for dividends paid and excluding any net capital
    gains) each year to our shareholders and we generally expect to
    make distributions in excess of such amount. In the event of
    downturns in our operating results, unanticipated capital
    improvements to our hotel properties or other factors we may be
    unable to declare or pay distributions to our shareholders. The
    timing and amount of distributions are in the sole discretion of
    our board of trustees which will consider, among other factors,
    our financial performance, any debt service obligations, any
    debt covenants, and capital expenditure requirements. We cannot
    assure you that we will generate sufficient cash in order to
    fund distributions.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    use a portion of the net proceeds from this offering and the
    concurrent private placement to make distributions to our
    shareholders, which would, among other things, reduce our cash
    available to invest in hotel properties and may reduce the
    returns on your investment in our common shares.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior to the time we have fully invested the net proceeds of
    this offering and the concurrent private placement, we may fund
    distributions to our shareholders out of the net proceeds of
    these offerings, which would reduce the amount of cash we have
    available to invest in hotel properties and may reduce the
    returns on your investment in our common shares. The use of
    these net proceeds for distributions to shareholders could
    adversely affect our financial results. In addition, funding
    distributions from the net proceeds of this offering may
    constitute a return of capital to our shareholders, which would
    have the effect of reducing each shareholder&#146;s tax basis in
    our common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If we
    cannot obtain financing, our growth will be
    limited.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To qualify for taxation as a REIT, we will be required to
    distribute at least 90% of our taxable income (determined before
    the deduction for dividends paid and excluding any net capital
    gains) each year to our shareholders and we generally expect to
    make distributions in excess of such amount. As a result, our
    ability to retain earnings to fund acquisitions, redevelopment
    and development or other capital expenditures will be limited.
    After investing the net proceeds of this offering and the
    concurrent private placement, we do not expect to have a
    significant amount of debt, including debt that may be assumed
    in connection with a hotel acquisition. Although our business
    strategy contemplates future access to debt financing (including
    an anticipated revolving credit facility) to fund acquisitions,
    redevelopment, development, return on investment initiatives and
    working capital requirements, we have not yet initiated
    discussions with lenders and there can be no assurance that we
    will be able to obtain such financing on favorable terms or at
    all. Recent events in the financial markets have had an adverse
    impact on the credit markets and, as a result, credit has become
    significantly more expensive and difficult to obtain, if
    available at all. Some lenders are imposing more stringent
    credit terms, there has been and may continue to be a general
    reduction in the amount of credit available, and many banks are
    either unable or unwilling to provide new asset based lending.
    Tightening credit markets may have an adverse effect on our
    ability to obtain financing on favorable terms, if at all,
    thereby increasing financing costs
    <FONT style="white-space: nowrap">and/or</FONT>
    requiring us to accept financing with increasing restrictions.
    If adverse conditions in the credit markets&#160;&#151; in
    particular with respect to real estate or lodging industry
    finance&#160;&#151;
</DIV>
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    <BR>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    materially deteriorate, our business could be materially and
    adversely affected. Our long-term ability to grow through
    investments in hotel properties will be limited if we cannot
    obtain additional financing. Market conditions may make it
    difficult to obtain financing, and we cannot assure you that we
    will be able to obtain additional debt or equity financing or
    that we will be able to obtain it on favorable terms.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Future
    debt service obligations could adversely affect our overall
    operating results, may require us to sell hotel properties, may
    jeopardize our qualification as a REIT and could adversely
    affect our ability to make distributions to our shareholders and
    the market price of our common shares.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our business strategy contemplates the use of both secured and
    unsecured debt to finance long-term growth. Although we intend
    to limit the sum of the outstanding principal amount of our
    consolidated indebtedness and the liquidation preference of any
    outstanding preferred shares to not more than 4.5x our EBITDA
    for the
    <FONT style="white-space: nowrap">12-month</FONT>
    period preceding the incurrence of new debt or the issuance of
    preferred shares, our board of trustees may modify or eliminate
    this limitation at any time without the approval of our
    shareholders. As a result, we may be able to incur substantial
    additional debt, including secured debt, in the future.
    Incurring debt could subject us to many risks, including the
    risks that:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our cash flow from operations will be insufficient to make
    required payments of principal and interest;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our debt may increase our vulnerability to adverse economic and
    industry conditions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    we may be required to dedicate a substantial portion of our cash
    flow from operations to payments on our debt, thereby reducing
    cash available for distribution to our shareholders, funds
    available for operations and capital expenditures, future
    business opportunities or other purposes;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the terms of any refinancing will not be as favorable as the
    terms of the debt being refinanced;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the use of leverage could adversely affect our ability to make
    distributions to our shareholders and the market price of our
    common shares.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we violate covenants in future agreements relating to
    indebtedness that we may incur, we could be required to repay
    all or a portion of our indebtedness before maturity at a time
    when we might be unable to arrange financing for such repayment
    on attractive terms, if at all. In addition, future indebtedness
    agreements may require that we meet certain covenant tests in
    order to make distributions to our shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we incur debt in the future and do not have sufficient funds
    to repay such debt at maturity, it may be necessary to refinance
    the debt through additional debt or additional equity
    financings. If, at the time of any refinancing, prevailing
    interest rates or other factors result in higher interest rates
    on refinancings, increases in interest expense could adversely
    affect our cash flow, and, consequently, cash available for
    distribution to our shareholders. If we are unable to refinance
    our debt on acceptable terms, we may be forced to dispose of
    hotel properties on disadvantageous terms, potentially resulting
    in losses. We may place mortgages on hotel properties that we
    acquire to secure a revolving credit facility or other debt. To
    the extent we cannot meet any future debt service obligations,
    we will risk losing some or all of our hotel properties that may
    be pledged to secure our obligations to foreclosure. Also,
    covenants applicable to any future debt could impair our planned
    investment strategy and, if violated, result in a default.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Higher interest rates could increase debt service requirements
    on any floating rate debt that we incur and could reduce the
    amounts available for distribution to our shareholders, as well
    as reduce funds available for our operations, future business
    opportunities, or other purposes. We may obtain in the future
    one or more forms of interest rate protection&#160;&#151; in the
    form of swap agreements, interest rate cap contracts or similar
    agreements&#160;&#151; to &#147;hedge&#148; against the possible
    negative effects of interest rate fluctuations. However, such
    hedging implies costs and we cannot assure you that any hedging
    will adequately relieve the adverse effects of interest rate
    increases or that counterparties under these agreement will
    honor their obligations thereunder. Adverse economic conditions
    could also cause the terms on which we borrow to be unfavorable.
    We could be
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    required to liquidate one or more of our hotel properties in
    order to meet our debt service obligations at times which may
    not permit us to receive an attractive return on our investments.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Any
    joint venture investments that we make could be adversely
    affected by our lack of sole decision-making authority, our
    reliance on co-venturers&#146; financial condition and disputes
    between us and our co-venturers.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may co-invest in hotels in the future with third parties
    through partnerships, joint ventures or other entities,
    acquiring non-controlling interests in or sharing responsibility
    for a property, partnership, joint venture or other entity. In
    this event, we would not be in a position to exercise sole
    decision-making authority regarding the property, partnership,
    joint venture or other entity. Investments through partnerships,
    joint ventures, or other entities may, under certain
    circumstances, involve risks not present were a third party not
    involved, including the possibility that partners or
    co-venturers might become bankrupt, fail to fund their share of
    required capital contributions, make dubious business decisions
    or block or delay necessary decisions. Partners or co-venturers
    may have economic or other business interests or goals which are
    inconsistent with our business interests or goals, and may be in
    a position to take actions contrary to our policies or
    objectives. Such investments may also have the potential risk of
    impasses on decisions, such as a sale, because neither we nor
    the partner or co-venturer would have full control over the
    partnership or joint venture. Disputes between us and partners
    or co-venturers may result in litigation or arbitration that
    would increase our expenses and prevent our officers
    <FONT style="white-space: nowrap">and/or</FONT>
    trustees from focusing their time and effort on our business.
    Consequently, action by, or disputes with, partners or
    co-venturers might result in subjecting properties owned by the
    partnership or joint venture to additional risk. In addition, we
    may in certain circumstances be liable for the actions of our
    third-party partners or co-venturers.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Unanticipated
    expenses and insufficient demand for hotels in new geographic
    markets could adversely affect our profitability and our ability
    to make distributions to our shareholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As part of our business strategy, we may acquire or develop
    hotel properties in geographic areas in which our management may
    have little or no operating experience and in which potential
    customers may not be familiar with the brand of that particular
    hotel. As a result, we may have to incur costs relating to the
    opening, operation and promotion of such hotel properties that
    are substantially greater than those incurred in other areas.
    These hotels may attract fewer customers than other hotel
    properties we may acquire, while at the same time, we may incur
    substantial additional costs with such hotel properties. As a
    result, the results of operations at any hotel properties that
    we may acquire in unfamiliar markets may be less than those of
    other hotels that we may acquire. Unanticipated expenses and
    insufficient demand at a new hotel property, therefore, could
    adversely affect our financial condition and results of
    operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    conflicts of interest policy we will adopt may not adequately
    address all of the conflicts of interest that may arise with
    respect to our activities.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order to avoid any actual or perceived conflicts of interest
    with our trustees, officers or employees, we intend to adopt a
    conflicts of interest policy to specifically address some of the
    conflicts relating to our activities. Although under this policy
    the approval of a majority of our disinterested trustees will be
    required to approve any transaction, agreement or relationship
    in which any of our trustees, officers or employees has an
    interest, there is no assurance that this policy will be
    adequate to address all of the conflicts that may arise or will
    address such conflicts in a manner that is favorable to us. In
    addition, our current board of trustees consists only of
    Mr.&#160;Bortz, and as a result, the transactions and agreements
    entered into in connection with our formation prior to this
    offering have not been approved by any independent or
    disinterested trustees.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    from time to time make distributions to our shareholders in the
    form of our common shares which could give rise to non-cash
    taxable income to our shareholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the extent that, in respect of any calendar year, cash
    available for distribution is less than our net taxable income,
    we could make distributions or a portion of the required
    distributions in the form of a taxable share distribution or
    distribution of debt securities and shareholders may recognize
    non-cash taxable income. In addition, we might be required to
    sell assets or borrow funds to make distributions.
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to Investments in Mortgage Loans</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    strategy of acquiring outstanding debt secured by a hotel or
    resort property may expose us to risks of costs and delays in
    acquiring the underlying property.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may consider acquiring outstanding debt secured by a hotel or
    resort property from lenders and investors if we believe we can
    ultimately foreclose or otherwise acquire ownership of the
    underlying property in the near-term through foreclosure,
    <FONT style="white-space: nowrap">deed-in-lieu</FONT>
    of foreclosure or other means. However, if we do acquire such
    debt, borrowers may seek to assert various defenses to our
    foreclosure or other actions and we may not be successful in
    acquiring the underlying property on a timely basis, or at all,
    in which event we could incur significant costs and experience
    significant delays in acquiring such properties, all of which
    could adversely affect our financial performance and reduce our
    expected returns from such investments. In addition, we may not
    earn a current return on such investments particularly if the
    loan that we acquire is in default.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to the Lodging Industry</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Current
    economic conditions may reduce demand for hotel properties and
    adversely affect hotel profitability.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The performance of the lodging industry has historically been
    closely linked to the performance of the general economy and,
    specifically, growth in U.S.&#160;GDP. It is also sensitive to
    business and personal discretionary spending levels. Declines in
    corporate travel budgets and consumer demand due to adverse
    general economic conditions, such as declines in U.S. GDP, risks
    affecting or reducing travel patterns, lower consumer confidence
    or adverse political conditions can lower the revenues and
    profitability of hotel properties and therefore the net
    operating profits of our TRS lessees to whom we intend to lease
    the hotel properties that we expect to acquire. The current
    global economic downturn has led to a significant decline in
    demand for products and services provided by the lodging
    industry, lower occupancy levels and significantly reduced room
    rates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We anticipate that recovery of demand for products and services
    provided by the lodging industry will lag improvement in
    economic conditions. We cannot predict how severe or prolonged
    the global economic downturn will be or how severe or prolonged
    the lodging industry downturn will be. A further extended period
    of economic weakness would likely have an adverse impact on our
    revenues and negatively affect our financial condition, results
    of operations, the market price of our common shares and our
    ability to make distributions to our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    operating results and ability to make distributions to our
    shareholders may be adversely affected by various operating
    risks common to the lodging industry.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We plan to own hotel properties which have different economic
    characteristics than many other real estate assets and a hotel
    REIT is structured differently than many other types of REITs. A
    typical office property owner, for example, has long-term leases
    with third-party tenants, which provides a relatively stable
    long-term stream of revenue. Our TRS lessees, on the other hand,
    will not enter into a lease with a hotel manager. Instead, our
    TRS lessees will engage the hotel manager pursuant to a
    management contract and will pay the manager a fee for managing
    the hotel. The TRS lessees will receive all the operating profit
    or losses at the hotel. Moreover, virtually all hotel guests
    stay at the hotel for only a few nights, so the rate and
    occupancy at each of our hotels changes every day. As a result,
    we may have highly volatile earnings.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, our hotel properties will be subject to various
    operating risks common to the lodging industry, many of which
    are beyond our control, including the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    competition from other hotel properties in our markets;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    over-building of hotels in our markets, which could adversely
    affect occupancy and revenues at the hotel properties we acquire;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    dependence on business and commercial travelers and tourism;
</TD>
</TR>

</TABLE>
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<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    increases in energy costs and other expenses affecting travel,
    which may affect travel patterns and reduce the number of
    business and commercial travelers and tourists;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    increases in operating costs due to inflation and other factors
    that may not be offset by increased room rates;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    changes in interest rates and in the availability, cost and
    terms of debt financing;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    changes in governmental laws and regulations, fiscal policies
    and zoning ordinances and the related costs of compliance with
    laws and regulations, fiscal policies and ordinances;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    adverse effects of international, national, regional and local
    economic and market conditions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    unforeseen events beyond our control, such as terrorist attacks,
    travel related health concerns including pandemics and epidemics
    such as H1N1 influenza (swine flu), avian bird flu and SARS,
    political instability, regional hostilities, imposition of taxes
    or surcharges by regulatory authorities, travel related
    accidents and unusual weather patterns, including natural
    disasters such as hurricanes, tsunamis or earthquakes;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    adverse effects of a downturn in the lodging industry;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    risks generally associated with the ownership of hotel
    properties and real estate, as we discuss in more detail below.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These factors could reduce the net operating profits of our TRS
    lessees, which in turn could adversely affect our financial
    condition, results of operations, the market price of our common
    shares and our ability to make distributions to our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Competition
    for acquisitions may reduce the number of properties we can
    acquire.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect to compete for investment opportunities with entities
    that may have substantially greater financial resources than we
    have. These entities generally may be able to accept more risk
    than we can prudently manage. This competition may generally
    limit the number of suitable investment opportunities offered to
    us or the number of properties that we are able to acquire. This
    competition may also increase the bargaining power of property
    owners seeking to sell to us, making it more difficult for us to
    acquire new properties on attractive terms.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    seasonality of the lodging industry may cause fluctuations in
    our quarterly revenues that cause us to borrow money to fund
    distributions to our shareholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The lodging industry is seasonal in nature. This seasonality can
    be expected to cause quarterly fluctuations in our revenues. Our
    quarterly earnings may be adversely affected by factors outside
    our control, including weather conditions and poor economic
    factors. As a result, we may have to enter into short-term
    borrowings in certain quarters in order to offset these
    fluctuations in revenues and to make distributions to our
    shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    cyclical nature of the lodging industry may cause the returns
    from our investments to be less than we expect.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The lodging industry is highly cyclical in nature. Fluctuations
    in lodging demand and, therefore, hotel operating performance,
    are caused largely by general economic and local market
    conditions, which subsequently affect levels of business and
    leisure travel. In addition to general economic conditions, new
    hotel room supply is an important factor that can affect lodging
    industry fundamentals, and overbuilding has the potential to
    further exacerbate the negative impact of an economic recession.
    Room rates and occupancy, and thus RevPAR, tend to increase when
    demand growth exceeds supply growth. Although we believe that
    cyclical supply growth peaked in late 2008 to early 2009, and
    that lodging demand will begin to rebound in late 2010 to early
    2011, no assurances can be given that this will prove to be the
    case. The continued decline in lodging demand beyond late 2010
    to early 2011, or a continued growth in lodging supply, could
    result in continued
</DIV>
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    deterioration in lodging industry fundamentals and returns that
    are substantially below expectations, or result in losses, which
    could adversely affect our financial condition, results of
    operations, the market price of our common shares and our
    ability to make distributions to our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Due to
    our concentration in hotel investments, a downturn in the
    lodging industry would adversely affect our operations and
    financial condition.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our entire business will be hotel-related. Therefore, a downturn
    in the lodging industry, in general, and the segments and
    markets in which we operate, in particular, would have a
    material adverse effect on our financial condition, results of
    operations, the market price of our common shares and our
    ability to make distributions to our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Capital
    expenditure requirements at our properties may be costly and
    require us to incur debt, postpone improvements, reduce
    distributions or otherwise adversely affect the results of our
    operations and the market price of our common
    shares.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Some of the hotel properties we acquire may have a need for
    renovations and capital improvements at the time of acquisition
    and all the hotel properties we acquire will have an ongoing
    need for renovations and other capital improvements, including
    replacement, from time to time, of furniture, fixtures and
    equipment. The franchisors of hotel properties that we acquire
    will also require periodic capital improvements as a condition
    to our maintaining the franchise licenses. In addition, if we
    incur indebtedness, as we intend to do in the future, our
    lenders will likely require that we set aside annual amounts for
    capital improvements to our hotel properties. These capital
    improvements may give rise to the following risks:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    possible environmental problems;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    construction cost overruns and delays;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the possibility that revenues will be reduced while rooms or
    restaurants are out of service due to capital improvement
    projects;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    a possible shortage of available cash to fund capital
    improvements and the related possibility that financing for
    these capital improvements may not be available to us on
    attractive terms;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    uncertainties as to market demand or a loss of market demand
    after capital improvements have begun.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The costs of renovations and capital improvements could
    adversely affect our financial condition, results of operations,
    the market price of our common shares and our ability to make
    distributions to our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Hotel
    and resort development and redevelopment is subject to timing,
    budgeting and other risks that may adversely affect our
    financial condition, results of operations, the market price of
    our common shares and our ability to make distributions to our
    shareholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Though not currently intended to be a primary focus of our
    initial investment strategy, we may engage in hotel development
    and redevelopment if suitable opportunities arise. Hotel
    development and redevelopment involves a number of risks,
    including risks associated with:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    construction delays or cost overruns that may increase project
    costs;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the receipt of zoning, occupancy and other required governmental
    permits and authorizations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    development costs incurred for projects that are not pursued to
    completion;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    acts of God such as earthquakes, hurricanes, floods or fires
    that could adversely impact a project;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the negative impact of construction on operating performance
    during and soon after the construction period;
</TD>
</TR>

</TABLE>
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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the ability to raise capital;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    governmental restrictions on the nature or size of a project.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We cannot assure you that any development or redevelopment
    project will be completed on time or within budget. Our
    inability to complete a project on time or within budget could
    adversely affect our financial condition, results of operations,
    the market price of our common shares and our ability to make
    distributions to our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    increasing use of Internet travel intermediaries by consumers
    may reduce our revenues.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect that some of our hotel rooms will be booked through
    Internet travel intermediaries, such as Travelocity.com,
    Expedia.com and Priceline.com. As these Internet bookings
    increase, these intermediaries may be able to obtain higher
    commissions, reduced room rates or other significant contract
    concessions from the management companies that will operate the
    hotels we acquire. Moreover, some of these Internet travel
    intermediaries are attempting to offer hotel rooms as a
    commodity, by increasing the importance of price and general
    indicators of quality (such as &#147;three-star downtown
    hotel&#148;), at the expense of brand identification or quality
    of product or service. These intermediaries hope that consumers
    will eventually develop brand loyalties to their reservations
    system rather than to lodging brands or properties. If the
    amount of bookings made through Internet travel intermediaries
    proves to be more significant than we expect, room revenues may
    be lower than expected, and our financial condition, results of
    operations, the market price of our common shares and our
    ability to make distributions to our shareholders may be
    adversely affected.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    be adversely affected by increased use of business related
    technology which may reduce the need for business related
    travel.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The increased use of teleconference and video-conference
    technology by businesses could result in decreased business
    travel as companies increase the use of technologies that allow
    multiple parties from different locations to participate at
    meetings without traveling to a centralized meeting location. To
    the extent that such technologies play an increased role in
    day-to-day business and the necessity for business related
    travel decreases, hotel room demand may decrease and our
    financial condition, results of operations, the market price of
    our common shares and our ability to make distributions to our
    shareholders may be adversely affected.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Future
    terrorist attacks or changes in terror alert levels could
    adversely affect travel and hotel demand.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Previous terrorist attacks and subsequent terrorist alerts have
    adversely affected the U.S.&#160;travel and hospitality
    industries over the past several years, often disproportionately
    to the effect on the overall economy. The impact that terrorist
    attacks in the U.S.&#160;or elsewhere could have on domestic and
    international travel and our business in particular cannot be
    determined but any such attacks or the threat of such attacks
    could have a material adverse effect on our business, our
    ability to finance our business, our ability to insure our
    properties and our results of operations and financial condition.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    outbreak of influenza or other widespread contagious disease
    could reduce travel and adversely affect hotel
    demand.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The widespread outbreak of infectious or contagious disease in
    the U.S., such as the H1N1 virus, could reduce travel and
    adversely affect the hotel industry generally and our business
    in particular.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Uninsured
    and underinsured losses could result in a loss of
    capital.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to maintain comprehensive insurance on each of our
    hotel properties, including liability, fire and extended
    coverage, of the type and amount we believe are customarily
    obtained for or by hotel owners. There are no assurances that
    coverage will be available at reasonable rates. Various types of
    catastrophic losses, like earthquakes and floods, and losses
    from terrorist activities may not be insurable or may not be
    economically insurable. Initially, we do not expect to obtain
    terrorism insurance on the hotel
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    properties we acquire because it is too costly. However, lenders
    may require such insurance and our failure to obtain such
    insurance could constitute a default under loan agreements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the event of a substantial loss, our insurance coverage may
    not be sufficient to cover the full current market value or
    replacement cost of our lost investment. Should an uninsured
    loss or a loss in excess of insured limits occur, we could lose
    all or a portion of the capital we have invested in a hotel
    property, as well as the anticipated future revenue from the
    property. In that event, we might nevertheless remain obligated
    for any mortgage debt or other financial obligations related to
    the property. Inflation, changes in building codes and
    ordinances, environmental considerations and other factors might
    also keep us from using insurance proceeds to replace or
    renovate a hotel after it has been damaged or destroyed. Under
    those circumstances, the insurance proceeds we receive might be
    inadequate to restore our economic position on the damaged or
    destroyed property.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    hotels may be subject to unknown or contingent liabilities which
    could cause us to incur substantial costs.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The hotel properties that we acquire may be subject to unknown
    or contingent liabilities for which we may have no recourse, or
    only limited recourse, against the sellers. In general, the
    representations and warranties provided under the transaction
    agreements related to the sales of the hotel properties may not
    survive the closing of the transactions. While we will likely
    seek to require the sellers to indemnify us with respect to
    breaches of representations and warranties that survive, such
    indemnification may be limited and subject to various
    materiality thresholds, a significant deductible or an aggregate
    cap on losses. As a result, there is no guarantee that we will
    recover any amounts with respect to losses due to breaches by
    the sellers of their representations and warranties. In
    addition, the total amount of costs and expenses that may be
    incurred with respect to liabilities associated with these
    hotels may exceed our expectations, and we may experience other
    unanticipated adverse effects, all of which may adversely affect
    our financial condition, results of operations, the market price
    of our common shares and our ability to make distributions to
    our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Noncompliance
    with environmental laws and regulations could subject us to
    fines and liabilities which could adversely affect our operating
    results.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our hotel properties will be subject to various federal, state
    and local environmental laws. Under these laws, courts and
    government agencies have the authority to require us, as owner
    of a contaminated property, to clean up the property, even if we
    did not know of or were not responsible for the contamination.
    These laws also apply to persons who owned a property at the
    time it became contaminated, and therefore it is possible we
    could incur cleanup costs even after we sell some of the
    properties we acquire. In addition to the costs of cleanup,
    environmental contamination can affect the value of a property
    and, therefore, an owner&#146;s ability to borrow funds using
    the property as collateral or to sell the property. Under the
    environmental laws, courts and government agencies also have the
    authority to require that a person who sent waste to a waste
    disposal facility, such as a landfill or an incinerator, pay for
    the <FONT style="white-space: nowrap">clean-up</FONT>
    of that facility if it becomes contaminated and threatens human
    health or the environment. A person that arranges for the
    disposal or transports for disposal or treatment of a hazardous
    substance at a property owned by another may be liable for the
    costs of removal or remediation of hazardous substances released
    into the environment at that property.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Furthermore, various court decisions have established that third
    parties may recover damages for injury caused by property
    contamination. For instance, a person exposed to asbestos while
    staying in a hotel may seek to recover damages if he or she
    suffers injury from the asbestos. Lastly, some of these
    environmental laws restrict the use of a property or place
    conditions on various activities. An example would be laws that
    require a business using chemicals (such as swimming pool
    chemicals at a hotel property) to manage them carefully and to
    notify local officials that the chemicals are being used.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We could be responsible for any of the costs discussed above.
    The costs to clean up a contaminated property, to defend against
    a claim, or to comply with environmental laws could be material
    and could adversely affect our financial condition, results of
    operations, the market price of our common shares and our
    ability to make distributions to our shareholders.
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a result, we may become subject to material environmental
    liabilities. We can make no assurances that future laws or
    regulations will not impose material environmental liabilities
    or that the current environmental condition of our hotel
    properties will not be affected by the condition of the
    properties in the vicinity of our hotel properties (such as the
    presence of leaking underground storage tanks) or by third
    parties unrelated to us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Compliance
    with the Americans with Disabilities Act could require us to
    incur substantial costs.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the Americans with Disabilities Act of 1990, or the ADA,
    all public accommodations must meet various federal requirements
    related to access and use by disabled persons. Compliance with
    the ADA&#146;s requirements could require removal of access
    barriers, and non-compliance could result in the
    U.S.&#160;government imposing fines or in private litigants
    winning damages.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In June 2008, the Department of Justice proposed a substantial
    number of changes to the Accessibility Guidelines under the ADA.
    In January 2009, President Obama suspended final publication and
    implementation of these regulations, pending a comprehensive
    review by his administration. If implemented as proposed, the
    new guidelines could cause some of our hotel properties to incur
    costly measures to become fully compliant.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we are required to make substantial modifications to our
    hotel properties, whether to comply with the ADA or other
    changes in governmental rules and regulations, our financial
    condition, results of operations, the market price of our common
    shares and our ability to make distributions to our shareholders
    could be adversely affected.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    Employee Free Choice Act could substantially increase the cost
    of doing business by increasing wage and benefit
    costs.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A number of members of the U.S.&#160;Congress and President
    Obama have stated that they support the Employee Free Choice
    Act, which, if enacted, would discontinue the current practice
    of having an open process where both the union and the employer
    are permitted to educate employees regarding the pros and cons
    of joining a union before having an election by secret ballot.
    Under the Employee Free Choice Act, the employees would only
    hear the union&#146;s side of the argument before making a
    commitment to join the union. The Employee Free Choice Act would
    permit unions to quietly collect employee signatures supporting
    the union without notifying the employer and permitting the
    employer to explain its views before a final decision is made by
    the employees. Once a union has collected signatures from a
    majority of the employees, the employer would have to recognize,
    and bargain with, the union. If the employer and the union fail
    to reach agreement on a collective bargaining contract within a
    certain number of days, both sides would be forced to submit
    their respective proposals to binding arbitration and a federal
    arbitrator would be permitted to create an employment contract
    binding on the employer. If the Employee Free Choice Act is
    enacted, a number of the hotel properties we will own or seek to
    acquire could become unionized.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Generally, unionized hotel employees are subject to a number of
    work rules which increase expenses and decrease operating
    margins at unionized hotels. We believe that the unionization of
    hotel employees at hotels that we acquire may result in a
    significant decline in hotel profitability and value, which
    could adversely affect our financial condition, results of
    operations, the market price of our common shares and our
    ability to make distributions to our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">General
    Risks Related to the Real Estate Industry</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Illiquidity
    of real estate investments could significantly impede our
    ability to sell hotels or otherwise respond to adverse changes
    in the performance of our hotel properties.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because real estate investments are relatively illiquid, our
    ability to promptly sell one or more hotel properties for
    reasonable prices in response to changing economic, financial
    and investment conditions will be limited. The real estate
    market is affected by many factors beyond our control, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    adverse changes in international, national, regional and local
    economic and market conditions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    changes in interest rates and in the availability, cost and
    terms of debt financing;
</TD>
</TR>

</TABLE>
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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    changes in governmental laws and regulations, fiscal policies
    and zoning ordinances and the related costs of compliance with
    laws and regulations, fiscal policies and ordinances;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the ongoing need for capital improvements, particularly in older
    structures;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    changes in operating expenses;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    civil unrest, acts of God, including earthquakes, floods and
    other natural disasters, which may result in uninsured losses,
    and acts of war or terrorism.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may decide to sell hotel properties in the future. We cannot
    predict whether we will be able to sell any hotel property for
    the price or on the terms set by us, or whether any price or
    other terms offered by a prospective purchaser would be
    acceptable to us. We also cannot predict the length of time
    needed to find a willing purchaser and to close the sale of a
    hotel property.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may be required to expend funds to correct defects or to make
    improvements before a hotel property can be sold. We cannot
    assure you that we will have funds available to correct those
    defects or to make those improvements. In acquiring a hotel
    property, we may agree to lock-out provisions that materially
    restrict us from selling that property for a period of time or
    impose other restrictions, such as a limitation on the amount of
    debt that can be placed or repaid on that property. These
    factors and any others that would impede our ability to respond
    to adverse changes in the performance of the hotel properties or
    a need for liquidity could adversely affect our financial
    condition, results of operations, the market price of our common
    shares and our ability to make distributions to our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Increases
    in property taxes would increase our operating costs, reduce our
    income and adversely affect our ability to make distributions to
    our shareholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each of our hotel properties will be subject to real and
    personal property taxes. These taxes may increase as tax rates
    change and as the properties are assessed or reassessed by
    taxing authorities. If property taxes increase, our financial
    condition, results of operations and our ability to make
    distributions to our shareholders could be materially and
    adversely affected and the market price of our common shares
    could decline.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    costs of compliance with or liabilities under environmental laws
    could significantly reduce our profitability.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Operating expenses at our hotels could be higher than
    anticipated due to the cost of complying with existing or future
    environmental laws and regulations. In addition, an owner of
    real property can face liability for environmental contamination
    created by the presence or discharge of hazardous substances on
    the property. We may face liability regardless of:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

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<TR>
    <TD width="7%"></TD>
    <TD width="2%"></TD>
    <TD width="91%"></TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    our lack of knowledge of the contamination;
</TD>
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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the timing of the contamination;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the cause of the contamination;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;
</TD>
    <TD align="left">
    the party responsible for the contamination of the property.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Environmental laws also impose ongoing compliance requirements
    on owners and operators of real property. Environmental laws
    potentially affecting us address a wide variety of matters,
    including, but not limited to, asbestos-containing building
    materials, storage tanks, storm water and wastewater discharges,
    lead-based paint, mold/mildew and hazardous wastes. Failure to
    comply with these laws could result in fines and penalties
    <FONT style="white-space: nowrap">and/or</FONT>
    expose us to third-party liability. Some of our properties may
    have conditions that are subject to these requirements, and we
    could be liable for such fines or penalties
    <FONT style="white-space: nowrap">and/or</FONT>
    liable to third parties, as described below in &#147;Our
    Business&#160;&#151; Environmental Matters.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain hotel properties we may own in the future may contain,
    or may have contained, asbestos-containing building materials,
    or ACBMs. Environmental laws require that ACBMs be properly
    managed and maintained, and may impose fines and penalties on
    building owners and operators for failure to comply with
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    these requirements. Also, certain properties may be adjacent or
    near other properties that have contained or currently contain
    storage tanks for the storage of petroleum products or other
    hazardous or toxic substances. These operations create a
    potential for the release of petroleum products or other
    hazardous or toxic substances. Third parties may be permitted by
    law to seek recovery from owners or operators for property
    damage
    <FONT style="white-space: nowrap">and/or</FONT>
    personal injury associated with exposure to contaminants,
    including, but not limited to, petroleum products, hazardous or
    toxic substances and asbestos fibers.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although we expect to obtain Phase I environmental site
    assessments on hotel properties we acquire in the future, Phase
    I environmental site assessments are intended to evaluate
    information regarding the environmental condition of the
    surveyed property and surrounding properties based generally on
    visual observations, interviews and certain publicly available
    databases. These assessments do not typically take into account
    all environmental issues including, but not limited to, testing
    of soil or groundwater or the possible presence of asbestos,
    lead-based paint, radon, wetlands or mold. As a result, these
    assessments may fail to reveal all environmental conditions,
    liabilities or compliance concerns. Material environmental
    conditions, liabilities or compliance concerns may arise after
    the Phase I assessments; and future laws, ordinances or
    regulations may impose material additional environmental
    liability. We cannot assure you that costs of future
    environmental compliance will not affect our ability to make
    distributions to our shareholders or that such costs or other
    remedial measures will not be material to us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The presence of hazardous substances on a property may limit our
    ability to sell the property on favorable terms or at all, and
    we may incur substantial remediation costs. The discovery of
    material environmental liabilities at our properties could
    subject us to unanticipated significant costs, which could
    significantly reduce our profitability and the cash available
    for distribution to our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    properties may contain or develop harmful mold, which could lead
    to liability for adverse health effects and costs of remediating
    the problem.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    When excessive moisture accumulates in buildings or on building
    materials, mold growth may occur, particularly if the moisture
    problem remains undiscovered or is not addressed over a period
    of time. Some molds may produce airborne toxins or irritants.
    Concern about indoor exposure to mold has been increasing as
    exposure to mold may cause a variety of adverse health effects
    and symptoms, including allergic or other reactions. Some of the
    properties in our portfolio may contain microbial matter such as
    mold and mildew. The presence of significant mold at any of our
    properties could require us to undertake a costly remediation
    program to contain or remove the mold from the affected
    property. The presence of significant mold could expose us to
    liability from hotel guests, hotel employees and others if
    property damage or health concerns arise.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Any
    mortgage debt obligations we incur will expose us to increased
    risk of property losses to foreclosure, which could adversely
    affect our financial condition, cash flow and ability to satisfy
    our other debt obligations and make distributions to our
    shareholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Incurring mortgage debt increases our risk of property losses,
    because any defaults on indebtedness secured by properties may
    result in foreclosure actions initiated by lenders and
    ultimately our loss of the property securing the loan for which
    we are in default. For tax purposes, a foreclosure of any of our
    properties would be treated as a sale of the property for a
    purchase price equal to the outstanding balance of the debt
    secured by the mortgage. If the outstanding balance of the debt
    secured by the mortgage exceeds our tax basis in the property,
    we would recognize taxable income on foreclosure but would not
    receive any cash proceeds. As a result, we may be required to
    identify and utilize other sources of cash for distributions to
    our shareholders of that income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, any default under our mortgage debt obligations may
    increase the risk of our default on other indebtedness. If this
    occurs, our financial condition, results of operations, the
    market price of our common shares and our ability to make
    distributions to our shareholders may be adversely affected.
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to Our Organization and Structure</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Provisions
    of our declaration of trust may limit the ability of a third
    party to acquire control of us by authorizing our board of
    trustees to authorize issuances of additional
    securities.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon completion of this offering, our declaration of trust will
    authorize our board of trustees to issue up to
    500,000,000&#160;common shares and up to
    100,000,000&#160;preferred shares. In addition, our board of
    trustees may, without shareholder approval, amend our
    declaration of trust to increase the aggregate number of our
    shares or the number of shares of any class or series that we
    have the authority to issue and to classify or reclassify any
    unissued common shares or preferred shares and to set the
    preferences, rights and other terms of the classified or
    reclassified shares. As a result, our board of trustees may
    authorize the issuance of additional shares or establish a
    series of common or preferred shares that may have the effect of
    delaying or preventing a change in control of our company,
    including transactions at a premium over the market price of our
    shares, even if shareholders believe that a change of control is
    in their interest.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Provisions
    of Maryland law may limit the ability of a third party to
    acquire control of us by requiring our board of trustees or
    shareholders to approve proposals to acquire our company or
    effect a change of control.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain provisions of the Maryland General Corporation Law, or
    the MGCL, applicable to Maryland real estate investment trusts
    may have the effect of inhibiting a third party from making a
    proposal to acquire us or of impeding a change of control under
    circumstances that otherwise could provide our common
    shareholders with the opportunity to realize a premium over the
    then-prevailing market price of such shares, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    <I>&#147;business combination&#148; </I>provisions that, subject
    to limitations, prohibit certain business combinations between
    us and an &#147;interested shareholder&#148; (defined generally
    as any person who beneficially owns 10% or more of the voting
    power of our shares) or an affiliate of any interested
    shareholder for five years after the most recent date on which
    the shareholder becomes an interested shareholder, and
    thereafter imposes special appraisal rights and special
    shareholder voting requirements on these combinations;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    <I>&#147;control share&#148; </I>provisions that provide that
    our &#147;control shares&#148; (defined as shares which, when
    aggregated with other shares controlled by the shareholder,
    entitle the shareholder to exercise one of three increasing
    ranges of voting power in electing trustees) acquired in a
    &#147;control share acquisition&#148; (defined as the direct or
    indirect acquisition of ownership or control of &#147;control
    shares&#148;) have no voting rights except to the extent
    approved by our shareholders by the affirmative vote of at least
    two-thirds of all the votes entitled to be cast on the matter,
    excluding all interested shares.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    By resolution of our board of trustees, we have opted out of the
    business combination provisions of the MGCL and provided that
    any business combination between us and any other person is
    exempt from the business combination provisions of the MGCL,
    provided that the business combination is first approved by our
    board of trustees (including a majority of trustees who are not
    affiliates or associates of such persons). Pursuant to a
    provision in our bylaws, we have opted out of the control share
    provisions of the MGCL. However, our board of trustees may by
    resolution elect to opt in to the business combination
    provisions of the MGCL and we may, by amendment to our bylaws,
    opt in to the control share provisions of the MGCL in the future.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Additionally, Title&#160;8, Subtitle 3 of the MGCL permits our
    board of trustees, without shareholder approval and regardless
    of what is currently provided in our declaration of trust or
    bylaws, to implement certain takeover defenses, such as a
    classified board, some of which we do not yet have. These
    provisions may have the effect of inhibiting a third party from
    making an acquisition proposal for us or of delaying, deferring
    or preventing a change in control of us under the circumstances
    that otherwise could provide our common shareholders with the
    opportunity to realize a premium over the then current market
    price.
</DIV>
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    ownership limitations in our declaration of trust may restrict
    or prevent you from engaging in certain transfers of our common
    shares.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order for us to qualify as a REIT for each taxable year after
    2009, no more than 50% in value of our outstanding shares of
    beneficial interest may be owned, directly or indirectly, by
    five or fewer individuals (as defined in the federal income tax
    laws to include various kinds of entities) during the last half
    of any taxable year. To assist us in qualifying as a REIT, our
    declaration of trust contains a share ownership limit.
    Generally, any of our shares owned by affiliated owners will be
    added together for purposes of the share ownership limit.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If anyone transfers shares in a way that would violate the share
    ownership limit or prevent us from qualifying as a REIT under
    the federal income tax laws, those shares instead will be
    transferred to a trust for the benefit of a charitable
    beneficiary and will be either redeemed by us or sold to a
    person whose ownership of the shares will not violate the share
    ownership limit or we will consider the transfer to be null and
    void from the outset, and the intended transferee of those
    shares will be deemed never to have owned the shares. Anyone who
    acquires shares in violation of the share ownership limit or the
    other restrictions on transfer in our declaration of trust bears
    the risk of suffering a financial loss when the shares are
    redeemed or sold if the market price of our shares falls between
    the date of purchase and the date of redemption or sale.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, these ownership limitations may prevent an
    acquisition of control of us by a third party without our board
    of trustees&#146; approval, even if our shareholders believe the
    change of control is in their interest.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    rights and the rights of our shareholders to take action against
    our trustees and officers are limited, which could limit your
    recourse in the event of actions not in your best
    interests.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under Maryland law, generally, a trustee&#146;s actions will be
    upheld if he or she performs his or her duties in good faith, in
    a manner he or she reasonably believes to be in our best
    interests and with the care that an ordinarily prudent person in
    a like position would use under similar circumstances. In
    addition, our declaration of trust limits the liability of our
    trustees and officers to us and our shareholders for money
    damages, except for liability resulting from:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    actual receipt of an improper benefit or profit in money,
    property or services;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    active and deliberate dishonesty by the trustee or officer that
    was established by a final judgment as being material to the
    cause of action adjudicated.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our declaration of trust authorizes us to indemnify our trustees
    and officers for actions taken by them in those capacities to
    the maximum extent permitted by Maryland law. Our bylaws require
    us to indemnify each trustee or officer, to the maximum extent
    permitted by Maryland law, in the defense of any proceeding to
    which he or she is made, or threatened to be made, a party by
    reason of his or her service to us. In addition, we may be
    obligated to fund the defense costs incurred by our trustees and
    officers. As a result, we and our shareholders may have more
    limited rights against our trustees and officers than might
    otherwise exist absent the current provisions in our declaration
    of trust and bylaws or that might exist with other companies.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    declaration of trust contains provisions that make removal of
    our trustees difficult, which could make it difficult for our
    shareholders to effect changes to our management.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our declaration of trust provides that a trustee may be removed
    only for cause (as defined in our declaration of trust) and then
    only by the affirmative vote of at least two-thirds of the votes
    entitled to be cast generally in the election of trustees. Our
    declaration of trust also provides that vacancies on our board
    of trustees may be filled only by a majority of the remaining
    trustees in office, even if less than a quorum. These
    requirements prevent shareholders from removing trustees except
    for cause and with a substantial affirmative vote and from
    replacing trustees with their own nominees and may prevent a
    change in control of our company that is in the best interests
    of our shareholders.
</DIV>
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    ability of our board of trustees to change our major policies
    without the consent of shareholders may not be in your
    interest.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of trustees determines our major policies, including
    policies and guidelines relating to our acquisitions, leverage,
    financing, growth, operations and distributions to shareholders.
    Our board may amend or revise these and other policies and
    guidelines from time to time without the vote or consent of our
    shareholders. Accordingly, our shareholders will have limited
    control over changes in our policies and those changes could
    adversely affect our financial condition, results of operations,
    the market price of our common shares and our ability to make
    distributions to our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    will enter into an agreement with each of our executive officers
    that will require us to make payments in the event the
    officer&#146;s employment is terminated by us without cause, by
    the officer for good reason or under certain circumstances
    following a change of control of our company.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The agreements that we will enter into with our executive
    officers upon completion of this offering provide benefits under
    certain circumstances that could make it more difficult for us
    to terminate these officers and may prevent or deter a change of
    control of our company that would otherwise be in the interest
    of our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If we
    fail to implement and maintain an effective system of internal
    controls, we may not be able to accurately determine our
    financial results or prevent fraud. As a result, our
    shareholders could lose confidence in our financial results,
    which could harm our business and the value of our common
    shares.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Effective internal controls are necessary for us to provide
    reliable financial reports and effectively prevent fraud. We are
    a newly formed company that will develop financial and
    operational reporting and control systems. We may in the future
    discover areas of our internal controls that need improvement.
    Section&#160;404 of the Sarbanes-Oxley Act of 2002 will require
    us to evaluate and report on our internal controls over
    financial reporting and have our independent auditors annually
    issue their own opinion on our internal controls over financial
    reporting. While we intend to undertake substantial work to
    prepare for compliance with Section&#160;404, we cannot be
    certain that we will be successful in implementing or
    maintaining adequate internal controls over our financial
    reporting and financial processes. Furthermore, as we grow our
    business, our internal controls will become more complex, and we
    will require significantly more resources to ensure our internal
    controls remain effective. If we or our independent auditors
    discover a material weakness, the disclosure of that fact, even
    if quickly remedied, could reduce the market value of our common
    shares. Additionally, the existence of any material weakness or
    significant deficiency would require management to devote
    significant time and incur significant expense to remediate any
    such material weaknesses or significant deficiencies and
    management may not be able to remediate any such material
    weaknesses or significant deficiencies in a timely manner.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Risks
    Related to This Offering</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    have not established a minimum distribution payment level and we
    may be unable to generate sufficient cash flows from our
    operations to make distributions to our shareholders at any time
    in the future.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To qualify for taxation as a REIT, we will be required to
    distribute to our shareholders at least 90% of our taxable
    income each year for us to qualify as a REIT under the Code. To
    the extent we satisfy the 90% distribution requirement but
    distribute less than 100% of our taxable income, we will be
    subject to a U.S.&#160;federal corporate income tax and a
    U.S.&#160;federal excise tax on our undistributed taxable
    income. We have not established a minimum distribution payment
    level, and our ability to make distributions to our shareholders
    may be adversely affected by the risk factors described in this
    prospectus. Because we currently have no hotel properties and
    will commence operations only upon completion of this offering,
    we may not generate sufficient income to make distributions to
    our shareholders and cannot predict when distributions
    consisting, in part, of cash flow from the hotels we expect to
    acquire will commence. We currently do not expect to use the net
    proceeds from this offering or the concurrent private placement
    to make distributions to our shareholders. However, to the
    extent we do so, the amount of cash we have available to invest
    in hotel properties or for other purposes would be reduced. Our
    board of trustees has the sole discretion to determine the
    timing, form
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    and amount of any distributions to our shareholders. The amount
    of such distributions may be limited until we have a portfolio
    of income-generating hotel properties. Our board of trustees
    will make determinations regarding distributions based upon,
    among other factors, our financial performance, any debt service
    obligations, any debt covenants, and capital expenditure
    requirements. Among the factors that could impair our ability to
    make distributions to our shareholders are:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our inability to invest the net proceeds of this offering and
    the concurrent private placement;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our inability to realize attractive risk-adjusted returns on our
    investments;
</TD>
</TR>

<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    unanticipated expenses or reduced revenues that reduce our cash
    flow or non-cash earnings;&#160;and
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    decreases in the value of our hotel properties.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a result, no assurance can be given that we will be able to
    make distributions to our shareholders at any time in the future
    or that the level of any distributions we do make to our
    shareholders will increase or even be maintained over time, any
    of which could materially and adversely affect the market price
    of our common shares.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, distributions that we make to our shareholders
    generally will be taxable to our shareholders as ordinary
    income. However, a portion of our distributions may be
    designated by us as long-term capital gains to the extent that
    they are attributable to capital gain income recognized by us or
    may constitute a return of capital to the extent that they
    exceed our accumulated earnings and profits as determined for
    tax purposes. A return of capital is not taxable, but has the
    effect of reducing the basis of a shareholder&#146;s investment
    in our common shares.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We
    cannot assure you that a public market for our common shares
    will develop and your ability to sell our common shares may be
    limited.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior to this offering, there has not been a public market for
    our common shares. We intend to apply to have our common shares
    listed on the New York Stock Exchange, or the NYSE. However, we
    cannot assure you that a regular trading market for our common
    shares will develop or, if one does develop, that any such
    market will be sustained. In the absence of a public trading
    market, an investor may be unable to liquidate an investment in
    our common shares. The initial public offering price has been
    determined by us and the representatives of the underwriters. We
    cannot assure you that the price at which the common shares will
    sell in the public market after the closing of this offering
    will not be lower than the price at which they are sold by the
    underwriters.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Common
    shares eligible for future sale may adversely affect the
    prevailing market prices for our common shares.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We cannot predict the effect, if any, of future sales of common
    shares, or the availability of common shares for future sale, on
    the market price of our common shares. Sales of substantial
    amounts of common shares (including shares issued to our
    trustees and officers), or the perception that these sales could
    occur, may adversely affect prevailing market prices for our
    common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each of our trustees and officers who has received share grants
    has entered into
    <FONT style="white-space: nowrap">lock-up</FONT>
    agreements with respect to their common shares, restricting the
    sale of such person&#146;s shares, for 180&#160;days. The
    representatives, at any time, may release all or a portion of
    the common shares subject to the foregoing
    <FONT style="white-space: nowrap">lock-up</FONT>
    provisions. If the restrictions under such agreements are
    waived, the affected common shares may be available for sale
    into the market, which could reduce the market price for our
    common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We also may issue from time to time additional common shares or
    limited partnership interests in our operating partnership in
    connection with the acquisition of properties and we may grant
    demand or piggyback registration rights in connection with these
    issuances. Sales of substantial amounts of our common shares or
    the perception that these sales could occur may adversely affect
    the prevailing market price for our common shares or may impair
    our ability to raise capital through a sale of additional equity
    securities.
</DIV>
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    market price of our common shares may be volatile due to
    numerous circumstances beyond our control.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The trading prices of equity securities issued by REITs
    historically have been affected by changes in market interest
    rates. One of the factors that may influence the price of our
    common shares is the annual yield from distributions on our
    common shares as compared to yields on other financial
    instruments. An increase in market interest rates, or a decrease
    in our distributions to shareholders, may lead prospective
    purchasers of our common shares to demand a higher annual yield,
    which could reduce the market price of our common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Other factors that could affect the market price of our common
    shares include the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    actual or anticipated variations in our quarterly results of
    operations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    changes in market valuations of companies in the hotel or real
    estate industries;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    changes in expectations of future financial performance or
    changes in estimates of securities analysts;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    fluctuations in stock market prices and volumes;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our issuances of common shares or other securities in the future;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the addition or departure of key personnel;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    announcements by us or our competitors of acquisitions,
    investments or strategic alliances;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    unforeseen events beyond our control, such as terrorist attacks,
    travel related health concerns including pandemics and epidemics
    such as H1N1 influenza (swine flu), avian bird flu and SARS,
    political instability, regional hostilities, increases in fuel
    prices, imposition of taxes or surcharges by regulatory
    authorities and travel related accidents and unusual weather
    patterns, including natural disasters such as hurricanes,
    tsunamis or earthquakes.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Future
    offerings of debt or equity securities ranking senior to our
    common shares may limit our operating and financial flexibility
    and may adversely affect the market price of our common
    shares.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we decide to issue debt or equity securities in the future
    ranking senior to our common shares or otherwise incur
    indebtedness, it is possible that these securities or
    indebtedness will be governed by an indenture or other
    instrument containing covenants restricting our operating
    flexibility and limiting our ability to make distributions to
    our shareholders. Additionally, any convertible or exchangeable
    securities that we issue in the future may have rights,
    preferences and privileges, including with respect to
    distributions, more favorable than those of our common shares
    and may result in dilution to owners of our common shares.
    Because our decision to issue debt or equity securities in any
    future offering or otherwise incur indebtedness will depend on
    market conditions and other factors beyond our control, we
    cannot predict or estimate the amount, timing or nature of our
    future offerings or financings, any of which could reduce the
    market price of our common shares and dilute the value of our
    common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Federal
    Income Tax Risk Factors</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    failure to qualify, or our failure to remain qualified, as a
    REIT would result in higher taxes and reduced cash available for
    distribution to our shareholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to elect to be taxed as a REIT for federal income tax
    purposes, commencing with our short taxable year beginning on
    the business day prior to the closing of this offering and
    ending December&#160;31, 2009. However, qualification as a REIT
    involves the application of highly technical and complex
    provisions of the Code, for which only a limited number of
    judicial and administrative interpretations exist. Even an
    inadvertent or technical mistake could jeopardize our REIT
    qualification. Our qualification as a REIT will depend on our
    satisfaction of certain asset, income, organizational,
    distribution, shareholder ownership and other requirements on a
    continuing basis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Moreover, new tax legislation, administrative guidance or court
    decisions, in each instance potentially applicable with
    retroactive effect, could make it more difficult or impossible
    for us to qualify as a REIT. If we
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    were to fail to qualify as a REIT in any taxable year, we would
    be subject to federal income tax, including any applicable
    alternative minimum tax, on our taxable income at regular
    corporate rates, and distributions to shareholders would not be
    deductible by us in computing our taxable income. Any such
    corporate tax liability could be substantial and would reduce
    the amount of cash available for distribution to our
    shareholders, which in turn could have an adverse impact on the
    value of our shares of beneficial interest. If, for any reason,
    we failed to qualify as a REIT and we were not entitled to
    relief under certain Code provisions, we would be unable to
    elect REIT status for the four taxable years following the year
    during which we ceased to so qualify which would negatively
    impact the value of our common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Failure
    to make required distributions would subject us to tax, which
    would reduce the cash available for distribution to our
    shareholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To qualify as a REIT, we must distribute to our shareholders
    each calendar year at least 90% of our REIT taxable income
    (including certain items of non-cash income), determined before
    the deduction for dividends paid and excluding any net capital
    gain. To the extent that we satisfy the 90% distribution
    requirement, but distribute less than 100% of our taxable
    income, we will be subject to federal corporate income tax on
    our undistributed income. In addition, we will incur a 4%
    nondeductible excise tax on the amount, if any, by which our
    distributions in any calendar year are less than the sum of:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    85% of our REIT ordinary income for that year;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    95% of our REIT capital gain net income for that year;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    any undistributed taxable income from prior years.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to distribute our net taxable income to our
    shareholders in a manner intended to satisfy the 90%
    distribution requirement and to avoid both corporate income tax
    and the 4% nondeductible excise tax. However, there is no
    requirement that TRSs distribute their after tax net income to
    their parent REIT or their shareholders.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our taxable income may substantially exceed our net income as
    determined based on GAAP, because, for example, realized capital
    losses will be deducted in determining our GAAP net income, but
    may not be deductible in computing our taxable income.
    Differences in timing between the recognition of income and the
    related cash receipts or the effect of required debt
    amortization payments could require us to borrow money or sell
    properties at prices or at times that we regard as unfavorable
    in order to pay out enough of our taxable income to satisfy the
    distribution requirement and to avoid corporate income tax and
    the 4% nondeductible excise tax in a particular year.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    formation of our TRS lessees increases our overall tax
    liability.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The TRS lessees will be subject to federal and state income tax
    on their taxable income, which will consist of the revenues from
    the hotel properties leased by the TRS lessees, net of the
    operating expenses for such hotel properties and rent payments
    to us. Accordingly, although our ownership of the TRS lessees
    will allow us to participate in the operating income from our
    hotel properties in addition to receiving rent, that operating
    income will be fully subject to income tax. The after-tax net
    income of the TRS lessees is available for distribution to us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Our
    ownership of our TRS lessees will be limited and our
    transactions with our TRS lessees will cause us to be subject to
    a 100% penalty tax on certain income or deductions if those
    transactions are not conducted on arm&#146;s-length
    terms.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A REIT may own up to 100% of the stock of one or more TRSs. A
    TRS may hold assets and earn income that would not be qualifying
    assets or income if held or earned directly by a REIT, including
    gross operating income from hotel operations pursuant to hotel
    management contracts. Both the subsidiary and the REIT must
    jointly elect to treat the subsidiary as a TRS. A corporation of
    which a TRS directly or indirectly owns more than 35% of the
    voting power or value of the stock will automatically be treated
    as a TRS. Overall, no more than 25% of the value of a
    REIT&#146;s assets may consist of stock or securities of one or
    more TRSs. In
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    addition, the TRS rules limit the deductibility of interest paid
    or accrued by a TRS to its parent REIT to assure that the TRS is
    subject to an appropriate level of corporate taxation. The rules
    also impose a 100% excise tax on certain transactions between a
    TRS and its parent REIT that are not conducted on an
    arm&#146;s-length basis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our TRS lessees will pay applicable federal, foreign, state and
    local income tax on their taxable income, and their after-tax
    net income will be available for distribution to us but is not
    required to be distributed by such domestic TRS lessee to us. We
    anticipate that the aggregate value of the stock and securities
    of our TRS lessees will be less than 25% of the value of our
    total assets (including our TRS lessees&#146; stock and
    securities). Furthermore, we will monitor the value of our
    respective investments in our TRS lessees for the purpose of
    ensuring compliance with TRS ownership limitations. In addition,
    we will scrutinize all of our transactions with our TRS lessees
    to ensure that they are entered into on arm&#146;s-length terms
    to avoid incurring the 100% excise tax described above. There
    can be no assurance, however, that we will be able to comply
    with the 25% limitation discussed above or to avoid application
    of the 100% excise tax discussed above.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If the
    leases of our hotel properties to our TRS lessees are not
    respected as true leases for federal income tax purposes, we
    would fail to qualify as a REIT and would be subject to higher
    taxes and have less cash available for distribution to our
    shareholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To qualify as a REIT, we must satisfy two gross income tests,
    under which specified percentages of our gross income must be
    derived from certain sources, such as &#147;rents from real
    property.&#148; Rents paid to our operating partnership by our
    TRS lessees pursuant to the lease of our hotel properties will
    constitute substantially all of our gross income. In order for
    such rent to qualify as &#147;rents from real property&#148; for
    purposes of the gross income tests, the leases must be respected
    as true leases for federal income tax purposes and not be
    treated as service contracts, joint ventures or some other type
    of arrangement. If our leases are not respected as true leases
    for federal income tax purposes, we would fail to qualify as a
    REIT.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If our
    operating partnership failed to qualify as a partnership for
    federal income tax purposes, we would cease to qualify as a REIT
    and would be subject to higher taxes and have less cash
    available for distribution to our shareholders and suffer other
    adverse consequences.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe that our operating partnership will qualify to be
    treated as a partnership for federal income tax purposes. As a
    partnership, our operating partnership will not be subject to
    federal income tax on its income. Instead, each of its partners,
    including us, will be required to pay tax on its allocable share
    of the operating partnership&#146;s income. No assurance can be
    provided, however, that the Internal Revenue Service, or IRS,
    will not challenge its status as a partnership for federal
    income tax purposes, or that a court would not sustain such a
    challenge. If the IRS were successful in treating our operating
    partnership as a corporation for tax purposes, we would fail to
    meet the gross income tests and certain of the asset tests
    applicable to REITs and, accordingly, cease to qualify as a
    REIT. Also, the failure of our operating partnership to qualify
    as a partnership would cause it to become subject to federal and
    state corporate income tax, which would reduce significantly the
    amount of cash available for debt service and for distribution
    to its partners, including us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">If our
    hotel managers do not qualify as &#147;eligible independent
    contractors,&#148; we would fail to qualify as a REIT and would
    be subject to higher taxes and have less cash available for
    distribution to our shareholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Rent paid by a lessee that is a &#147;related party tenant&#148;
    of ours will not be qualifying income for purposes of the two
    gross income tests applicable to REITs. We expect to lease
    substantially all of our hotels to our TRS lessees. So long as
    any TRS lessee qualifies as a TRS, it will not be treated as a
    &#147;related party tenant&#148; with respect to our properties
    that are managed by an independent hotel management company that
    qualifies as an &#147;eligible independent contractor.&#148; We
    believe that our TRSs will qualify to be treated as TRSs for
    federal income tax purposes, but there can be no assurance that
    the IRS will not challenge the status of a TRS for federal
    income tax purposes or that a court would not sustain such a
    challenge. If the IRS were successful in disqualifying any of
    our TRSs lessees from treatment as a TRS, it is possible that we
    would fail to meet the asset tests applicable to REITs and
    substantially all of our income would fail to qualify for the
    gross income tests. If we failed to meet either the asset or
    gross income tests, we would likely lose our REIT qualification
    for federal income tax purposes.
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Additionally, if our hotel managers do not qualify as
    &#147;eligible independent contractors,&#148; we would fail to
    qualify as a REIT. Each of the hotel management companies that
    enters into a management contract with our TRS lessees must
    qualify as an &#147;eligible independent contractor&#148; under
    the REIT rules in order for the rent paid to us by our TRS
    lessees to be qualifying income for purposes of the REIT gross
    income tests. Among other requirements, in order to qualify as
    an eligible independent contractor a manager must not own,
    directly or through its shareholders, more than 35% of our
    outstanding shares, taking into account certain ownership
    attribution rules. The ownership attribution rules that apply
    for purposes of these 35% thresholds are complex. Although we
    intend to monitor ownership of our shares by our hotel managers
    and their owners, there can be no assurance that these ownership
    levels will not be exceeded.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Dividends
    payable by REITs do not qualify for the reduced tax rates
    available for some dividends.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The maximum tax rate applicable to income from &#147;qualified
    dividends&#148; payable to U.S.&#160;shareholders that are
    individuals, trusts and estates has been reduced by legislation
    to 15% (through the end of 2010). Dividends payable by REITs,
    however, generally are not eligible for the reduced rates.
    Although this legislation does not adversely affect the taxation
    of REITs or dividends payable by REITs, the more favorable rates
    applicable to regular corporate qualified dividends could cause
    investors who are individuals, trusts and estates to perceive
    investments in REITs to be relatively less attractive than
    investments in the stocks of non-REIT corporations that pay
    dividends, which could adversely affect the value of the shares
    of REITs, including our common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Complying
    with REIT requirements may limit our ability to hedge our
    liabilities effectively and may cause us to incur tax
    liabilities.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The REIT provisions of the Code substantially limit our ability
    to hedge our liabilities. Any income from a hedging transaction
    we enter into to manage risk of interest rate changes, price
    changes or currency fluctuations with respect to borrowings made
    or to be made to acquire or carry real estate assets does not
    constitute &#147;gross income&#148; for purposes of the 75% or
    95% gross income tests. To the extent that we enter into other
    types of hedging transactions, the income from those
    transactions is likely to be treated as non-qualifying income
    for purposes of both of the gross income tests. See
    &#147;Material Federal Income Tax Considerations&#160;&#151;
    Gross Income Tests&#160;&#151; Hedging Transactions.&#148; As a
    result of these rules, we may need to limit our use of
    advantageous hedging techniques or implement those hedges
    through a TRS. This could increase the cost of our hedging
    activities because our TRS would be subject to tax on gains or
    expose us to greater risks associated with changes in interest
    rates than we would otherwise want to bear. In addition, losses
    in our TRSs will generally not provide any tax benefit, except
    for being carried forward against future taxable income in the
    TRSs.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Complying
    with REIT requirements may cause us to forego otherwise
    attractive business opportunities or liquidate otherwise
    attractive investments.</FONT></I></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To qualify as a REIT for federal income tax purposes, we must
    continually satisfy tests concerning, among other things, the
    sources of our income, the nature and diversification of our
    assets, the amounts we distribute to our shareholders and the
    ownership of our shares of beneficial interest. In order to meet
    these tests, we may be required to forego investments we might
    otherwise make. Thus, compliance with the REIT requirements may
    hinder our performance.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In particular, we must ensure that at the end of each calendar
    quarter, at least 75% of the value of our assets consists of
    cash, cash items, government securities and qualified real
    estate assets. The remainder of our investment in securities
    (other than government securities and qualified real estate
    assets) generally cannot include more than 10% of the
    outstanding voting securities of any one issuer or more than 10%
    of the total value of the outstanding securities of any one
    issuer. In addition, in general, no more than 5% of the value of
    our assets (other than government securities and qualified real
    estate assets) can consist of the securities of any one issuer,
    and no more than 25% of the value of our total assets can be
    represented by the securities of one or more TRSs. If we fail to
    comply with these requirements at the end of any calendar
    quarter, we must correct the failure within 30&#160;days after
    the end of the calendar quarter or qualify for certain statutory
    relief provisions to avoid losing our REIT qualification and
    suffering adverse tax consequences. As a result, we may be
    required to liquidate otherwise attractive investments. These
    actions could have the effect of reducing our income and amounts
    available for distribution to our shareholders.
</DIV>
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    ability of our board of trustees to revoke our REIT
    qualification without shareholder approval may subject us to
    federal income tax and reduce distributions to our
    shareholders.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our declaration of trust provides that our board of trustees may
    revoke or otherwise terminate our REIT election, without the
    approval of our shareholders, if it determines that it is no
    longer in our best interest to continue to qualify as a REIT. If
    we cease to be a REIT, we would become subject to federal income
    tax on our taxable income and would no longer be required to
    distribute most of our taxable income to our shareholders, which
    may have adverse consequences on our total return to our
    shareholders and on the market price of our common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">We may
    be subject to adverse legislative or regulatory tax changes that
    could increase our tax liability, reduce our operating
    flexibility and reduce the market price of our common
    shares.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At any time, the federal income tax laws governing REITs or the
    administrative and judicial interpretations of those laws may be
    amended. We cannot predict when or if any new federal income tax
    law, regulation, or administrative and judicial interpretation,
    or any amendment to any existing federal income tax law,
    regulation or administrative or judicial interpretation, will be
    adopted, promulgated or become effective and any such law,
    regulation, or interpretation may take effect retroactively. We
    and our shareholders could be adversely affected by any such
    change in, or any new, federal income tax law, regulation or
    administrative and judicial interpretation.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">The
    share ownership restrictions of the Code for REITs and the 9.8%
    share ownership limit in our declaration of trust may inhibit
    market activity in our shares of beneficial interest and
    restrict our business combination opportunities.</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order to qualify as a REIT for each taxable year after 2009,
    five or fewer individuals, as defined in the Code, may not own,
    actually or constructively, more than 50% in value of our issued
    and outstanding shares of beneficial interest at any time during
    the last half of a taxable year. Attribution rules in the Code
    determine if any individual or entity actually or constructively
    owns our shares of beneficial interest under this requirement.
    Additionally, at least 100&#160;persons must beneficially own
    our shares of beneficial interest during at least 335&#160;days
    of a taxable year for each taxable year after 2009. To help
    insure that we meet these tests, our declaration of trust
    restricts the acquisition and ownership of our shares of
    beneficial interest.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our declaration of trust, with certain exceptions, authorizes
    our trustees to take such actions as are necessary and desirable
    to preserve our qualification as a REIT. Unless exempted by our
    board of trustees, our declaration of trust prohibits any person
    from beneficially or constructively owning more than 9.8%
    (measured by value or number of shares, whichever is more
    restrictive) of any class or series of our shares of beneficial
    interest. Our board of trustees may not grant an exemption from
    these restrictions to any proposed transferee whose ownership in
    excess of 9.8% of the value of our outstanding shares would
    result in the termination of our qualification as a REIT. These
    restrictions on transferability and ownership will not apply,
    however, if our board of trustees determines that it is no
    longer in our best interest to continue to qualify as a REIT.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These ownership limits could delay or prevent a transaction or a
    change in control that might involve a premium price for our
    common shares or otherwise be in the best interest of the
    shareholders.
</DIV>
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    33
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<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CAUTIONARY
    NOTE&#160;REGARDING FORWARD-LOOKING STATEMENTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We make forward-looking statements in this prospectus that are
    subject to risks and uncertainties. These forward-looking
    statements include information about possible or assumed future
    results of our business, financial condition, liquidity, results
    of operations, plans and objectives. Statements regarding the
    following subjects are forward-looking by their nature.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our business and investment strategy;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our forecasted operating results;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    completion of hotel acquisitions;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our ability to obtain future financing arrangements;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our expected leverage levels;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our understanding of our competition;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    market and lodging industry trends and expectations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    anticipated capital expenditures;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    use of the net proceeds of this offering and the concurrent
    private placement.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The forward-looking statements are based on our beliefs,
    assumptions and expectations of our future performance, taking
    into account all information currently available to us. These
    beliefs, assumptions and expectations can change as a result of
    many possible events or factors, not all of which are known to
    us. If a change occurs, our business, prospects, financial
    condition, liquidity and results of operations may vary
    materially from those expressed in our forward-looking
    statements. You should carefully consider this risk when you
    make an investment decision concerning our common shares.
    Additionally, the following factors could cause actual results
    to vary from our forward-looking statements:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the factors discussed in this prospectus, including those set
    forth under the sections titled &#147;Risk Factors,&#148;
    &#147;Management&#146;s Discussion and Analysis of Financial
    Condition and Results of Operations&#148; and &#147;Our
    Business&#148;;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    general volatility of the capital markets and the market price
    of our common shares;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    performance of the lodging industry in general;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    changes in our business or investment strategy;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    availability, terms and deployment of capital;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    availability of and our ability to attract and retain qualified
    personnel;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our leverage levels;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our capital expenditures;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    changes in our industry and the market in which we operate,
    interest rates or the general U.S.&#160;or international
    economy;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the degree and nature of our competition.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    When we use the words &#147;will,&#148; &#147;will likely
    result,&#148; &#147;may,&#148; &#147;anticipate,&#148;
    &#147;estimate,&#148; &#147;should,&#148; &#147;expect,&#148;
    &#147;believe,&#148; &#147;intend&#148; or similar expressions,
    we intend to identify forward-looking statements. You should not
    place undue reliance on these forward-looking statements. We are
    not obligated to publicly update or revise any forward-looking
    statements, whether as a result of new information, future
    events or otherwise.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We obtained certain data provided in this prospectus from
    publicly available materials published by JLLH. The data was not
    prepared in connection with this offering.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    34
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='104'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">USE OF
    PROCEEDS</FONT></B>
</DIV>

</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We estimate that the net proceeds of this offering will be
    approximately $327.6&#160;million after deducting the full
    underwriting discount and other estimated offering expenses. If
    the underwriters&#146; overallotment option is exercised in
    full, our net proceeds will be approximately
    $376.9&#160;million. Concurrently with the completion of this
    offering, we will sell to Messrs.&#160;Bortz and Martz an
    aggregate of 135,000 common shares in the concurrent private
    placement at a price per share equal to the public offering
    price per share in this offering shown on the cover of this
    prospectus, without payment of any underwriting discount,
    yielding $2.7&#160;million of net proceeds to us.
</DIV>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriters will forego the receipt of payment of
    $&#160;&#160;&#160;&#160;&#160; per share, until such time as we
    purchase assets in accordance with our investment strategy as
    described in this prospectus with an aggregate purchase price
    (including the amount of any outstanding indebtedness assumed or
    incurred by us) at least equal to the net proceeds from this
    offering (after deducting the full underwriting discount and
    other estimated offering expenses payable by us), at which time,
    we have agreed to pay the underwriters an amount equal to
    $&#160;&#160;&#160;&#160;&#160; per share sold in this offering.
</DIV>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will contribute the net proceeds of this offering and the
    concurrent private placement to our operating partnership. Our
    operating partnership will invest these net proceeds in hotel
    properties in accordance with our investment strategy described
    in this prospectus and for general business purposes. Prior to
    the full investment of the net proceeds in hotel properties, we
    intend to invest the net proceeds in interest-bearing short-term
    investment grade securities or money-market accounts which are
    consistent with our intention to qualify as a REIT. Such
    investments may include, for example, government and government
    agency certificates, certificates of deposit, interest-bearing
    bank deposits and mortgage loan participations. These initial
    investments are expected to provide a lower net return than we
    will seek to achieve from investments in hotel properties. We
    will use approximately $100,000 of the proceeds of this offering
    to reimburse Mr.&#160;Bortz for out-of-pocket expenses he
    incurred in connection with our formation and this offering and
    $1,000 to repurchase the shares he acquired in connection with
    the formation and initial capitalization of our company.
</DIV>

  <!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    35
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='105'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CAPITALIZATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth:
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="13%"></TD>
    <TD width="5%"></TD>
    <TD width="82%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our actual capitalization as of October&#160;7, 2009;
</TD>
</TR>

</TABLE>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="13%"></TD>
    <TD width="5%"></TD>
    <TD width="82%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our pro forma capitalization, as adjusted to give effect to the
    sale of our common shares in this offering and the concurrent
    private placement, at an offering price of $20.00 per share, not
    including shares subject to the underwriters&#146; overallotment
    option, and, in the case of the common shares sold in this
    offering, net of the underwriting discount and expenses payable
    by us in connection with this offering;&#160;and
</TD>
</TR>

</TABLE>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="13%"></TD>
    <TD width="5%"></TD>
    <TD width="82%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the issuance of 15,000 common shares pursuant to restricted
    share awards to our independent trustees.
</TD>
</TR>

</TABLE>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This table should be read in conjunction with the section
    captioned &#147;Management&#146;s Discussion and Analysis of
    Financial Condition and Results of Operations.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>


<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="74%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="6" align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>As of October&#160;7, 2009</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Pro Forma<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Actual</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>As
    Adjusted<SUP style="font-size: 85%; vertical-align: top">(1)</SUP></B>

</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>(Unaudited)</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Shareholders&#146; equity:
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Preferred shares, $0.01&#160;par value per share,
    100,000,000&#160;shares authorized, no shares issued and
    outstanding
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 20pt">
    Common shares, $0.01&#160;par value, 1,000&#160;shares
    authorized, 1,000&#160;shares issued and outstanding;
    500,000,000&#160;shares authorized, 17,650,000&#160;shares
    issued and outstanding, as
    adjusted<SUP style="font-size: 85%; vertical-align: top">(1)</SUP>

</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    176,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Additional paid-in capital
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    990
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    330,123,500
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total shareholders&#146; equity
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    330,300,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total capitalization
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    330,300,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 12pt; margin-left: 0%; width: 10%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=48 -->


<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    <FONT style="font-size: 8pt">(1)
    </FONT></TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 8pt">The as adjusted amounts include
    15,000 restricted common shares that will be granted to our
    initial independent trustees upon the completion of this
    offering pursuant to our 2009 Equity Incentive Plan. The as
    adjusted amounts do not include (i) up to 2,625,000 common
    shares issuable upon exercise of the underwriters&#146;
    overallotment option at the public offering price less the
    underwriting discount within 30&#160;days after the date of this
    prospectus, (ii)&#160;881,750&#160;common shares issuable upon
    conversion of an aggregate of 881,750&#160;LTIP units to be
    granted to Messrs.&#160;Bortz, Martz and Dittamo upon completion
    of this offering pursuant to our 2009 Equity Incentive Plan,
    (iii)&#160;grants of an aggregate of 48,000&#160;restricted
    common shares to Messrs.&#160;Bortz, Martz and Dittamo pursuant
    to our 2009 Equity Incentive Plan that are expected to be
    approved at the first meeting of our board of trustees following
    completion of this offering as part of our 2010 compensation
    program, or (iv)&#160;377,875 common shares reserved for awards
    under our 2009 Equity Incentive Plan, but not yet granted. Our
    2009 Equity Incentive Plan provides for the issuance of
    aggregate share awards equal to 7.5% of the number of common
    shares issued in this offering (excluding any shares issued
    pursuant to the underwriters&#146; overallotment option) and in
    the concurrent private placement. Based on an offering of
    17,500,000&#160;shares and 135,000&#160;shares sold pursuant to
    the concurrent private placement, 1,322,625 common shares will
    be available for issuance under the 2009 Equity Incentive Plan.
    After the grant of an aggregate of 881,750 LTIP units and an
    aggregate of 63,000 restricted common shares to our trustees and
    officers under the 2009 Equity Incentive Plan, 377,875 common
    shares will remain available for grant under the 2009 Equity
    Incentive Plan. If the size of the offering changes, the
    aggregate number of LTIP units to be granted to
    Messrs.&#160;Bortz, Martz and Dittamo will change so as to equal
    5% of the common shares issued in this offering (excluding any
    shares issued pursuant to the underwriters&#146; overallotment
    option) and in the concurrent private placement, and the
    aggregate number of shares and the remaining number of shares
    reserved for issuance under the 2009 Equity Incentive Plan will
    change accordingly.
    </FONT></TD>
</TR>

</TABLE>

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    36
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<A name='106'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">OUR
    DISTRIBUTION POLICY</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to distribute at least 90% of our taxable income each
    year (subject to certain adjustments as described below) to our
    shareholders in order to qualify as a REIT under the Code. We
    intend to make regular quarterly distributions to our common
    shareholders beginning at such time as our board of trustees
    determines that we have acquired hotels generating sufficient
    cash flow to do so. Until we invest a substantial portion of the
    net proceeds of this offering and the concurrent private
    placement in hotels, we expect our distributions will be
    nominal. We cannot predict the timing of our hotel investments
    or when we will commence paying quarterly distributions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In order to qualify for taxation as a REIT, we intend to make
    annual distributions to our shareholders of an amount at least
    equal to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;90% of our REIT taxable income (determined before the
    deduction for dividends paid and excluding any net capital
    gain); plus
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (ii)&#160;90% of the excess of our after-tax net income, if any,
    from foreclosure property over the tax imposed on such income by
    the Code; less
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (iii)&#160;the sum of certain items of non-cash income.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Generally, we expect to distribute 100% of our REIT taxable
    income so as to avoid the excise tax on undistributed REIT
    taxable income. However, we cannot assure you as to when we will
    begin to generate sufficient cash flow to make distributions to
    our shareholders or our ability to sustain those distributions.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    See the section entitled &#147;Material Federal Income Tax
    Considerations&#148; below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Distributions will be authorized by our board of trustees and
    declared by us based upon a variety of factors, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    actual results of operations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the timing of the investment of the net proceeds of this
    offering;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    any debt service requirements;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    capital expenditure requirements for our properties;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our taxable income;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the annual distribution requirement under the REIT provisions of
    the Code;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our operating expenses;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    other factors that our board of trustees may deem relevant.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To the extent that, in respect of any calendar year, cash
    available for distribution is less than our REIT taxable income,
    we could be required to sell assets or borrow funds to make cash
    distributions or make a portion of the required distribution in
    the form of a taxable share distribution or distribution of debt
    securities. In addition, prior to the time we have fully
    invested the net proceeds of this offering and our concurrent
    private placement we may fund our quarterly distributions out of
    such net proceeds. The use of our net proceeds for distributions
    could be dilutive to our financial results. In addition, funding
    our distributions from our net proceeds may constitute a return
    of capital to our investors, which would have the effect of
    reducing each shareholder&#146;s basis in its common shares.
    Income as computed for purposes of the tax rules described above
    will not necessarily correspond to our income as determined for
    financial reporting purposes.
</DIV>
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    37
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<A name='107'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">OUR
    BUSINESS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    Company</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are an internally managed hotel investment company recently
    organized by our Chairman, President and Chief Executive
    Officer, Mr.&#160;Bortz, to opportunistically acquire and invest
    in hotel properties located primarily in major United States
    cities, with an emphasis on the major coastal markets. As a
    result of construction costs and density, these markets have
    significant barriers to entry and, as shown in historical
    industry data, we believe these markets will experience the most
    robust recovery in meeting and room-night demand as the U.S.
    economy improves. In addition, we may invest in resort
    properties located near our primary urban target markets, as
    well as in select destination markets such as Hawaii, South
    Florida and Southern California. We will seek geographic
    diversity in our investments, although attractive opportunities
    will be more important than geographic mix in our investment
    activity. We intend to focus on full-service hotel properties in
    the &#147;upper upscale&#148; segment of the lodging industry as
    defined by Smith Travel Research. In addition, we may seek to
    acquire branded, upscale, select-service properties in our
    primary urban target markets. We believe that investments in
    these hotel properties can produce attractive risk-adjusted
    returns because we expect (i)&#160;to acquire properties at
    cyclically low prices in the current economic and financing
    environment and (ii)&#160;the properties we purchase will
    benefit from increasing business and leisure travel as the
    economy improves. We currently do not own any hotel properties
    and have no properties under contract. We intend to elect and
    qualify to be taxed as a real estate investment trust, or REIT,
    for federal income tax purposes.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe that the current market environment will present a
    significant number of attractive investment opportunities and
    that our management team will have the experience and expertise
    necessary to acquire a
    <FONT style="white-space: nowrap">high-quality</FONT>
    portfolio of hotel properties. Our management team will be led
    by Mr.&#160;Bortz, the founder and former Chairman of the Board
    of Trustees and Chief Executive Officer of LaSalle Hotel
    Properties, a NYSE-listed hotel REIT. Prior to that, he founded
    and led Jones Lang LaSalle&#146;s Hotel Investment Group.
    Mr.&#160;Bortz has 28&#160;years of lodging and real estate
    experience, having overseen more than $2.5&#160;billion of
    lodging-related transactions.
</DIV>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon completion of this offering and the concurrent private
    placement, we will have approximately $330&#160;million to
    invest in hotel properties and we will have no outstanding
    indebtedness. Accordingly, we believe we will be well-positioned
    to take advantage of attractive investment opportunities that we
    expect will be available in the lodging industry.
</DIV>


<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Market
    Opportunity</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The U.S.&#160;hotel industry has experienced substantial
    declines in fundamentals as a result of the global economic
    recession and its adverse impact on business and leisure travel.
    We believe that the significant number of hotel properties
    experiencing substantial declines in operating cash flow,
    coupled with the challenged credit markets, near-term debt
    maturities and, in some instances, covenant defaults relating to
    outstanding indebtedness, will present attractive investment
    opportunities in the lodging industry. Accordingly, we believe
    the following factors will provide well-capitalized investors,
    such as our company, the opportunity to acquire high-quality
    hotel properties at prices significantly below replacement cost,
    with substantial appreciation potential as the U.S.&#160;economy
    recovers from the current recession:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    <I>Significant Debt Defaults.</I>&#160;&#160;Cash flow at many
    hotel properties has declined or will likely decline to levels
    that are inadequate to support required debt service payments or
    that violate applicable covenants. Real Capital Analytics
    estimates that, as of September&#160;30, 2009, there are over
    1,100 hotel properties in distress (which includes default,
    <FONT style="white-space: nowrap">deed-in-lieu,</FONT>
    forced sales, foreclosure or bankruptcy) having an aggregate
    value of approximately $29&#160;billion. We believe many of
    these hotel properties will be sold by lenders after
    foreclosure, while in receivership or in cooperation with the
    borrower. The following chart shows the increasing delinquency
    rates and amounts of hotel CMBS since November 2008.
</TD>
</TR>

</TABLE>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Hotel
    CMBS Delinquency Rates and Amounts</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="w75877a3w7587702.gif" alt="(BAR GRAPH)">
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Source:&#160;Standard&#160;&#038; Poor&#146;s North American
    CMBS Monthly Snapshot
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    <I>Maturity Defaults and Lack of Available
    Financing.</I>&#160;&#160;According to Standard&#160;&#038;
    Poor&#146;s, hotel-related CMBS with an aggregate principal
    amount of approximately $21&#160;billion are scheduled to mature
    over the next three years, as shown in the chart below. In the
    current recessionary environment, traditional lending sources,
    such as banks, insurance companies and pension funds have
    adopted more conservative lending policies and have materially
    decreased new lending commitments to hotel properties. We
    believe the current and projected cash flows at many hotel
    properties, when coupled with more conservative lending
    policies, will only support mortgage financing that is
    significantly less than the amounts currently borrowed against
    such properties. As a result, we expect many owners of hotel
    properties will be unable to refinance maturing debt without
    significant additional equity investment, which may result in
    sales or foreclosures.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Hotel
    CMBS Fixed-Rate and Floating-Rate Final Maturities</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="w75877a3w7587703.gif" alt="(BAR GRAPH)">
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Source:&#160;Standard&#160;&#038; Poor&#146;s &#147;CMBS Lodging
    Performance Will Reflect Segments And Markets&#148;
</DIV>
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    <BR>
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    <I>Under-Capitalized Owners.</I>&#160;&#160;Maintaining a
    hotel&#146;s physical condition at the levels required by major
    hotel brands often requires significant capital investment. This
    is particularly true for hotels in urban markets and in the
    upper upscale segment of the lodging industry, where we intend
    to focus our investment activity. We believe cash flow after
    debt service at many hotel properties may be insufficient to
    fund necessary capital expenditures and their owners may face
    capital investment demands that could require additional equity
    investments. We believe some hotel owners will be unable or
    unwilling to make the required equity investments and may choose
    or be compelled to sell their hotels.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Transaction
    Landscape</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The aggregate value of sale transactions involving
    U.S.&#160;hotels with a purchase price of $10&#160;million or
    more decreased by approximately 81%, from approximately
    $45&#160;billion in 2007 to approximately $8.5&#160;billion in
    2008, and declined further to approximately $2.0&#160;billion in
    the first nine months of 2009, as shown in the chart below. This
    decrease followed a dramatic increase in transaction volume from
    2004 through 2007, during which period attractive financing was
    widely available and lodging industry fundamentals were
    generally favorable. In 2008, as the capital markets collapsed
    and the economy declined significantly, availability of
    commercial real estate financing generally, and financing for
    hotel properties in particular, decreased dramatically.
    Traditional lending sources, such as banks, insurance companies
    and pension funds adopted more conservative lending policies and
    have materially decreased new lending commitments to hotel
    properties. The hotel CMBS market, once a large contributor to
    the availability of attractive debt financing, effectively
    closed in 2008 and has yet to reopen. Potential buyers of hotels
    have found it increasingly difficult to procure debt financing
    and thus both the number of bids for properties and the value of
    the bids themselves have decreased. As the price buyers are
    willing to pay for hotels has decreased, we believe many hotel
    owners have become reluctant to sell unless forced to do so.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe a number of factors, including significant debt
    defaults, maturity defaults and lack of available financing and
    under-capitalized owners, described above, will increase
    pressure on certain hotel owners to sell properties at prices
    that we believe are attractive and that transaction volumes will
    increase over the next several years. We expect that
    well-capitalized buyers, such as our company, with access to
    equity capital and the ability to use low leverage, will have
    opportunities to acquire high-quality hotel properties at
    historically attractive prices.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">U.S.
    Hotel Transaction Volume (1995&#160;&#151; September&#160;30,
    2009)<BR>
    (Transactions $10&#160;million and
    above)<SUP style="font-size: 85%; vertical-align: top">(1)</SUP></FONT></B>

</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="w75877a3w7587704.gif" alt="(BAR GRAPH)">
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Source:&#160;JLLH (1995&#160;- 2008), Real Capital Analytics
    (2009 YTD)
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 1pt; margin-left: 0%; width: 13%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=60 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    <FONT style="font-size: 8pt">(1)
    </FONT></TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 8pt">2009 YTD amount includes
    transactions of $5&#160;million and above; data for
    $10&#160;million and above not available.
    </FONT></TD>
</TR>

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    <B><FONT style="font-family: 'Times New Roman', Times">Industry
    Overview</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Since August 2008, the U.S.&#160;lodging industry has
    experienced substantial declines in fundamentals as a result of
    the global recession and its adverse impact on business and
    leisure travel. Lodging demand decreased on a year-over-year
    basis in 2008 and year-to-date in 2009, while supply has risen
    as hotel properties that were under development before the
    financial crisis continue to be completed. As a result of
    falling demand, increasing supply and deteriorating average
    rates, RevPAR decreased over the same periods and is expected to
    decrease by 17.4% in 2009 and 2.4% in 2010, according to JLLH.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a result of the financial distress, lack of financing, severe
    recession and declining operating fundamentals over the past two
    years, many previously planned new hotel developments have been
    abandoned and the number of rooms under construction and in
    planning has declined and is expected to decline further over
    the next several years. Accordingly, new room supply growth is
    projected by JLLH to be just 1.0% in 2010, 0.5% in 2011 and 1.2%
    in 2012, significantly below the 2.1% annual average from 1988
    to 2008. We believe this below-average projected supply growth
    is due to scarcity of financing for hotel properties and
    operating fundamentals that do not generate adequate returns on
    the cost of new hotel construction. We believe that declining
    new room supply growth will create an environment favorable for
    future increases in hotel occupancy, ADR and RevPAR.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Industry
    Fundamentals</FONT></I></B>
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The U.S.&#160;hotel industry has experienced 15 consecutive
    months of RevPAR declines since August 2008, principally as a
    result of the declining economic environment, rising
    unemployment and an overall reduction in business and leisure
    travel. According to JLLH forecasts, the projected RevPAR
    decline in 2009 is expected to surpass the aggregate percentage
    declines for the periods following the
    <FONT style="white-space: nowrap">1990-91</FONT>
    recession and the recession surrounding the September&#160;11,
    2001 terrorist attacks, which are considered two of the worst
    periods in the modern history of the U.S.&#160;lodging industry.
    Specifically, JLLH projects RevPAR will decline 17.4% in 2009
    and an additional 2.4% in 2010. JLLH projects RevPAR growth will
    turn positive in 2011 through 2013, growing by 7.3%, 9.9%, and
    9.0%, respectively, similar to the above-average periods of
    RevPAR growth that followed the
    <FONT style="white-space: nowrap">1990-1991</FONT>
    and
    <FONT style="white-space: nowrap">2001-2002</FONT>
    industry downturns.
</DIV>


<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">U.S.
    Hotel Industry&#160;&#151; Annual Historical and Projected<BR>
    Change in RevPAR, Room&#160;Demand and
    Room&#160;Supply</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="w75877a3w7587705.gif" alt="(BAR GRAPH)">
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Source:&#160;Smith Travel Research (1988&#160;- 2008), JLLH
    (2009E&#160;- 2013E)
</DIV>
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    41
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Historically, RevPAR has experienced periods of above-average
    growth following industry downturns. In addition, as shown in
    the charts below, the urban and upper upscale sectors, in which
    we intend to focus our investments, have outperformed the
    broader U.S.&#160;hotel industry in RevPAR growth over the last
    21&#160;years, with average annual RevPAR growth of 4.3% and
    3.4%, respectively, as compared to the overall lodging industry
    average of 3.2%. During the four-year period following the
    <FONT style="white-space: nowrap">1990-1991</FONT>
    recession, the overall hotel industry achieved average annual
    RevPAR growth of 5.2%, while upper upscale and urban hotels each
    experienced average annual RevPAR growth of 7.1%. A similar
    trend followed the
    <FONT style="white-space: nowrap">2001-2002</FONT>
    downturn, when the overall lodging industry experienced average
    annual RevPAR growth of 7.5%, while upper upscale and urban
    sectors achieved average annual RevPAR growth of 7.6% and 10.2%,
    respectively. We believe that the recent lodging industry
    downturn will allow us to acquire hotels at attractive prices
    and that increases in RevPAR for urban and upper upscale hotel
    properties are likely to outperform the broader U.S.&#160;hotel
    industry as the industry recovers, as they have historically.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">U.S.
    Hotels and U.S. Urban Hotels RevPAR Growth Comparison</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="w75877a3w7587706.gif" alt="(BAR GRAPH)">
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Source:&#160;Smith Travel Research
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">U.S.
    Hotels and U.S. Upper Upscale Hotels RevPAR Growth
    Comparison</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="w75877a3w7587707.gif" alt="(BAR GRAPH)"><B> </B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Source:&#160;Smith Travel Research
</DIV>
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    <BR>
    42
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<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Demand
    Overview</FONT></I></B>
</DIV>


<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    According to Smith Travel Research, hotel occupancy in the
    United States was 56.7% year-to-date through October&#160;31,
    2009, the lowest annual level in the last 21&#160;years and well
    below the industry average of 62.7% for that period, as shown in
    the chart below.
</DIV>


<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">U.S.
    Hotel Industry Annual Occupancy Rate</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="w75877a3w7587708.gif" alt="(BAR GRAPH)">
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Source:&#160;Smith Travel Research (1988&#160;- 2008), JLLH
    (2009E&#160;- 2010E)
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Historical growth in hotel room demand, as measured by rooms
    sold, has trended with growth in U.S.&#160;GDP, as shown in the
    chart below. U.S.&#160;GDP is expected to stabilize and grow in
    2010, which we believe will drive growth in hotel room demand,
    as it has historically.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Annual
    Percentage Change in U.S. Hotel Room&#160;Demand Growth vs. U.S.
    GDP Growth</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="w75877a3w7587709.gif" alt="(LINE GRAPH)">
</DIV>

<DIV style="margin-top: 2pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="6%"></TD>
    <TD width="94%"></TD>
</TR>

<TR valign="top" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>    Source:&#160;</TD>
    <TD align="left">
    Smith Travel Research and U.S.&#160;Department of Commerce
    (1988&#160;- 2008), JLLH and International Monetary Fund
    (2009E&#160;- 2010E)
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Supply
    Overview</FONT></I></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe that while the recent decline in lodging fundamentals
    is primarily a result of a significant decline in demand, room
    supply also has been an important factor in lodging cycles.
    Historically, following economic and hotel industry downturns,
    increases in supply of hotel rooms typically lag increases in
    demand for hotel rooms for several years because of the lead
    time necessary to develop and construct new hotels. As
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    shown in the chart below, according to Smith Travel Research,
    average annual growth in supply of hotel rooms for the five-year
    period 1991 through 1995 and for the six-year period 2002
    through 2007 was significantly below the
    <FONT style="white-space: nowrap">21-year</FONT>
    historical average of 2.1%.
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Lodging
    Supply vs. Demand</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="w75877a3w7587710.gif" alt="(LINE GRAPH)">
</DIV>


<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Source:&#160;Smith Travel Research (through October&#160;31,
    2009)
</DIV>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Given the significant declines in RevPAR over the last
    15&#160;months, hotel profit levels have decreased
    significantly. We believe that in most markets today, current
    hotel level profitability is significantly below levels that
    economically justify construction of new hotel rooms,
    particularly as development and construction debt and equity
    financing have become far less available. As a result,
    previously planned hotel developments have been abandoned and
    the number of rooms under construction and in planning has
    declined and is likely to continue to decline over the next
    several years. According to JLLH, new room supply growth is
    projected to be only 1.0% in 2010, 0.5% in 2011 and 1.2% in
    2012. We believe growth in new room supply will likely remain
    significantly below its historical annual average of 2.1%
    through at least 2012 due to the lack of economic feasibility of
    new construction, scarcity of financing and a reduced appetite
    for risk following the current recession.
</DIV>


<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Competitive
    Strengths</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect the following factors will benefit our company as we
    implement our business strategy:
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    <I>Experienced Leadership.</I>&#160;&#160;Our senior executive
    management team will be led by our Chairman, President and Chief
    Executive Officer, Mr.&#160;Bortz, who has a proven track record
    and substantial experience in the hotel industry. Mr.&#160;Bortz
    has 28&#160;years of lodging and real estate experience,
    including expertise in hotel and resort property acquisitions,
    divestitures, repositioning, redevelopment, asset management,
    branding and financing. Our company represents
    Mr.&#160;Bortz&#146;s third lodging investment vehicle and his
    second publicly listed venture. He most recently served as Chief
    Executive Officer of LaSalle Hotel Properties, an internally
    managed, NYSE-listed hotel REIT, from its inception in April
    1998 and as the Chairman of its Board of Trustees from January
    2001 until his retirement in September 2009. Prior to LaSalle
    Hotel Properties, Mr.&#160;Bortz founded and led Jones Lang
    LaSalle&#146;s Hotel Investment Group, which acquired 15 hotels
    over his four-year tenure as its President. Through his past
    professional experiences, Mr.&#160;Bortz has developed
</TD>
</TR>

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    <TD width="13%"></TD>
    <TD width="5%"></TD>
    <TD width="82%"></TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD>
</TD>
    <TD align="left">
    strong relationships with hotel owners, management companies,
    brand companies, brokers, lenders and institutional investors.
    Our Executive Vice President and Chief Financial Officer,
    Mr.&#160;Martz, has over 15&#160;years&#146; experience in the
    hotel and real estate industries, including having served as
    Chief Financial Officer in his last two positions and in senior
    finance positions at two NYSE-listed hotel REITs.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

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    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    <I>Proven Acquirer with Strong Track Record of
    Growth.</I>&#160;&#160;Throughout his career, Mr.&#160;Bortz has
    demonstrated the ability to acquire, redevelop and reposition
    hotel properties. During Mr.&#160;Bortz&#146;s tenure as Chief
    Executive Officer of LaSalle Hotel Properties, he led
    transactions totaling $2.5&#160;billion in asset value. During
    this period, LaSalle Hotel Properties&#146; portfolio increased
    from 10 hotel properties at the time of its initial public
    offering in April 1998 to 31 properties with over 8,400 rooms at
    the time of Mr.&#160;Bortz&#146;s retirement in September 2009.
    In aggregate, Mr.&#160;Bortz oversaw the acquisition of 42 hotel
    and resort properties during his leadership tenure at LaSalle
    Hotel Properties and Jones Lang LaSalle&#146;s Hotel Investment
    Group. Mr.&#160;Bortz also established a strong capital sourcing
    network while at LaSalle Hotel Properties, overseeing that
    company&#146;s raising of more than $3.0&#160;billion of debt
    and equity capital to finance its significant growth over the
    past 11&#160;years. During Mr.&#160;Bortz&#146;s tenure at
    LaSalle Hotel Properties, that company experienced significant
    challenges resulting from severe industry downturns, such as the
    periods following September&#160;11, 2001 and the global
    recession beginning in August 2008, during which LaSalle Hotel
    Properties reduced dividend distributions and capital
    investments due to substantial declines in revenues and earnings.
</TD>
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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    <I>Focused Property Investment Strategy.</I>&#160;&#160;Industry
    analysts project that RevPar growth will turn positive in 2011,
    thereby improving profitability. In accordance with such
    forecasts, we believe that when the U.S. economy begins to
    stabilize and generate positive U.S. GDP growth, transient and
    group travel is likely to rebound, allowing hotel owners to grow
    occupancy as demand growth exceeds diminishing supply growth,
    leading to increasing average daily rates. We intend to invest
    primarily in upper upscale, full-service, branded and
    independent hotels in major U.S.&#160;cities, with an emphasis
    on the major coastal markets, where we believe there are
    significant barriers to entry for new hotel supply and meeting
    and room-night demand will experience the most robust recovery
    as the U.S.&#160;economy improves. In addition, we expect to
    acquire resort properties located near our primary urban target
    markets as well as in select, unique destination markets. We may
    also invest in branded, upscale, select-service hotels in
    premium urban locations in these major cities. Within these
    markets, we intend to establish a diversified customer base by
    investing in urban, resort and convention hotels, each of which
    typically has a different mix of business transient, leisure
    transient and group and convention customers, all of which
    follow different demand trends.
</TD>
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<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    <I>Flexible and Diversified Operating Strategy with No Legacy
    Issues.</I>&#160;&#160;Upon completion of this offering and the
    concurrent private placement we will have no outstanding
    indebtedness and approximately $330&#160;million available for
    investment. While we expect our capital structure to ultimately
    include indebtedness as described in this prospectus, we do not
    intend to use significant leverage until after we have invested
    substantially all of the net proceeds of this offering and the
    concurrent private placement. As a newly formed company with no
    properties or operating history, we will not have the burden and
    distraction of legacy operating or legacy leverage issues that
    have adversely affected many existing hotel companies during the
    recent industry downturn, such as properties suffering from
    significant declines in cash flows or mortgage loan defaults.
    Since we are not affiliated with any hotel management company
    and have no contractual obligations to any particular hotel
    manager, we plan to retain multiple branded and independent
    third-party hotel management companies to operate our hotels,
    based on our assessment of the operator most beneficial for each
    property. We believe this strategy of retaining multiple hotel
    managers will assist us in identifying best practices that we
    will implement across our portfolio, as appropriate. We intend
    to enter into management contracts with third-party hotel
    management companies for the operation of our hotels. We expect
    that, in general, these contracts will have initial terms of
    five to ten years and require us to pay each
</TD>
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    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
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    <TD>&nbsp;</TD>
    <TD>
</TD>
    <TD align="left">
     management company a base management fee, typically in a range
    of 3% to 4% of total hotel revenues, and may provide for
    <FONT style="white-space: nowrap">agreed-upon</FONT>
    performance-based compensation to the management company. We
    expect that performance-based compensation will be negotiated on
    a hotel by hotel basis, but will typically range from 10% to 20%
    of hotel operating income or adjusted hotel operating income,
    with either a fixed negotiated nominal threshold or nominal
    thresholds that vary or increase by year based on third-party
    hotel manager forecasts or
    <FONT style="white-space: nowrap">agreed-upon</FONT>
    projections of hotel performance. Further, we will seek
    management contracts that provide us with the ability to
    (i)&#160;terminate the management contract and replace an
    operator if specified levels of operating performance are not
    satisfied, or at will; (ii)&#160;reposition a hotel if we
    determine to do so; and (iii)&#160;terminate the management
    contract in connection with a sale of the hotel, which we
    believe may facilitate the sale of a hotel. Periodically, we may
    sell a hotel on an opportunistic basis if we believe sales
    proceeds may be invested in hotel properties that offer more
    attractive risk-return profiles. We expect to negotiate the
    termination fees payable to the hotel manager on a hotel by
    hotel basis, but would expect the termination fees to range from
    a relatively nominal fee to up to the sum of three years&#146;
    annual base management fees plus performance-based compensation.
</TD>
</TR>

</TABLE>


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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

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    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    <I>Intensive Asset Management.</I>&#160;&#160;We intend to
    employ a dedicated and experienced asset management team to
    proactively manage our third-party hotel management companies in
    order to improve operational performance and maximize our return
    on investment. Although we will not operate our hotel
    properties, both our asset managers and our executive management
    team will actively participate with our hotel managers in all
    aspects of our hotels&#146; operations, including property
    positioning and repositioning, operations analysis, physical
    design, renovation and capital improvements, guest experience
    and overall strategic direction. Through these initiatives, we
    will seek to improve property efficiencies, lower costs,
    maximize revenues, and enhance property operating margins. We
    also anticipate implementing certain value-added strategies,
    such as changing operators, re-branding and de-flagging, when
    appropriate.
</TD>
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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    <I>Prudent Capital Structure.</I>&#160;&#160;We expect to
    maintain a low-leverage capital structure and intend to limit
    the sum of the outstanding principal amount of our consolidated
    indebtedness and the liquidation preference of any outstanding
    preferred shares to not more than 4.5x our EBITDA for the
    <FONT style="white-space: nowrap">12-month</FONT>
    period preceding the incurrence of such debt or the issuance of
    such preferred shares. Our board of trustees may modify or
    eliminate this limitation at any time without the approval of
    our shareholders.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Business
    Strategy and Investment Criteria</FONT></B>
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to invest in hotel properties located primarily in
    major U.S.&#160;cities, such as Boston, New York,
    Washington,&#160;D.C., Chicago, Los Angeles, and San Francisco,
    with an emphasis on the major coastal markets. We believe these
    markets have significant barriers to entry and will experience
    the most robust recovery in meeting and room-night demand as the
    U.S. economy improves. In addition, we may invest in resort
    properties located near our primary urban target markets, as
    well as in select destination markets such as Hawaii, south
    Florida and southern California. We intend to focus on both
    branded and independent full-service hotels in the &#147;upper
    upscale&#148; segment of the lodging industry as defined by
    Smith Travel Research, based on average daily rates. In
    addition, we may seek to acquire branded, upscale,
    select-service hotels in our primary urban target markets. Smith
    Travel Research categorizes the hotel industry into six market
    classes, ranging from luxury to economy, based on average daily
    rate. In general, luxury hotels comprise the top 15% of average
    daily rates in a metropolitan market and upscale hotels comprise
    the next 15% of average daily rates, with upper upscale hotels
    comprising the top end of the upscale category. Examples of
    upper upscale brands include,
    Hilton<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>,

    Hyatt<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>

    and
    Westin<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>;

    examples of upscale brands include Hyatt
    Place<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>

    and Hilton Garden
    Inn<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>.

    The full-service hotels on which we intend to focus our
    investment activity generally will have restaurant, lounge and
    meeting facilities and other amenities, as well as high service
    levels. The select-service hotels in which we may invest
    generally will not have comprehensive business meeting or
    banquet facilities and will have limited food and beverage
    outlets. We believe our target markets, including the coastal
    cities and resort markets, are characterized by significant
    barriers to entry and that long-term room-night demand
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    and rate growth of these types of hotels will likely continue to
    outperform the national average, as they have historically.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will utilize extensive research to evaluate any target market
    and property, including a detailed review of the long-term
    economic outlook, trends in local demand generators, competitive
    environment, property systems and physical condition, and
    property financial performance. Specific acquisition criteria
    may include, but are not limited to, the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

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    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    premier locations, facilities and other competitive advantages
    not easily replicated;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    significant barriers to entry in the market, such as scarcity of
    development sites, regulatory hurdles, high per room development
    costs and long lead times for new development;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    acquisition price at a significant discount to replacement cost;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    properties not subject to long-term management contracts with
    hotel management companies;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    potential return on investment initiatives, including
    redevelopment, rebranding, redesign, expansion and change of
    management;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    opportunities to implement value-added operational
    improvements;&#160;and
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    strong demand growth characteristics supported by favorable
    demographic indicators.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although the upper upscale segment of the lodging industry has
    been more severely impacted in the recent recession, than in
    previous downturns, we believe that as the U.S.&#160;economy
    begins to stabilize and generate positive GDP growth, upper
    upscale full-service hotels and resorts and upscale
    select-service hotels located in major U.S.&#160;urban,
    convention and drive-to and destination resort markets are
    likely to generate the most favorable returns on investment in
    the lodging industry as historically RevPAR performance at these
    hotels has outperformed the broader U.S.&#160;hotel industry
    during periods of recovery. Hotel developers&#146; inability to
    source construction financing over the past 18 to
    24&#160;months, and likely for the foreseeable future, creates
    an environment in which minimal new lodging supply is expected
    to be added through at least 2012. We believe that as transient
    and group travel rebounds, existing supply will accommodate
    incremental room-night demand allowing hotel owners to grow
    occupancy and ultimately increase rates, thereby improving
    profitability. We believe that portfolio diversification will
    allow us to capitalize from growth in various customer segments
    including business transient, leisure transient, and group and
    convention room-night demand.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We generally intend to enter into flexible management contracts
    with third-party hotel management companies for the operation of
    our hotels that will provide us with the ability to replace
    operators
    <FONT style="white-space: nowrap">and/or</FONT>
    reposition properties, to the extent that we determine to do so,
    and will align our operators with our objective of generating
    the highest return on investment. In addition, we believe that
    flexible management contracts facilitate the sale of hotels, and
    we may seek to opportunistically sell hotels if we believe sales
    proceeds may be invested in hotel properties that offer more
    attractive risk-adjusted returns.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Initially, we do not intend to engage in significant development
    or redevelopment of hotel properties. However, we do expect to
    engage in partial redevelopment and repositioning of certain
    properties, as we seek to maximize the financial performance of
    the hotels that we acquire. In addition, we may acquire
    properties that require significant capital improvement,
    renovation or refurbishment. Over the long-term, we may acquire
    hotel and resort properties that we believe would benefit from
    significant redevelopment or expansion, including, for example,
    adding rooms, meeting facilities or other amenities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may consider acquiring outstanding debt secured by a hotel or
    resort property from lenders and investors if we believe we can
    foreclose on or acquire ownership of the property in the
    near-term. We do not intend to originate any debt financing or
    purchase any debt where we do not expect to gain ownership of
    the underlying property.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Financing
    Strategies</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    While our declaration of trust does not limit the amount of
    indebtedness we may incur, we expect to maintain a low-leverage
    capital structure and intend to limit the sum of the outstanding
    principal amount of our consolidated indebtedness and the
    liquidation preference of any outstanding preferred shares to
    not more than 4.5x our EBITDA for the
    <FONT style="white-space: nowrap">12-month</FONT>
    period preceding the incurrence of such debt or the issuance of
    such preferred shares. Over time, we intend to finance our
    long-term growth with common and preferred equity issuances and
</DIV>
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    debt financing having staggered maturities. Our debt may include
    mortgage debt secured by our hotel properties and unsecured debt.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We anticipate arranging and utilizing a revolving credit
    facility to fund future acquisitions (following investment of
    the net proceeds of this offering), as well as for property
    redevelopments, return on investment initiatives and working
    capital requirements. We intend to repay amounts outstanding
    under any such credit facility from time to time with periodic
    common and preferred equity issuances, long-term debt financings
    and cash flows from operations. No assurance can be given that
    we will be able to obtain a credit facility.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Generally, we do not expect to incur debt, pursuant to a
    revolving credit facility or otherwise, until we have invested
    substantially all of the net proceeds of this offering and the
    concurrent private placement, other than possibly assuming debt
    in connection with a hotel acquisition. If we assume debt in
    connection with our initial hotel acquisitions, our debt level
    could temporarily exceed the general limitation described above.
    In measuring our debt for purposes of our general debt
    limitation, we will utilize &#147;net&#148; debt, which is the
    principal amount of our consolidated indebtedness and the
    liquidation preference of any outstanding preferred shares less
    the amount of our cash.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    When purchasing hotel properties, we may issue limited
    partnership interests in our operating partnership as full or
    partial consideration to sellers who may desire to take
    advantage of tax deferral on the sale of a hotel or participate
    in the potential appreciation in value of our common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Competition</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect to compete for hotel investment opportunities with
    institutional investors, private equity investors, other REITs
    and numerous local, regional and national owners, including
    franchisors, in each of our target markets. Some of these
    entities may have substantially greater financial resources than
    we do and may be able and willing to accept more risk than we
    can prudently manage. Competition generally may increase the
    bargaining power of property owners seeking to sell and reduce
    the number of suitable investment opportunities offered to us or
    purchased by us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The hotel industry is highly competitive. Hotels we acquire will
    compete with other hotels for guests in our markets. Competitive
    factors include location, convenience, brand affiliation, room
    rates, range of services, facilities and guest amenities or
    accommodations offered and quality of guest service. Competition
    in the markets in which our hotels will operate will include
    competition from existing, newly renovated and newly developed
    hotels in the relevant segments. Competition can adversely
    affect the occupancy, ADR and RevPAR of our hotels, and thus our
    financial results, and may require us to provide additional
    amenities, incur additional costs or make capital improvements
    that we otherwise might not choose to make, which may adversely
    affect our profitability.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Environmental
    Matters</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The hotel properties that we acquire will be subject to various
    federal, state and local environmental laws. Under these laws,
    courts and government agencies have the authority to require us,
    as owner of a contaminated property, to clean up the property,
    even if we did not know of or were not responsible for the
    contamination. These laws also apply to persons who owned a
    property at the time it became contaminated, and therefore it is
    possible we could incur these costs even after we sell some of
    the properties we acquire. In addition to the costs of cleanup,
    environmental contamination can affect the value of a property
    and, therefore, an owner&#146;s ability to borrow using the
    property as collateral or to sell the property. Under the
    environmental laws, courts and government agencies also have the
    authority to require that a person who sent waste to a waste
    disposal facility, such as a landfill or an incinerator, pay for
    the <FONT style="white-space: nowrap">clean-up</FONT>
    of that facility if it becomes contaminated and threatens human
    health or the environment.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Furthermore, various court decisions have established that third
    parties may recover damages for injury caused by property
    contamination. For instance, a person exposed to asbestos while
    staying in a hotel may seek to recover damages if he or she
    suffers injury from the asbestos. Lastly, some of these
    environmental laws restrict the use of a property or place
    conditions on various activities. An example would be laws that
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    require a business using chemicals (such as swimming pool
    chemicals at a hotel property) to manage them carefully and to
    notify local officials that the chemicals are being used.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We could be responsible for any of the costs discussed above.
    The costs to clean up a contaminated property, to defend against
    a claim, or to comply with environmental laws could be material
    and could adversely affect the funds available for distribution
    to our shareholders. We expect to obtain &#147;Phase I
    environmental site assessments,&#148; or ESAs, on each hotel
    property prior to acquiring it. However, these ESAs may not
    reveal all environmental costs that might have a material
    adverse effect on our business, assets, results of operations or
    liquidity and may not identify all potential environmental
    liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a result, we may become subject to material environmental
    liabilities of which we are unaware. We can make no assurances
    that (1)&#160;future laws or regulations will not impose
    material environmental liabilities on us, or (2)&#160;the
    environmental condition of our hotel properties will not be
    affected by the condition of the properties in the vicinity of
    our hotel properties (such as the presence of leaking
    underground storage tanks) or by third parties unrelated to us.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Legal
    Proceedings</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are not involved in any material litigation nor, to our
    knowledge, is any material litigation threatened against us.
</DIV>
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<A name='108'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MANAGEMENT&#146;S
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION<BR>
    AND RESULTS OF OPERATIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Overview</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are an internally managed hotel investment company, recently
    organized to opportunistically acquire and invest in hotel
    properties located primarily in major U.S. cities, with an
    emphasis on the major coastal markets, which we believe present
    significant barriers to entry for new hotel supply and are
    likely to experience the most robust recovery in meeting and
    room-night demand as the U.S. economy improves. As a newly
    formed company with no business activity to date, we have no
    operating history and only nominal assets, consisting only of
    cash contributed in connection with our formation. See
    &#147;Capitalization.&#148; We intend to elect and qualify to be
    taxed as a REIT for federal income tax purposes, commencing with
    our short taxable year ending December&#160;31, 2009.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For us to qualify as a REIT under the Code, we cannot operate
    the hotels we acquire. Therefore, our operating partnership and
    its subsidiaries will lease our hotel properties to our TRS
    lessees, who will in turn engage eligible independent
    contractors to manage our hotels. Each of these lessees will be
    treated as a TRS for federal income tax purposes and will be
    consolidated into our financial statements for accounting
    purposes. However, since both our operating partnership and our
    TRS lessees are controlled by us, our principal source of funds
    on a consolidated basis will be from the operations of our
    hotels. The earnings of our TRS lessees will be subject to
    taxation like other regular C corporations, which will reduce
    our funds from operations and the cash otherwise available for
    distribution to our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Liquidity
    and Capital Resources</FONT></B>
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to limit the sum of the outstanding principal amount
    of our consolidated indebtedness and the liquidation preference
    of any outstanding preferred shares to not more than 4.5x our
    EBITDA for the
    <FONT style="white-space: nowrap">12-month</FONT>
    period preceding the incurrence of such debt or the issuance of
    such preferred shares. Compliance with this limitation will be
    judged at the time debt is incurred, and a subsequent decrease
    in EBITDA will not require us to repay debt. Our board of
    trustees may modify or eliminate this limitation at any time
    without the approval of our shareholders. In addition, if we
    assume or incur debt in connection with our initial hotel
    acquisitions, our debt level could exceed the general limitation
    described above. Upon completion of this offering and the
    concurrent private placement, we expect to have approximately
    $330&#160;million in cash available to fund investments in hotel
    properties. We have no agreement to invest in any hotel
    properties. There can be no assurance that we will make any
    investments in any other properties that meet our investment
    criteria.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect to meet our short-term liquidity requirements
    generally through net cash provided by operations, existing cash
    balances and, if necessary, short-term borrowings under an
    anticipated revolving credit facility. We believe that our net
    cash provided by operations will be adequate to fund operating
    requirements, pay interest on any borrowings and fund dividends
    in accordance with the REIT requirements of the federal income
    tax laws. We expect to meet our long-term liquidity
    requirements, such as hotel property acquisitions through the
    cash we will have available upon completion of this offering and
    the concurrent private placement and borrowings and expect to
    fund other investments in hotel properties and scheduled debt
    maturities through long-term secured and unsecured borrowings
    and the issuance of additional equity or debt securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We also anticipate arranging and utilizing a revolving credit
    facility to fund future acquisitions (following investment of
    the net proceeds of this offering and the concurrent private
    placement), as well as for property redevelopments, return on
    investment initiatives and working capital requirements. We
    intend to repay indebtedness incurred under our credit facility
    from time to time out of cash flow and from the net proceeds of
    issuances of additional equity and debt securities. No
    assurances can be given that we will obtain such credit facility
    or if we do what the amount and terms will be. Our failure to
    obtain such a facility on favorable terms could adversely impact
    our ability to execute our business strategy. In the future, we
    may seek to increase the amount of our credit facility,
    negotiate additional credit facilities or issue corporate debt
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    instruments. Any debt incurred or issued by us may be secured or
    unsecured, long-term or short-term, fixed or variable interest
    rate and may be subject to such other terms as we deem prudent.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Generally, we do not expect to incur debt, pursuant to a
    revolving credit facility or otherwise, until we have invested
    substantially all of the net proceeds of this offering and the
    concurrent private placement, other than possibly assuming debt
    in connection with a hotel acquisition. If we assume debt in
    connection with our initial hotel acquisitions, our debt level
    could temporarily exceed the general limitation described above.
    In measuring our debt for purposes of our general debt
    limitation, we will utilize &#147;net&#148; debt, which is the
    principal amount of our consolidated indebtedness and the
    liquidation preference of any outstanding preferred shares less
    the amount of our cash.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to invest in hotel properties only as suitable
    opportunities arise. In the near-term, we intend to fund future
    investments in properties with the net proceeds of this offering
    and the concurrent private placement. Longer term, we intend to
    finance our investments with the net proceeds from additional
    issuances of common shares, issuances of units of limited
    partnership interest in our operating partnership or other
    securities or borrowings. The success of our acquisition
    strategy may depend, in part, on our ability to access
    additional capital through issuances of equity securities. There
    can be no assurance that we will make any investments in any
    properties that meet our investment criteria.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although we have no formal written agreement with Mr.&#160;Bortz
    to do so, we intend to use approximately $100,000 of the
    proceeds of this offering to reimburse Mr.&#160;Bortz for
    out-of-pocket costs he incurred in connection with our formation
    and this offering, if approved by the independent members of our
    board of trustees following completion of this offering. We
    expect to use approximately $1,300,000 of the net proceeds of
    this offering to pay directly other organizational and offering
    expenses.
</DIV>


<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Quantitative
    and Qualitative Disclosure About Market Risk</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Inflation</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Operators of hotels, in general, possess the ability to adjust
    room rates daily to reflect the effects of inflation. However,
    competitive pressures may limit the ability of our management
    companies to raise room rates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Seasonality</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Depending on a hotel&#146;s location and market, operations for
    the hotel may be seasonal in nature. In general, many hotels
    maintain higher occupancy and average daily rates during the
    second and third calendar quarters. Seasonality experienced by
    our hotels may cause fluctuations in our quarterly operating
    profits. To the extent that our cash flow from operations is
    insufficient during any quarter to fund distributions to our
    equity holders or meet other cash needs, due to temporary or
    seasonal fluctuations in revenue, we expect to use cash on hand
    or borrowings under our anticipated revolving credit facility to
    make distributions.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Critical
    Accounting Policies</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Below is a discussion of the accounting policies that we believe
    will be critical once we commence operations. We consider these
    policies critical because they require estimates about matters
    that are inherently uncertain, involve various assumptions and
    require significant management judgment, and because they are
    important for understanding and evaluating our reported
    financial results. These judgments will affect the reported
    amounts of assets and liabilities and our disclosure of
    contingent assets and liabilities at the dates of the financial
    statements and the reported amounts of revenue and expenses
    during the reporting periods. Applying different estimates or
    assumptions may result in materially different amounts reported
    in our financial statements.
</DIV>
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    <B><I><FONT style="font-family: 'Times New Roman', Times">Hotel
    Properties</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Acquisitions
    and Property Improvements</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon acquisition, we allocate the purchase price based on the
    fair value of the acquired land, building, furniture, fixtures
    and equipment, identifiable intangible assets, other assets and
    assumed liabilities. Identifiable intangible assets typically
    arise from contractual arrangements. We determine the
    acquisition-date fair values of all assets and assumed
    liabilities using methods similar to those used by independent
    appraisers (<I>e.g.</I>, discounted cash flow analysis) and that
    utilize appropriate discount
    <FONT style="white-space: nowrap">and/or</FONT>
    capitalization rates and available market information. Estimates
    of future cash flows are based on a number of factors including
    historical operating results, known and anticipated trends, and
    market and economic conditions. Acquisition costs are expensed
    as incurred.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Hotel renovations
    <FONT style="white-space: nowrap">and/or</FONT>
    replacements of assets that improve or extend the life of the
    asset are capitalized and depreciated over their estimated
    useful lives. Furniture, fixtures and equipment under capital
    leases are carried at the present value of the minimum lease
    payments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Repair and maintenance costs are charged to expense as incurred.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Depreciation
    and Amortization</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Hotel properties are carried at cost and depreciated using the
    straight-line method over an estimated useful life of 25 to
    40&#160;years for buildings and one to 10&#160;years for
    furniture, fixtures and equipment. Intangible assets arising
    from contractual arrangements are typically amortized over the
    life of the contract.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are required to make subjective assessments as to the useful
    lives and classification of its properties for purposes of
    determining the amount of depreciation expense to reflect each
    year with respect to the assets. These assessments may impact
    our results of operations.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Impairment</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We monitor events and changes in circumstances for indicators
    that the carrying value of the hotel and related assets may be
    impaired. We will prepare an estimate of the undiscounted future
    cash flows, without interest charges, of the specific hotel and
    determine if the investment in such hotel is recoverable based
    on the undiscounted future cash flows. If impairment is
    indicated, an adjustment is made to the carrying value of the
    hotel to reflect the hotel at fair value. These assessments may
    impact the results of our operations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A hotel is considered held for sale when a contract for sale is
    entered into, a substantial, non-refundable deposit has been
    committed by the purchaser, and sale is expected to close.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Revenue
    Recognition</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Revenue consists of amounts derived from hotel operations,
    including the sales of rooms, food and beverage, and other
    ancillary amenities. Revenue is recognized when rooms are
    occupied and services have been rendered. These revenue sources
    are affected by conditions impacting the travel and hospitality
    industry as well as competition from other hotels and businesses
    in similar markets.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Share-Based
    Compensation</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have adopted an equity incentive plan that provides for the
    grant of common share options, share awards, share appreciation
    rights, performance units and other equity-based awards.
    Equity-based compensation is recognized as an expense in the
    financial statements and measured at the fair value of the award
    on the date of grant. The amount of the expense may be subject
    to adjustment in future periods depending on the specific
    characteristics of the equity-based award and the application of
    the accounting guidance.
</DIV>
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Income
    Taxes</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to elect to be taxed as a REIT under the Code and
    intend to operate as such beginning with our taxable year ending
    December&#160;31, 2009. We expect to have little or no taxable
    income prior to electing REIT status. To qualify as a REIT, we
    must meet certain organizational and operational requirements,
    including a requirement to distribute at least 90% of our annual
    REIT taxable income to our shareholders (which is computed
    without regard to the dividends paid deduction or net capital
    gain and which does not necessarily equal net income as
    calculated in accordance with U.S.&#160;GAAP). As a REIT, we
    generally will not be subject to federal income tax to the
    extent we distribute qualifying dividends to our shareholders.
    If we fail to qualify as a REIT in any taxable year, we will be
    subject to federal income tax on our taxable income at regular
    corporate income tax rates and generally will not be permitted
    to qualify for treatment as a REIT for federal income tax
    purposes for the four taxable years following the year during
    which qualification is lost unless the IRS grants us relief
    under certain statutory provisions. Such an event could
    materially adversely affect our net income and net cash
    available for distribution to shareholders. However, we intend
    to organize and operate in such a manner as to qualify for
    treatment as a REIT.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Recently
    Issued Accounting Standards</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In May 2009, the Financial Accounting Standards Board
    (&#147;FASB&#148;) issued an accounting standard that
    establishes general standards of accounting for and disclosure
    of events that occur after the balance sheet date but before
    financial statements are issued or are available to be issued.
    It requires the disclosure of the date through which an entity
    has evaluated subsequent events and the basis for that date. It
    also requires public entities to evaluate subsequent events
    through the date that the financial statements are issued. While
    we are evaluating the effect of this accounting standard, the
    adoption of this standard did not have a material impact on our
    financial statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In June 2009, the FASB issued an accounting standard that
    requires enterprises to perform a more qualitative approach to
    determining whether or not a variable interest entity will need
    to be consolidated. This evaluation will be based on an
    enterprise&#146;s ability to direct and influence the activities
    of a variable interest entity that most significantly impact its
    economic performance. It requires ongoing reassessments of
    whether an enterprise is the primary beneficiary of a variable
    interest entity. This accounting standard is effective for
    fiscal years beginning after November&#160;15, 2009. Early
    adoption is not permitted. While we are evaluating the effect of
    this accounting standard, we currently believe that the adoption
    of this standard will not have a material impact on our
    financial statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In June 2009, the FASB issued an accounting standard that made
    the FASB Accounting Standards Codification (the
    &#147;Codification&#148;) the source of authoritative GAAP
    recognized by the FASB to be applied by nongovernmental
    entities. Rules and interpretive releases of the SEC under
    authority of federal securities laws are also sources of
    authoritative GAAP for SEC registrants. The Codification will
    supersede all then-existing non-SEC accounting and reporting
    standards. All other nongrandfathered non-SEC accounting
    literature not included in the Codification will become
    nonauthoritative. This accounting standard is effective for
    financial statements issued for interim and annual periods
    ending after September&#160;15, 2009. Following the issuance of
    this accounting standard, the FASB will not issue new standards
    in the form of Statements, FASB Staff Positions, or Emerging
    Issues Task Force Abstracts. Instead, it will issue Accounting
    Standards Updates. The Board will not consider Accounting
    Standards Updates as authoritative in their own right.
    Accounting Standards Updates will serve only to update the
    Codification, provide background information about the guidance,
    and provide the bases for conclusions on the change(s) in the
    Codification. While we are evaluating the effect of this
    accounting standard, we currently believe that the adoption of
    this standard will not have a material impact on our financial
    statements.
</DIV>
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    <BR>
    53
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<A name='109'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">OUR
    MANAGEMENT</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Trustees
    and Officers</FONT></B>
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Currently, Mr.&#160;Bortz serves as our sole executive officer
    and trustee. Upon completion of this offering, our management
    team will consist of Messrs. Bortz, Martz and Dittamo, as shown
    below. Following completion of this offering, we intend to hire
    a Chief Investment Officer and professionals with experience in
    hotel acquisitions, hotel property asset management, including a
    Vice President of Asset Management, accounting and finance. Upon
    completion of this offering, our board of trustees will consist
    of seven members. Certain information regarding those persons
    who will serve as our officers and trustees upon completion of
    this offering is set forth below.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>


<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="45%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="50%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Age</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Position</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Jon E. Bortz
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    52
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Chairman, President and Chief Executive Officer
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Raymond D. Martz
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    39
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Executive Vice President and Chief Financial Officer
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Andrew H. Dittamo
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    35
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Vice President and Controller
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cydney C. Donnell
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    49
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Independent Trustee
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ron E. Jackson
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    66
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Independent Trustee
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Martin H. Nesbitt
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    46
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Independent Trustee
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Michael J. Schall
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    52
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Independent Trustee
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Earl E. Webb
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    53
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    Independent Trustee
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Laura H. Wright
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    49
</TD>
<TD>&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="bottom">
    Independent Trustee
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Jon E. Bortz.</I>&#160;&#160;Mr.&#160;Bortz serves as our
    Chairman, President and Chief Executive Officer and as our sole
    trustee. He served as President, Chief Executive Officer and a
    Trustee of LaSalle Hotel Properties from its formation in April
    1998 until his retirement in September 2009. In addition,
    Mr.&#160;Bortz served as Chairman of LaSalle Hotel
    Properties&#146; Board of Trustees from January&#160;1, 2001,
    until his retirement. Under his leadership, LaSalle Hotel
    Properties focused on investing in upscale and luxury
    full-service hotels located in urban, resort, and convention
    markets and grew to 31 upscale and luxury full-service hotels
    and resorts, with over 8,400 guestrooms in 14 markets in
    11&#160;states and the District of Columbia.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior to forming LaSalle Hotel Properties, Mr.&#160;Bortz
    founded the Hotel Investment Group of Jones Lang LaSalle
    Incorporated in January 1994 and as its President oversaw all of
    Jones Lang LaSalle&#146;s hotel investment and development
    activities. From January 1995 to April 1998, as Managing
    Director of Jones Lang LaSalle&#146;s Investment Advisory
    Division, he was also responsible for certain East Coast
    development projects, including the redevelopment of Grand
    Central Terminal in New York City. From January 1990 to 1995, he
    was a Senior Vice President of Jones Lang LaSalle&#146;s
    Investment Division, with responsibility for East Coast
    development projects and workouts, including the redevelopment
    of Union Station in Washington,&#160;D.C. Mr.&#160;Bortz joined
    Jones Lang LaSalle in 1981. He is a former member of the Board
    of Governors and the Executive Committee of the National
    Association of Real Estate Investment Trusts, or NAREIT, and
    serves on the board of trustees of Federal Realty Investment
    Trust and the board of directors of Metropark USA, Inc.
    Mr.&#160;Bortz holds a B.S. in Economics from The Wharton School
    of the University of Pennsylvania and is a Certified Public
    Accountant.
</DIV>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Raymond D. Martz.</I>&#160;&#160;Mr.&#160;Martz will serve as
    our Executive Vice President and Chief Financial Officer
    effective upon closing of this offering. Mr.&#160;Martz most
    recently served as Chief Financial Officer for Phillips
    Edison&#160;&#038; Company, the largest private owner of
    community shopping centers in the U.S., from August 2007 until
    November 2009. Prior to joining Phillips Edison, Mr.&#160;Martz
    served as the Chief Financial Officer, Secretary and Treasurer
    of Eagle Hospitality Properties Trust, Inc., a NYSE-listed hotel
    REIT, from May 2005 until August 2007. Prior to that,
    Mr.&#160;Martz was employed by LaSalle Hotel Properties in a
    variety of finance functions from 1997 to 2005, including
    serving as its Treasurer from 2004 to 2005, Vice President of
    Finance from 2001 to 2004 and Director of Finance from 1998 to
    2001. Prior to joining LaSalle Hotel Properties, Mr.&#160;Martz
    was an associate with Tishman Hotel Corporation from 1995
    through 1997, focusing on
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    a variety of areas including asset management and development.
    From 1994 to 1995, he served in several hotel operations roles
    at Orient Hotel Group, a private owner and operator of hotels.
    Mr.&#160;Martz received his B.S. from the School of Hotel
    Administration at Cornell University in 1993 and a M.B.A. from
    Columbia University in 2002.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Andrew H. Dittamo</I>.&#160;&#160;Mr.&#160;Dittamo will serve
    as our Vice President and Controller effective upon closing of
    this offering. Most recently, Mr.&#160;Dittamo served as Vice
    President and Assistant Controller for Interstate
    Hotels&#160;&#038; Resorts, Inc., a NYSE listed hotel company,
    where he managed its corporate accounting, construction
    accounting, joint venture and financial reporting departments
    from July 2007 until November 2009. Prior to that he served as
    Assistant Controller of LaSalle Hotel Properties, where he
    managed its corporate accounting office from April 2005 until
    July 2007. From July 1998 until April 2005, he held advancing
    positions to Manager at Grant Thornton, LLP, providing assurance
    services and business advisory support for clients across a
    range of industries. Mr.&#160;Dittamo received a Bachelor of
    Business Administration from James Madison University and is a
    member of the American Institute of Certified Public Accountants.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to hire a Chief Investment Officer following
    completion of this offering. Thereafter, we intend to hire
    additional experienced professionals as required by our
    operations, such as asset managers, analysts, accountants and
    administrative staff.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Cydney C. Donnell.</I>&#160;&#160;Ms.&#160;Donnell will serve
    on our board of trustees effective upon closing of this
    offering. She has been an Executive Professor at the Mays
    Business School of Texas A&#038;M University since August 2004,
    where she currently serves as Director of Real Estate Programs.
    Ms.&#160;Donnell joined the Mays School in January of 2004.
    Ms.&#160;Donnell was formerly a principal and Managing Director
    of European Investors/E.I.I. Realty Securities, Inc., or EII.
    Ms.&#160;Donnell served in various capacities at EII and was
    Chair of the Investment Committee from 2002 to 2003, the Head of
    the Real Estate Securities Group and Portfolio Manager from 1992
    to 2002 and Vice President and Analyst from 1986 to 1992. Prior
    to joining EII, she was a real estate lending officer at
    RepublicBanc Corporation in San&#160;Antonio from 1982 to 1986.
    She currently serves as a member of the Executive Committee and
    Nominating and Corporate Governance Committee of American Campus
    Communities, a publicly traded, student-housing REIT, as a
    member of the Valuation, Nominating and Compensation, and Audit
    Committee of Madison Harbor Balanced Strategies, Inc., a real
    estate fund of funds registered under the Investment Company Act
    of 1940, and as the Vice Chair of the Board of Trustees of the
    Employee Retirement System of Texas. Ms.&#160;Donnell has served
    on the Board and Institutional Advisory Committee of NAREIT.
    Ms.&#160;Donnell received a B.B.A. from Texas A&#038;M
    University and an M.B.A. from Southern Methodist University.
</DIV>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Ron E. Jackson.</I>&#160;&#160;Mr.&#160;Jackson will serve on
    our board of trustees effective upon closing of this offering.
    Mr.&#160;Jackson is the President and Chief Executive Officer of
    Meadowbrook Golf, a multi-faceted golf company with divisions in
    golf turf equipment, golf maintenance and golf operations. Prior
    to joining Meadowbrook Golf in January 2001, Mr.&#160;Jackson
    was the President and Chief Operating Officer of Resort
    Condominiums International, or RCI, a Cendant Company with 2,600
    resorts in 109 countries. Prior to RCI, Mr.&#160;Jackson was the
    Chief Operating Officer of Chartwell Leisure, a hotel
    owner/operator and developer. Prior to Chartwell Leisure,
    Mr.&#160;Jackson was the founder, President and Chief Executive
    Officer of Sunbelt Hotels and Sunbelt Management Company, which
    was the largest franchisee of Hilton Hotels in the United
    States. Mr.&#160;Jackson received a B.S. in Finance and
    Marketing from Brigham Young University and an M.B.A. from the
    University of Utah.
</DIV>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Martin H. Nesbitt.</I>&#160;&#160;Mr.&#160;Nesbitt will serve
    on our board of trustees effective upon closing of this
    offering. Mr.&#160;Nesbitt is the founder, President and Chief
    Executive Officer of PRG Parking Management (d/b/a The Parking
    Spot), an owner and operator of off-airport parking facilities.
    Prior to founding The Parking Spot in 1998, Mr.&#160;Nesbitt was
    a Vice President of the Pritzker Realty Group, L.P., or
    Pritzker, where he was responsible for procuring new real estate
    investment opportunities and managing retail investments and
    developments. Prior to Pritzker, from 1989 to 1996,
    Mr.&#160;Nesbitt was an equity partner and Investment Manager at
    LaSalle Partners, or LaSalle, with a variety of
    responsibilities, including investment management for retail
    properties, management and leasing for office projects and
    acquisition, financing and management of parking assets. While
    at LaSalle, he also managed several specialty
    fund&#160;portfolios of non-traditional real estate
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
     investments. Prior to joining LaSalle, Mr.&#160;Nesbitt was
    employed by General Motors Corporation in the area of borrowing
    and financial planning. Mr.&#160;Nesbitt holds a B.S. from
    Albion College and an M.B.A. from the University of Chicago.
</DIV>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Michael J. Schall.</I>&#160;&#160;Mr.&#160;Schall will serve
    on our board of trustees effective upon closing of this
    offering. He is a Senior Executive Vice President and the Chief
    Operating Officer of Essex Property Trust, Inc., or Essex, a
    publicly traded real estate investment trust, where he is
    responsible for the strategic planning and management of
    Essex&#146;s property operations, redevelopment and
    co-investment programs. From 1993 to 2005, Mr.&#160;Schall was
    Essex&#146;s Chief Financial Officer, responsible for the
    organization&#146;s financial and administrative matters. He
    joined The Marcus&#160;&#038; Millichap Company in 1986. He was
    also the Chief Financial Officer of Essex&#146;s predecessor,
    Essex Property Corporation. From 1982 to 1986, Mr.&#160;Schall
    was Director of Finance for Churchill International, a
    technology-oriented venture capital company. From 1979 to 1982,
    Mr.&#160;Schall was employed in the audit department of
    Ernst&#160;&#038; Young (then known as Ernst&#160;&#038;
    Whinney), where he specialized in the real estate and financial
    services industries. Mr.&#160;Schall received a B.S. from the
    University of San&#160;Francisco. Mr.&#160;Schall is a Certified
    Public Accountant (inactive) and is a member of NAREIT, the
    National Multi Housing Council and the American Institute of
    Certified Public Accountants.
</DIV>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Earl E. Webb.</I>&#160;&#160;Mr.&#160;Webb will serve on our
    board of trustees effective upon closing of this offering.
    Mr.&#160;Webb is President of U.S.&#160;Operations for Avison
    Young, LLC, or Avison, a Canada-based commercial real estate
    company. Prior to joining Avison, from January 2003 to August
    2009, Mr.&#160;Webb was the Chief Executive Officer of Jones
    Lang LaSalle&#146;s Capital Markets Group in the Americas, where
    he was responsible for strategic direction and management of all
    capital markets activities throughout the region. From February
    1999 to December 2002, Mr.&#160;Webb served as Chief Executive
    Officer of Jones Lang LaSalle Americas, Inc., directing all of
    the firm&#146;s Corporate Solutions, Investors Services and
    Capital Markets businesses throughout the Americas, and from
    1985 to February 1999, he held other various positions with that
    company. From 1981 to 1985, Mr.&#160;Webb served as Second Vice
    President in the Capital Markets Group at Continental Illinois
    National Bank. Mr.&#160;Webb holds a B.S. from the University of
    Virginia and an M.B.A. from the J.L. Kellogg Graduate School of
    Management at Northwestern University. He is a Registered
    Securities Principal series&#160;7, 24 and 63, is an Associate
    Member of the Urban Land Institute and is a member of the
    International Council of Shopping Centers, the Real Estate
    Investment Advisory Council and the Real Estate Roundtable.
</DIV>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Laura H. Wright.</I>&#160;&#160;Ms.&#160;Wright will serve on
    our board of trustees effective upon closing of this offering.
    Ms.&#160;Wright is Senior Vice President Finance and Chief
    Financial Officer of Southwest Airlines Co., or Southwest. From
    1998 to July 2004, Ms.&#160;Wright served as Southwest&#146;s
    Vice President Finance and Treasurer. From 1988 to 1998,
    Ms.&#160;Wright served as Assistant Treasurer, Director
    Corporate Finance and Director Corporate Tax of Southwest. Prior
    to joining Southwest, Ms.&#160;Wright was a Tax Manager with
    Arthur Young&#160;&#038; Company. Ms.&#160;Wright received a
    B.S.A. and an M.S.A. from the University of North Texas.
    Ms.&#160;Wright is a Certified Public Accountant and is a member
    of the Texas Society of Certified Public Accountants, the
    Financial Executives Institute and the North Texas CFO Forum.
</DIV>


<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Board
    Committees</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon completion of this offering, our board of trustees will
    appoint an Audit Committee, Compensation Committee and a
    Nominating and Corporate Governance Committee, and will adopt
    charters for each of these committees. Under these charters, the
    composition of each committee will be required to comply with
    the listing standards and other rules and regulations of the
    NYSE as amended or modified from time to time. Initially, each
    of these committees will have four trustees and will be composed
    exclusively of independent trustees, as defined by the listing
    standards of the NYSE then in effect.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Audit
    Committee</FONT></I></B>
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of trustees will establish an Audit Committee, which
    will consist of Ms. Wright (Chairman), Mr. Schall, Mr. Nesbitt
    and Ms. Donnell. The Audit Committee will make recommendations
    concerning the engagement of independent public accountants,
    review with the independent public accountants the plans and
    results of the audit engagement, approve professional services
    provided by the independent
</DIV>
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    <BR>
    56
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
     public accountants, review the independence of the independent
    public accountants, consider the range of audit and non-audit
    fees and review the adequacy of our internal accounting
    controls. Ms. Wright, an independent trustee, will chair our
    Audit Committee and will be our audit committee financial expert
    as that term is defined by the Securities and Exchange
    Commission, or the SEC.
</DIV>


<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Compensation
    Committee</FONT></I></B>
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of trustees will establish a Compensation Committee,
    which will consist of Mr. Webb (Chairman), Mr. Jackson, Ms.
    Donnell and Mr. Nesbitt. The Compensation Committee will
    determine compensation for our executive officers, administer
    our 2009 Equity Incentive Plan, produce an annual report on
    executive compensation for inclusion in our annual meeting proxy
    statement and publish an annual committee report for our
    shareholders.
</DIV>


<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Nominating
    and Corporate Governance Committee</FONT></I></B>
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of trustees will establish a Nominating and Corporate
    Governance Committee, which will consist of Mr. Schall
    (Chairman), Ms. Wright, Mr. Webb and Mr. Jackson. The Nominating
    and Corporate Governance Committee will be responsible for
    seeking, considering and recommending to the board qualified
    candidates for election as trustees and recommending a slate of
    nominees for election as trustees at the annual meeting. It also
    will periodically prepare and submit to the board for adoption
    the committee&#146;s selection criteria for trustee nominees. It
    will review and make recommendations on matters involving
    general operation of the board and our corporate governance, and
    it annually recommends to the board nominees for each committee
    of the board. In addition, the committee will annually
    facilitate the assessment of the board of trustees&#146;
    performance as a whole and of the committees and individual
    trustees and reports thereon to the board.
</DIV>


<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Code of
    Ethics</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have adopted a corporate code of ethics relating to the
    conduct of our business by our employees, officers and trustees.
    We intend to maintain the highest standards of ethical business
    practices and compliance with all laws and regulations
    applicable to our business, including those relating to doing
    business outside the U.S.&#160;Specifically, our code of ethics
    prohibits payments, directly or indirectly, to any foreign
    official seeking to influence such official or otherwise obtain
    an improper advantage for our business.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Compensation
    Committee Interlocks and Insider Participation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    There are no Compensation Committee interlocks and none of our
    employees participates on the Compensation Committee.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Trustee
    Compensation</FONT></B>
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each of our independent trustees who does not serve as the
    chairman of one of our committees will be paid a trustee&#146;s
    fee of $50,000 per year. The trustee who serves as our
    Compensation Committee chairman will be paid an additional fee
    of $5,000. The trustee who serves as our Audit Committee
    chairman will be paid an additional fee of $10,000.
    Trustees&#146; fees will be paid one-half in cash and one-half
    in our common shares, although each trustee may elect to receive
    up to all of his or her trustee fees in the form of our common
    shares. Trustees who are employees will receive no additional
    compensation as trustees. In addition, we will reimburse all
    trustees for reasonable
    <FONT style="white-space: nowrap">out-of-pocket</FONT>
    expenses incurred in connection with their services on the board
    of trustees.
</DIV>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each of our trustees who is not an employee will receive an
    initial grant of 2,500 restricted common shares concurrent with
    completion of this offering.
</DIV>

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    <BR>
    57
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Compensation
    Discussion and Analysis</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect to pay base salaries and annual bonuses and make
    grants of awards under our 2009 Equity Incentive Plan to certain
    of our officers, effective upon completion of this offering. The
    initial awards under our 2009 Equity Incentive Plan will be
    granted to provide performance and retention incentives to these
    individuals and to recognize such individuals&#146; efforts on
    our behalf in connection with our formation and this offering.
    Our board of trustees and our Compensation Committee have not
    yet adopted compensation policies with respect to, among other
    things, setting base salaries, awarding bonuses or making future
    grants of equity awards to our executive officers. We anticipate
    that such determinations will be made by our Compensation
    Committee based on factors such as the desire to retain such
    officer&#146;s services over the long-term, aligning such
    officer&#146;s interest with those of our shareholders,
    incentivizing such officer over the near-, medium- and
    long-term, and rewarding such officer for exceptional
    performance. In addition, our Compensation Committee may
    determine to make awards to new executive officers to help
    attract them to our company.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Executive
    Compensation</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Set forth below are the initial annual cash compensation and
    equity awards to be granted to our Chairman, President and Chief
    Executive Officer and our Executive Vice President and Chief
    Financial Officer commencing upon completion of this offering:
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Summary
    Compensation Table</FONT></B>
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>


<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 8pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 01 -->
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    <TD width="5%" align="right">&nbsp;</TD>	<!-- colindex=10 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=10 type=hang1 -->
</TR>
<!-- Table Width Row END -->
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<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
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&nbsp;
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&nbsp;
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&nbsp;
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<TD>
&nbsp;
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<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
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&nbsp;
</TD>
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&nbsp;
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<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
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&nbsp;
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<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Change in<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
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<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
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&nbsp;
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<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
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&nbsp;
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&nbsp;
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<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Pension<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
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</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
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&nbsp;
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&nbsp;
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&nbsp;
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&nbsp;
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&nbsp;
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<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Value and<BR>
    </B>
</TD>
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&nbsp;
</TD>
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&nbsp;
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<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
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&nbsp;
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&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Non-Equity<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Nonqualified<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Incentive<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Deferred<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
    <B>Name and<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Base<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Share<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Option<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Plan<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Compensation<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>All Other<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 7pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Principal Position</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Year</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Salary<SUP style="font-size: 85%; vertical-align: top">(1)</SUP></B>

</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Bonus</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Awards</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Awards</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Compensation</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Earnings</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Compensation</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Total</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    Jon E. Bortz,<BR>
    Chairman, President and Chief Executive Officer
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    2010
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    $
</TD>
<TD nowrap align="right" valign="top">
    300,000
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    $
</TD>
<TD nowrap align="right" valign="top">
    300,000
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    $923,035<SUP style="font-size: 85%; vertical-align: top">(2</SUP>

</TD>
<TD nowrap align="left" valign="top">
    <SUP style="font-size: 85%; vertical-align: top">)(3)</SUP>

</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    &#151;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    &#160;&#160;&#160;&#160;&#160;&#151;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    &#151;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    &#151;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    $
</TD>
<TD nowrap align="right" valign="top">
    1,523,035
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -8pt; margin-left: 8pt">
    Raymond D. Martz,<BR>
    Executive Vice President and Chief Financial Officer
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    2010
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    $
</TD>
<TD nowrap align="right" valign="top">
    250,000
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    $
</TD>
<TD nowrap align="right" valign="top">
    200,000
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    $232,260<SUP style="font-size: 85%; vertical-align: top">(2</SUP>

</TD>
<TD nowrap align="left" valign="top">
    <SUP style="font-size: 85%; vertical-align: top">)(3)</SUP>

</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    &#151;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    &#151;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    &#151;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    &#151;
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="top">
    $
</TD>
<TD nowrap align="right" valign="top">
    682,260
</TD>
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>




<DIV style="font-size: 12pt; margin-left: 0%; width: 10%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=48 -->



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 06 -->

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    <FONT style="font-size: 8pt">(1)
    </FONT></TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 8pt">Each executive will receive a pro
    rata portion of his 2010 base salary for the period from the
    completion of this offering through December&#160;31, 2009.
    </FONT></TD>
</TR>

</TABLE>


<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 06 -->

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    <FONT style="font-size: 8pt">(2)
    </FONT></TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 8pt">Reflects restricted share awards of
    30,000&#160;common shares to Mr.&#160;Bortz and
    15,000&#160;common shares to Mr.&#160;Martz pursuant to our 2009
    Equity Incentive Plan that are expected to be approved at the
    first meeting of our board of trustees following the completion
    of this offering as part of our 2010 compensation program. The
    aggregate estimated value of the restricted share awards are
    $600,000 for Mr.&#160;Bortz and $300,000 for Mr.&#160;Martz
    assuming a share price on the date of grant of $20.00, the per
    share public offering price in this offering. In addition, we
    anticipate that a grant of 3,000 restricted common shares will
    be awarded to Mr. Dittamo at the first meeting of our board of
    trustees following completion of this offering. We expect that
    compensation expense for these awards will be recognized ratably
    over the restricted shares&#146; vesting period of three years.
    </FONT></TD>
</TR>

</TABLE>



<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 06 -->

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    <FONT style="font-size: 8pt">(3)
    </FONT></TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 8pt">Amounts also account for the grant
    of LTIP units to Mr.&#160;Bortz and Mr.&#160;Martz under our
    2009 Equity Incentive Plan. Upon completion of this offering,
    Mr.&#160;Bortz will be awarded 723,035&#160;LTIP units and
    Mr.&#160;Martz will be awarded 132,260&#160;LTIP units. In
    addition, 26,455&#160;LTIP units will be awarded to
    Mr.&#160;Dittamo. All LTIP unit awards are expected to have a
    five-year vesting period. For purposes of this table, we
    determined that the value for each LTIP unit is $5.00. The
    compensation reported in the table related to the LTIP grants is
    equal to the number of LTIP units awarded times the assumed
    <FONT style="white-space: nowrap">per-unit</FONT>
    value divided by five. To determine the value of each LTIP unit,
    we considered the inherent uncertainty that the LTIP units will
    reach parity with the other common partnership units,
    appropriateness of discounts for illiquidity, expectations for
    future dividends and various other data available to us as of
    the date of this prospectus.
    </FONT></TD>
</TR>

</TABLE>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 06 -->

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 8pt">We will apply the share-based
    payment accounting guidance contained in U.S.&#160;GAAP to
    calculate the fair value of the LTIP units when preparing our
    financial statements for the period from commencement of
    operations through December&#160;31, 2009, and we will disclose
    the aggregate fair value of these LTIP units in the notes to our
    2009 financial statements. We anticipate that the fair value
    calculation on the date of grant will consider, in part, the
    various factors and conditions described in the paragraph above
    and other data that we deem relevant. However, the calculation
    of the fair value of our LTIP units for the purpose of preparing
    our 2009 financial statements may result in a different amount
    of compensation expense for 2010 than the approximate
    compensation amount calculated for 2010 and disclosed in the
    table above.
    </FONT></TD>
</TR>

</TABLE>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF"><!-- TABLE 06 -->

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
</TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 8pt">If the size of this offering
    changes, the aggregate number of LTIP units to be granted to
    Messrs.&#160;Bortz, Martz and Dittamo will change so as to equal
    5% of the common shares issued in this offering (excluding and
    shares issued pursuant to the underwrites&#146; overallotment
    option) and in the concurrent private placement.
    </FONT></TD>
</TR>

</TABLE>

<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    58
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">IPO
    Grants of Plan-Based Awards</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon completion of this offering, we will cause our operating
    partnership to grant 723,035 LTIP units to Mr.&#160;Bortz,
    132,260 LTIP units to Mr.&#160;Martz and 26,455 LTIP units to
    Mr.&#160;Dittamo. If the size of this offering changes, the
    aggregate number of LTIP units to be granted to
    Messrs.&#160;Bortz, Martz and Mr.&#160;Dittamo will change so as
    to equal 5% of the common shares issued in this offering
    (excluding any shares issued pursuant to the underwriters&#146;
    overallotment option) and in the concurrent private placement.
    These LTIP units will vest ratably on each of the first five
    anniversaries of the date of grant. The LTIP units, whether
    vested or unvested, will receive the same
    <FONT style="white-space: nowrap">per-unit</FONT>
    distributions as common units of our operating partnership,
    which distributions generally will equal per share distributions
    on our common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Additionally, at the first board of trustees meeting following
    completion of this offering, we expect our board of trustees
    will approve awards of 30,000 restricted common shares to
    Mr.&#160;Bortz, 15,000 restricted common shares to
    Mr.&#160;Martz and 3,000 restricted common shares to
    Mr.&#160;Dittamo as part of our 2010 compensation program
    pursuant to our 2009 Equity Incentive Plan. These restricted
    share awards will vest ratably on each of the first three
    anniversaries of the date of grant. Distributions will be paid
    on these restricted shares, whether vested or unvested, when
    declared and paid on our common shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">2009
    Equity Incentive Plan</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of trustees has adopted, and our sole shareholder has
    approved, our 2009 Equity Incentive Plan to attract and retain
    independent trustees, executive officers and other key employees
    and service providers, including officers and employees of our
    affiliates. The 2009 Equity Incentive Plan provides for the
    grant of options to purchase common shares, share awards, share
    appreciation rights, performance units and other equity-based
    awards.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Administration
    of the 2009 Equity Incentive Plan</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The 2009 Equity Incentive Plan will be administered by our
    Compensation Committee and the Compensation Committee will
    approve all terms of awards under the 2009 Equity Incentive
    Plan. Our Compensation Committee will also approve who will
    receive grants under the 2009 Equity Incentive Plan and the
    number of common shares subject to the grant.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Eligibility</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All of our employees and employees of our subsidiaries and
    affiliates, including our operating partnership, are eligible to
    receive grants under the 2009 Equity Incentive Plan. In
    addition, our independent trustees and consultants and advisors
    who perform services for us and our subsidiaries and affiliates
    may receive grants under the 2009 Equity Incentive Plan.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Share
    Authorization</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The number of common shares that may be issued under the 2009
    Equity Incentive Plan will equal 7.5% of the aggregate number of
    our common shares issued in this offering (excluding any shares
    issued pursuant to the underwriters&#146; overallotment option)
    and in the concurrent private placement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with share splits, dividends, recapitalizations
    and certain other events, our board will make adjustments that
    it deems appropriate in the aggregate number of common shares
    that may be issued under the 2009 Equity Incentive Plan and the
    terms of outstanding awards.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If any options or share appreciation rights terminate, expire or
    are canceled, forfeited, exchanged or surrendered without having
    been exercised or paid or if any share awards, performance units
    or other equity-based awards are forfeited, the common shares
    subject to such awards will again be available for purposes of
    the 2009 Equity Incentive Plan.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    No awards under the 2009 Equity Incentive Plan were outstanding
    prior to completion of this offering. The initial grants
    described above will become effective upon completion of this
    offering.
</DIV>
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    <BR>
    59
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Options</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The 2009 Equity Incentive Plan authorizes our Compensation
    Committee to grant incentive share options (under
    Section&#160;421 of the Code) and options that do not qualify as
    incentive share options. The exercise price of each option will
    be determined by the Compensation Committee, provided that the
    price cannot be less than 100% of the fair market value of the
    common shares on the date on which the option is granted (or
    110% of the shares&#146; fair market value on the grant date in
    the case of an incentive share option to an individual who is a
    &#147;ten percent shareholder&#148; under Sections&#160;422 and
    424 of the Code). The exercise price for any option is generally
    payable (i)&#160;in cash, (ii)&#160;by certified check,
    (iii)&#160;by the surrender of common shares (or attestation of
    ownership of common shares) with an aggregate fair market value
    on the date on which the option is exercised, of the exercise
    price, or (iv)&#160;by payment through a broker in accordance
    with procedures established by the Federal Reserve Board. The
    term of an option cannot exceed ten years from the date of grant
    (or five years in the case of an incentive share option granted
    to a &#147;ten percent shareholder&#148;).
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Share
    Awards</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The 2009 Equity Incentive Plan also provides for the grant of
    share awards. A share award is an award of common shares that
    may be subject to restrictions on transferability and other
    restrictions as our Compensation Committee determines in its
    sole discretion on the date of grant. The restrictions, if any,
    may lapse over a specified period of time or through the
    satisfaction of conditions, in installments or otherwise, as our
    Compensation Committee may determine. A participant who receives
    a share award will have all of the rights of a shareholder as to
    those shares, including, without limitation, the right to vote
    and the right to receive dividends or distributions on the
    shares. During the period, if any, when share awards are
    non-transferable or forfeitable, (i)&#160;a participant is
    prohibited from selling, transferring, pledging, exchanging,
    hypothecating or otherwise disposing of his or her share award
    shares, (ii)&#160;the company will retain custody of the
    certificates and (iii)&#160;a participant must deliver a share
    power to the company for each share award.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon completion of this offering, we will issue an aggregate of
    15,000 restricted common shares to non-management persons who
    will become trustees upon completion of this offering. In
    addition, restricted share awards of 30,000&#160;shares to
    Mr.&#160;Bortz, 15,000&#160;shares to Mr.&#160;Martz and
    3,000&#160;shares to Mr.&#160;Dittamo are expected to be
    approved at the first meeting of our board of trustees following
    completion of this offering as part of our 2010 compensation
    program. These grants of restricted common shares to trustees
    and officers will vest ratably over the first three
    anniversaries of the date of the grant.
</DIV>


<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Share
    Appreciation Rights</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The 2009 Equity Incentive Plan authorizes our Compensation
    Committee to grant share appreciation rights that provide the
    recipient with the right to receive, upon exercise of the share
    appreciation right, cash, common shares or a combination of the
    two. The amount that the recipient will receive upon exercise of
    the share appreciation right generally will equal the excess of
    the fair market value of the common shares on the date of
    exercise over the shares&#146; fair market value on the date of
    grant. Share appreciation rights will become exercisable in
    accordance with terms determined by our Compensation Committee.
    Share appreciation rights may be granted in tandem with an
    option grant or independently from an option grant. The term of
    a share appreciation right cannot exceed ten years from the date
    of grant or five years in the case of a share appreciation right
    granted in tandem with an incentive share option awarded to a
    &#147;ten percent shareholder&#148;.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Performance
    Units</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The 2009 Equity Incentive Plan also authorizes our Compensation
    Committee to grant performance units. Performance units
    represent the participant&#146;s right to receive an amount,
    based on the value of the common shares, if performance goals
    established by the Compensation Committee are met. Our
    Compensation Committee will determine the applicable performance
    period, the performance goals and such other conditions that
    apply to the performance unit. Performance goals may relate to
    our financial performance or the financial performance of our
    operating partnership, the participant&#146;s performance or
    such other criteria determined by
</DIV>
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    <BR>
    60
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    the Compensation Committee. If the performance goals are met,
    performance units will be paid in cash, our common shares or a
    combination thereof.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Other
    Equity-Based Awards</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our Compensation Committee may grant other types of share-based
    awards as equity-based awards under the 2009 Equity Incentive
    Plan, including LTIP units. Other equity-based awards are
    payable in cash, our common shares or other equity, or a
    combination thereof, determined by the Compensation Committee.
    The terms and conditions of other equity-based awards are
    determined by the Compensation Committee.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    LTIP units are a special class of partnership interests in our
    operating partnership. Each LTIP unit awarded will be deemed
    equivalent to an award of one common share under the 2009 Equity
    Incentive Plan, reducing availability for other equity awards on
    a
    <FONT style="white-space: nowrap">one-for-one</FONT>
    basis. We will not receive a tax deduction for the value of any
    LTIP units granted to our employees. The vesting period for any
    LTIP units, if any, will be determined at the time of issuance.
    LTIP units, whether vested or not, or whether the LTIP units
    have reached full parity with the operating partnership units or
    not, will receive the same per-unit profit distributions as
    units of our operating partnership, which profit distribution
    will generally equal per&#160;share distributions on our common
    shares. This treatment with respect to distributions is similar
    to the expected treatment of our restricted share awards, which
    will generally receive full distributions whether vested or not.
    Initially, LTIP units will not have full parity with operating
    partnership units with respect to liquidating distributions.
    Under the terms of the LTIP units, our operating partnership
    will revalue its assets upon the occurrence of certain specified
    events, and any increase in valuation from the time of grant
    until such event will be allocated first to the holders of LTIP
    units to equalize the capital accounts of such holders with the
    capital accounts of operating partnership unit holders. Upon
    equalization of the capital accounts of the holders of LTIP
    units with the other holders of operating partnership units, the
    LTIP units will achieve full parity with operating partnership
    units for all purposes, including with respect to liquidating
    distributions. If such parity is reached, vested LTIP units may
    be converted into an equal number of operating partnership units
    at any time, and thereafter enjoy all the rights of operating
    partnership units, including exchange rights which includes the
    right to redeem the operating partnership units for common
    shares or cash, at our option. However, there are circumstances
    under which such parity would not be reached. Until and unless
    such parity is reached, the value that an officer will realize
    for a given number of vested LTIP units will be less than the
    value of an equal number of our common shares.
</DIV>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon completion of this offering, we will cause our operating
    partnership to grant an aggregate of 881,750 LTIP units to
    Messrs.&#160;Bortz, Martz and Dittamo. If the size of this
    offering changes, the aggregate number of LTIP units to be
    granted to Messrs.&#160;Bortz, Martz and Dittamo will change so
    as to equal 5% of the common shares issued in this offering
    (excluding any shares issued pursuant to the underwriters&#146;
    overallotment option) and in the concurrent private placement.
    These LTIP units will vest ratably on each of the first five
    anniversaries of the date of grant. See &#147;Our Operating
    Partnership and the Partnership Agreement&#148; for a further
    description of the rights of limited partners in our operating
    partnership.
</DIV>


<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Dividend
    Equivalents</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our Compensation Committee may grant dividend equivalents in
    connection with the grant of options, share appreciation rights
    and performance units. Dividend equivalents may be paid
    currently or accrued as contingent cash obligations (in which
    case they will be deemed to have been invested in common shares)
    and may be payable in cash, common shares or a combination of
    the two. Our Compensation Committee will determine the terms of
    any dividend equivalents.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Change
    in Control</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we experience a change in control, the Compensation Committee
    may, at its discretion, provide that all outstanding options,
    share appreciation rights, share awards, performance units, or
    other equity based awards that are not exercised prior to the
    change in control will be assumed by the surviving entity, or
    will be replaced by a comparable substitute award of
    substantially equal value granted by the surviving entity. The
    Compensation Committee may also provide that (i)&#160;all
    outstanding options and share appreciation rights will
</DIV>
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    61
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    be fully exercisable on the change in control,
    (ii)&#160;restrictions and conditions on outstanding share
    awards will lapse upon the change in control and
    (iii)&#160;performance units or equity-based awards will become
    earned in their entirety. The Compensation Committee may also
    provide that participants must surrender their outstanding
    options and share appreciation rights, share awards, performance
    units, and other equity based awards in exchange for a payment,
    in cash or our common shares or other securities or
    consideration received by shareholders in the change in control
    transaction, equal to the value received by shareholders in the
    change in control transaction (or, in the case of options and
    share appreciation rights, the amount by which that transaction
    value exceeds the exercise price).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In summary, a change of control under the 2009 Equity Incentive
    Plan occurs if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    a person, entity or affiliated group (with certain exceptions)
    acquires, in a transaction or series of transactions, at least
    50% of our combined voting power or common shares;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    we merge into another entity unless the holders of our voting
    shares immediately prior to the merger have more than 50% of the
    combined voting power of the securities in the merged entity or
    its parent;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    we sell or dispose of all or substantially all of our assets; or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    during any period of two consecutive years individuals who, at
    the beginning of such period, constitute our board of trustees
    together with any new trustees (other than individuals who
    become trustees in connection with certain transactions or
    election contests) cease for any reason to constitute a majority
    of our board of trustees.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Amendment;
    Termination</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of trustees may amend or terminate the 2009 Equity
    Incentive Plan at any time; provided that no amendment may
    adversely impair the benefits of participants with outstanding
    awards. Our shareholders must approve any amendment if such
    approval is required under applicable law or stock exchange
    requirements. Our shareholders also must approve any amendment
    that materially increases the benefits accruing to participants
    under the 2009 Equity Incentive Plan, materially increases the
    aggregate number of common shares that may be issued under the
    2009 Equity Incentive Plan or materially modifies the
    requirements as to eligibility for participation in the 2009
    Equity Incentive Plan. Unless terminated sooner by our board of
    trustees or extended with shareholder approval, the 2009 Equity
    Incentive Plan will terminate on the day before the tenth
    anniversary of the date our board of trustees adopted the 2009
    Equity Incentive Plan.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Severance
    Agreements</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon completion of this offering, we will enter into agreements
    with Mr.&#160;Bortz, our Chairman, President and Chief Executive
    Officer, and Mr.&#160;Martz, our Executive Vice President, and
    we expect to enter into similar agreements with certain
    executive officers that we hire in the future, to provide
    benefits to each in the event his employment is terminated in
    certain circumstances. The Compensation Committee will review
    the terms of these severance agreements annually. As described
    in more detail below, because each officer&#146;s severance
    payment will be derived from his or her annual base salary and
    other annual incentive compensation, we expect that the effect
    on severance payments will be one of the factors considered by
    the Compensation Committee when annually reviewing the
    officer&#146;s total compensation and severance agreement terms.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Severance
    Agreements of Mr.&#160;Bortz and Mr.&#160;Martz</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each of Mr.&#160;Bortz&#146;s and Mr.&#160;Martz&#146;s
    severance agreement will become effective upon closing of this
    offering and will have an initial term of three years; provided,
    however, that the term is automatically extended for an
    additional year on each anniversary date of the effective date
    of the severance agreement beginning on the third anniversary of
    the effective date of the severance agreement unless, not less
    than six months prior to the termination of the then existing
    term, our board of trustees provides notice to the executive of
    its intent not to extend the term further. Mr.&#160;Bortz or
    Mr.&#160;Martz may terminate his agreement prior to the
    expiration of the term as described below.
</DIV>
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<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Termination
    in Connection with a Change in Control</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon 30&#160;days&#146; prior written notice to us, each of
    Mr.&#160;Bortz or Mr.&#160;Martz may terminate his employment
    for &#147;good reason.&#148; The agreement provides that upon
    the termination of Mr.&#160;Bortz or Mr.&#160;Martz either by us
    without &#147;cause&#148; within one year of a change in control
    of our company or by Mr.&#160;Bortz or Mr.&#160;Martz for
    &#147;good reason,&#148; Mr.&#160;Bortz or Mr.&#160;Martz, as
    applicable, will be entitled to the following severance payments
    and benefits:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    a lump sum cash payment equal to the sum of his annual base
    salary, annual cash incentive bonus and accrued vacation time
    earned but not paid to the date of termination;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    a lump sum cash payment equal to the product of three times (in
    the case of Mr.&#160;Bortz) or two times (in the case of
    Mr.&#160;Martz) the sum of (x)&#160;his
    <FONT style="white-space: nowrap">then-current</FONT>
    annual base salary plus (y)&#160;the greater of (i)&#160;the
    bonus most recently paid to him and (ii)&#160;the average of the
    annual cash incentive bonuses paid to him with respect to the
    three most recent fiscal years ending before the date of
    termination;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    a lump sum cash payment equal to three times (in the case of Mr.
    Bortz) or two times (in the case of Mr.&#160;Martz) the annual
    premium or cost (including amounts paid by him) for his health,
    dental, disability and life insurance benefits;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    such other or additional benefits, if any, as are provided under
    applicable plans, programs
    <FONT style="white-space: nowrap">and/or</FONT>
    arrangements of ours (including accelerated vesting of equity
    awards as discussed below under &#147;&#151;&#160;Vesting of
    Long-Term Equity Incentive Awards&#148;).
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Termination
    without Cause</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If either Mr.&#160;Bortz or Mr.&#160;Martz is terminated without
    &#147;cause&#148; and not in connection with or within one year
    of a change in control of our company, Mr.&#160;Bortz or
    Mr.&#160;Martz, as applicable, will be entitled to the following
    severance payments and benefits:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    a lump sum cash payment equal to the sum of his annual base
    salary, annual cash incentive bonus and accrued vacation time
    earned but not paid to the date of termination;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    a lump sum cash payment equal to the sum of (x)&#160;his
    then-current annual base salary, plus (y)&#160;the greater of
    (i)&#160;the bonus most recently paid to him and (ii)&#160;the
    average of the annual cash incentive bonuses paid to him with
    respect to the three most recent fiscal years ending before the
    date of termination;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    a lump sum cash payment equal to the annual premium or cost
    (including amounts paid by him) for his health, dental,
    disability and life insurance benefits;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    such other or additional benefits, if any, as are provided under
    applicable plans, programs
    <FONT style="white-space: nowrap">and/or</FONT>
    arrangements of ours (including accelerated vesting of equity
    awards as discussed below under &#147;&#151;&#160;Vesting of
    Long-Term Equity Incentive Awards&#148;).
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Termination
    without Good Reason</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If either Mr.&#160;Bortz or Mr.&#160;Martz voluntarily
    terminates his employment without &#147;good reason,&#148;
    Mr.&#160;Bortz or Mr.&#160;Martz, as applicable, will be
    entitled to the following severance payments and benefits:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    a lump sum cash payment equal to the sum of his annual base
    salary and accrued vacation time earned but not paid to the date
    of termination;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    such other or additional benefits, if any, as are provided under
    applicable plans, programs
    <FONT style="white-space: nowrap">and/or</FONT>
    arrangements of ours (including accelerated vesting of equity
    awards as discussed below under &#147;&#151;&#160;Vesting of
    Long-Term Equity Incentive Awards&#148;).
</TD>
</TR>

</TABLE>
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    <BR>
    63
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <I><FONT style="font-family: 'Times New Roman', Times">Vesting
    of Long-Term Equity Incentive Awards</FONT></I>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The terms of the time-based LTIP unit award agreements granted
    to each of Mr.&#160;Bortz and Mr.&#160;Martz will provide that:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    Upon a change in control of our company, the unvested units vest.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    Upon termination of Mr.&#160;Bortz&#146;s or
    Mr.&#160;Martz&#146;s, as applicable, employment with our
    company without cause, the unvested units vest.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    Upon termination of Mr.&#160;Bortz&#146;s or
    Mr.&#160;Martz&#146;s, as applicable, employment with our
    company because of his death or disability, the unvested units
    vest.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    Upon termination of Mr.&#160;Bortz&#146;s or
    Mr.&#160;Martz&#146;s, as applicable, employment with our
    company for cause, the unvested units are forfeited.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The time-based LTIP unit award agreements do not provide, in the
    absence of a change in control of our company, for accelerated
    vesting of the unvested units in the event Mr.&#160;Bortz or
    Mr.&#160;Martz, as applicable, terminates his employment with
    our company, for any reason other than death, disability or,
    under certain conditions, retirement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of the time-based LTIP unit award agreements, the
    definitions of &#147;cause,&#148; &#147;good reason&#148; and
    &#147;change in control&#148; are similar but not identical to
    the definitions contained in Mr.&#160;Bortz&#146;s or
    Mr.&#160;Martz&#146;s, as applicable, severance agreement with
    our company. For example, the definition of &#147;good
    reason&#148; for purposes of the award agreements does not
    include any requirement of a change in control. In addition, the
    definition of &#147;change in control&#148; for purposes of the
    award agreements includes mergers and consolidations where the
    outstanding securities of our company represent less than 75% of
    the combined voting power of our company or surviving entity
    after the merger or consolidation and includes a sale of
    substantially all of our assets to an entity in which our
    shareholders own less than 75% of the combined voting power in
    substantially the same proportions as their ownership in our
    company before the sale.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">401(k)
    Plan</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may establish and maintain a retirement savings plan under
    section&#160;401(k) of the Code to cover our eligible employees.
    The Code allows eligible employees to defer a portion of their
    compensation, within prescribed limits, on a pre-tax basis
    through contributions to the 401(k) plan. We may match
    employees&#146; annual contributions, within prescribed limits.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    64
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='110'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">INVESTMENT
    POLICIES AND POLICIES WITH RESPECT TO CERTAIN
    ACTIVITIES</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following is a discussion of our investment policies and our
    policies with respect to certain other activities, including
    financing matters and conflicts of interest. These policies may
    be amended or revised from time to time at the discretion of our
    board of trustees, without a vote of our shareholders. Any
    change to any of these policies by our board of trustees,
    however, would be made only after a thorough review and analysis
    of that change, in light of then-existing business and other
    circumstances, and then only if, in the exercise of its business
    judgment, our board of trustees believes that it is advisable to
    do so in our and our shareholders&#146; best interests. We
    cannot assure you that our investment objectives will be
    attained.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Investments
    in Real Estate or Interests in Real Estate</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We plan to invest principally in hotel properties. At the
    completion of this offering, we will not have identified any
    specific hotel properties to acquire or committed the net
    proceeds of this offering or the concurrent private placement to
    any specific hotel property investment. Our senior executive
    officers will identify and negotiate acquisition opportunities.
    For information concerning the investing experience of these
    individuals, please see the sections entitled &#147;Our
    Business&#148; and &#147;Our Management.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to conduct substantially all of our investment
    activities through our operating partnership and its
    subsidiaries. Our primary investment objectives are to enhance
    shareholder value over time by generating strong returns on
    invested capital, consistently paying attractive distributions
    to our shareholders and achieving long-term appreciation in the
    value of our hotel properties.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    There are no limitations on the amount or percentage of our
    total assets that may be invested in any one property.
    Additionally, no limits have been set on the concentration of
    investments in any one location or facility type.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Additional criteria with respect to our hotel properties is
    described in &#147;Our Business&#160;&#151; Business Strategy
    and Investment Criteria.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Investments
    in Mortgages, Structured Financings and Other Lending
    Policies</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have no current intention of investing in loans secured by
    properties or making loans to persons other than in connection
    with the acquisition of mortgage loans through which we expect
    to achieve equity ownership of the underlying hotel property in
    the near-term.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Investments
    in Securities of or Interests in Persons Primarily Engaged in
    Real Estate Activities and Other Issuers</FONT></B>
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Generally speaking, we do not expect to engage in any
    significant investment activities with other entities, although
    we may consider joint venture investments with other investors.
    We may also invest in the securities of other issuers in
    connection with acquisitions of indirect interests in properties
    (normally general or limited partnership interests in special
    purpose partnerships owning properties). We may in the future
    acquire some, all or substantially all of the securities or
    assets of other REITs or similar entities where that investment
    would be consistent with our investment policies and the REIT
    qualification requirements. There are no limitations on the
    amount or percentage of our total assets that may be invested in
    any one issuer, other than those imposed by the gross income and
    asset tests that we must satisfy to qualify as a REIT. However,
    we do not anticipate investing in other issuers of securities
    for the purpose of exercising control or acquiring any
    investments primarily for sale in the ordinary course of
    business or holding any investments with a view to making
    short-term profits from their sale. In any event, we do not
    intend that our investments in securities will cause us to fall
    within the definition of &#147;investment company&#148; under
    the Investment Company Act of 1940, as amended. For this reason,
    we do not plan to register as an &#147;investment company&#148;
    under the Investment Company Act, and we intend to divest
    securities before any registration would be required.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We do not intend to engage in trading, underwriting, agency
    distribution or sales of securities of other issuers.
</DIV>
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    <BR>
    65
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Disposition
    Policy</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although we have no current plans to dispose of any of the hotel
    properties we acquire, we will consider doing so, subject to
    REIT qualification and prohibited transaction rules under the
    Code, if our management determines that a sale of a property
    would be in our interests based on the price being offered for
    the hotel, the operating performance of the hotel, the tax
    consequences of the sale and other factors and circumstances
    surrounding the proposed sale. See &#147;Risk
    Factors&#160;&#151; Risks Related to Our Business and
    Properties.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Financing
    Policies</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect to maintain a low-leverage capital structure and
    intend to limit the sum of the outstanding principal amount of
    any consolidated indebtedness and the liquidation preference of
    any outstanding preferred shares to not more than 4.5x our
    EBITDA for the
    <FONT style="white-space: nowrap">12-month</FONT>
    period preceding the incurrence of such debt or the issuance of
    such preferred shares. Compliance with this limitation will be
    judged at the time debt is incurred or preferred shares are
    issued, and a subsequent decrease in EBITDA will not require us
    to repay debt or redeem preferred shares. Our board of trustees
    will periodically review this limitation and may modify or
    eliminate it without the approval of our shareholders. For our
    initial debt financing, we intend to obtain a revolving credit
    facility for general business purposes, which may include the
    following:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    funding of investments (following investment of the net proceeds
    of this offering and the concurrent private placement);
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    payment of declared distributions to shareholders;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    working capital needs;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    payment of corporate taxes on our TRS lessees;&#160;or
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    any other payments deemed necessary or desirable by senior
    management and approved by the lender.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to have discussions with several lending institutions
    and negotiate a revolving credit facility. In seeking to obtain
    such a facility, we will consider factors as we deem relevant,
    including interest rate pricing, recurring fees, flexibility of
    funding, security required, maturity, restrictions on prepayment
    and refinancing and restrictions impacting our daily operations.
    There can be no assurance that we will be able to obtain such a
    facility on favorable terms or at all.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Generally, we do not expect to incur debt, pursuant to a
    revolving credit facility or otherwise, until we have invested
    substantially all of the net proceeds of this offering and the
    concurrent private placement, other than possibly assuming debt
    in connection with a hotel acquisition. If we assume debt in
    connection with our initial hotel acquisitions, our debt level
    could temporarily exceed the general limitation described above.
    In measuring our debt for purposes of our general debt
    limitation, we will utilize &#147;net&#148; debt, which is the
    principal amount of our consolidated indebtedness and the
    liquidation preference of any outstanding preferred shares less
    the amount of our cash.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Going forward, we will consider a number of factors when
    evaluating our level of indebtedness and making financial
    decisions, including, among others, the following:
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the interest rate of the proposed financing;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the extent to which the financing impacts the flexibility with
    which we asset manage our properties;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    prepayment penalties and restrictions on refinancing;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the purchase price of properties we acquire with debt financing;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our long-term objectives with respect to the financing;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our target investment returns;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the ability of particular properties, and our company as a
    whole, to generate cash flow sufficient to cover expected debt
    service payments;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    overall level of consolidated indebtedness;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    timing of debt maturities;
</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    66
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    provisions that require recourse and cross-collateralization;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    corporate credit ratios, including debt service or fixed charge
    coverage, debt to EBITDA, debt to total market capitalization
    and debt to undepreciated assets;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the overall ratio of fixed- and variable-rate debt.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Equity
    Capital Policies</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Subject to applicable law and the requirements for listed
    companies on the NYSE, our board of trustees has the authority,
    without further shareholder approval, to issue additional
    authorized common shares and preferred shares or otherwise raise
    capital, including through the issuance of senior securities, in
    any manner and on the terms and for the consideration it deems
    appropriate, including in exchange for property. Existing
    shareholders will have no preemptive right to additional shares
    issued in any offering, and any offering might cause a dilution
    of investment. We may in the future issue common shares in
    connection with acquisitions. We also may issue limited
    partnership interests in our operating partnership in connection
    with acquisitions of property.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of trustees may authorize the issuance of preferred
    shares with terms and conditions that could have the effect of
    delaying, deterring or preventing a transaction or a change in
    control of our company that might involve a premium price for
    holders of our common shares or otherwise might be in their best
    interests. Additionally, preferred shares could have
    distribution, voting, liquidation and other rights and
    preferences that are senior to those of our common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may, under certain circumstances, purchase common or
    preferred shares in the open market or in private transactions
    with our shareholders, if those purchases are approved by our
    board of trustees. Our board of trustees has no present
    intention of causing us to repurchase any shares, and any action
    would only be taken in conformity with applicable federal and
    state laws and the applicable requirements for qualifying as a
    REIT.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the future, we may institute a dividend reinvestment plan, or
    DRIP, which would allow our shareholders to acquire additional
    common shares by automatically reinvesting their cash dividends.
    Shares would be acquired pursuant to the plan at a price equal
    to the then prevailing market price, without payment of
    brokerage commissions or service charges. Shareholders who do
    not participate in the plan will continue to receive cash
    distributions as declared.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Conflict
    of Interest Policy</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our current board of trustees consists of Mr.&#160;Bortz and as
    a result, the transactions and agreements entered into in
    connection with our formation prior to this offering have not
    been approved by any independent trustees.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Effective upon closing of this offering, we intend to adopt
    policies to reduce potential conflicts of interest. Generally,
    we expect that our policy will provide that any transaction,
    agreement or relationship in which any of our trustees, officers
    or employees has an interest must be approved by a majority of
    our disinterested trustees. However, we cannot assure you that
    these policies will be successful in eliminating the influence
    of these conflicts. See &#147;Risk Factors&#160;&#151; Risks
    Related to Our Business and Properties.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Reporting
    Policies</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Generally speaking, we intend to make available to our
    shareholders audited annual financial statements and annual
    reports. After this offering, we will become subject to the
    information reporting requirements of the Securities Exchange
    Act of 1934, as amended, or the Exchange Act. Pursuant to these
    requirements, we will file periodic reports, proxy statements
    and other information, including audited financial statements,
    with the SEC.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    67
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='111'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">OUR
    PRINCIPAL SHAREHOLDERS</FONT></B>
</DIV>

</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth certain information regarding the
    beneficial ownership of common shares by (i)&#160;each of the
    persons who will become a trustee upon completion of this
    offering, (ii)&#160;each of our executive officers and
    (iii)&#160;all of our trustees and executive officers as a group
    upon completion of this offering and the concurrent private
    placement. Unless otherwise indicated, all shares are owned
    directly and the indicated person has sole voting and investment
    power.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>


<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="67%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="13%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="11%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number of Shares<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="left" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Name of Beneficial Owner</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Beneficially Owned</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Percent of Class</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Jon E. Bortz
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    125,000
</TD>
<TD nowrap align="left" valign="bottom">
    <SUP style="font-size: 85%; vertical-align: top">(1)</SUP>

</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Raymond D. Martz
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,000
</TD>
<TD nowrap align="left" valign="bottom">
    <SUP style="font-size: 85%; vertical-align: top">(2)</SUP>

</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cydney C. Donnell
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,500
</TD>
<TD nowrap align="left" valign="bottom">
    <SUP style="font-size: 85%; vertical-align: top">(3)</SUP>

</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Ron E. Jackson
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,500
</TD>
<TD nowrap align="left" valign="bottom">
    <SUP style="font-size: 85%; vertical-align: top">(3)</SUP>

</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Martin H. Nesbitt
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,500
</TD>
<TD nowrap align="left" valign="bottom">
    <SUP style="font-size: 85%; vertical-align: top">(3)</SUP>

</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Michael J. Schall
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,500
</TD>
<TD nowrap align="left" valign="bottom">
    <SUP style="font-size: 85%; vertical-align: top">(3)</SUP>

</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Earl E. Webb
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,500
</TD>
<TD nowrap align="left" valign="bottom">
    <SUP style="font-size: 85%; vertical-align: top">(3)</SUP>

</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Laura H. Wright
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    2,500
</TD>
<TD nowrap align="left" valign="bottom">
    <SUP style="font-size: 85%; vertical-align: top">(3)</SUP>

</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="top">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    All executive officers and trustees as a group
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    150,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    *
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 12pt; margin-left: 0%; width: 10%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=48 -->


<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    <FONT style="font-size: 8pt">*&#160;
    </FONT></TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 8pt">Represents less than 1% of the
    number of outstanding common shares upon completion of this
    offering.
    </FONT></TD>
</TR>

</TABLE>



<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    <FONT style="font-size: 8pt">(1)
    </FONT></TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 8pt">We will sell Mr.&#160;Bortz 125,000
    common shares in a private placement concurrent with the closing
    of this offering at a price per share equal to the public
    offering price in this offering. Mr.&#160;Bortz acquired 1,000
    common shares in connection with the formation and initial
    capitalization of our company at a cost of $1,000. We will
    repurchase these shares at his cost upon completion of this
    offering. Does not include 723,035 common shares issuable upon
    conversion of 723,035 LTIP units to be granted to Mr.&#160;Bortz
    upon completion of this offering. These LTIP units will vest
    ratably on each of the first five anniversaries of the date of
    grant. Also does not include 30,000 restricted common shares
    expected to be granted to Mr.&#160;Bortz at the first meeting of
    the board of trustees following completion of this offering
    pursuant to our 2009 Equity Incentive Plan as part of our 2010
    compensation program, which shares will vest ratably on each of
    the first three anniversaries of the date of grant.
    </FONT></TD>
</TR>

</TABLE>



<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    <FONT style="font-size: 8pt">(2)
    </FONT></TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 8pt">We will sell Mr.&#160;Martz 10,000
    common shares in a private placement concurrent with the closing
    of this offering at a price per share equal to the public
    offering price in this offering. Does not include
    132,260&#160;common shares issuable upon conversion of
    132,260&#160;LTIP units to be granted to Mr.&#160;Martz upon
    completion of this offering. These LTIP units will vest ratably
    on each of the first five anniversaries of the date of grant.
    Also does not include 15,000 restricted common shares expected
    to be granted to Mr.&#160;Martz at the first meeting of the
    board of trustees following completion of this offering pursuant
    to our 2009 Equity Incentive Plan as part of the 2010
    compensation program, which shares will vest ratably on each of
    the first three anniversaries of the date of grant.
    </FONT></TD>
</TR>

</TABLE>



<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    <FONT style="font-size: 8pt">(3)
    </FONT></TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 8pt">We will grant 2,500 common shares
    to each initial independent trustee upon completion of this
    offering, which shares will vest ratably on each of the first
    three anniversaries of the date of grant.
    </FONT></TD>
</TR>

</TABLE>





<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We currently have outstanding 1,000 common shares, all of which
    are owned by our Chairman, President and Chief Executive
    Officer, Mr.&#160;Bortz. Upon completion of this offering, we
    will repurchase all 1,000 common shares from Mr.&#160;Bortz at
    his cost of $1.00 per share.
</DIV>

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    <BR>
    68
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<A name='112'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS</FONT></B>
</DIV>

</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will use approximately $100,000 of the net proceeds to
    reimburse Mr.&#160;Bortz for
    <FONT style="white-space: nowrap">out-of-pocket</FONT>
    expenses he incurred in connection with the formation of our
    company and this offering and $1,000 to repurchase the shares he
    acquired in connection with the formation and initial
    capitalization of our company.
</DIV>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will sell 125,000 and 10,000 common shares to Mr.&#160;Bortz
    and Mr.&#160;Martz, respectively, in a private placement
    concurrent with the closing of this offering at a price per
    share equal to the public offering price in this offering.
</DIV>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon completion of this offering, we will cause our operating
    partnership to issue 723,035 LTIP units to Mr. Bortz, 132,260
    LTIP units to Mr. Martz and 26,455 LTIP units to
    Mr.&#160;Dittamo. If the size of this offering changes, the
    aggregate number of LTIP units to be granted to
    Messrs.&#160;Bortz, Martz and Dittamo will change so as to equal
    5% of the common shares issued in this offering (excluding any
    shares issued pursuant to the underwriters&#146; overallotment
    option) and in the concurrent private placement. These LTIP
    units will vest ratably on each of the first five anniversaries
    of the date of grant. LTIP units, whether vested or not, will
    receive the same
    <FONT style="white-space: nowrap">per-unit</FONT>
    profit distributions as units of our operating partnership,
    which distributions generally will equal per share distributions
    on our common shares.
</DIV>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect to make grants of restricted common shares, following
    the approval thereof at the first meeting of our board of
    trustees following completion of this offering, of
    30,000&#160;shares to Mr.&#160;Bortz and 15,000&#160;shares to
    Mr.&#160;Martz, having aggregate values of $600,000 and
    $300,000, respectively, based upon the public offering price
    per&#160;share of $20.00. Distributions will be paid on these
    and any other restricted common shares, whether vested or not,
    when distributions are declared and paid on our common shares.
</DIV>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon completion of this offering, we will enter into a Change in
    Control Severance Agreement with each of Mr.&#160;Bortz and
    Mr.&#160;Martz which agreement will provide for payments and
    other benefits to Mr.&#160;Bortz and Mr.&#160;Martz if their
    employment with us is terminated under certain circumstances.
    See &#147;Our Management&#151;Severance Agreements.&#148;
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We also expect to enter into indemnification agreements with our
    trustees and our executive officers providing for procedures for
    indemnification by us to the fullest extent permitted by law and
    advancements by us of certain expenses and costs relating to
    claims, suits or proceedings arising from their service to us.
</DIV>
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    <BR>
    69
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<A name='113'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">DESCRIPTION
    OF SHARES&#160;OF BENEFICIAL INTEREST</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although the following summary describes the material terms of
    our shares of beneficial interest, it is not a complete
    description of the Maryland REIT Law, or the MRL, the MGCL
    provisions applicable to a Maryland real estate investment trust
    or our declaration of trust and bylaws, copies of which are
    filed as exhibits to the registration statement of which this
    prospectus is a part. See &#147;Where You Can Find More
    Information.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">General</FONT></B>
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following describes the material terms of our declaration of
    trust upon completion of this offering. Our declaration of trust
    will provide that we may issue up to 500,000,000&#160;common
    shares, $0.01&#160;par value per share, and
    100,000,000&#160;preferred shares of beneficial interest,
    $0.01&#160;par value per share, or preferred shares. We issued
    1,000 common shares in connection with our initial
    capitalization. Upon completion of this offering, we will
    repurchase these shares. Our declaration of trust will authorize
    our board of trustees to amend our declaration of trust to
    increase or decrease the aggregate number of authorized shares
    or the number of shares of any class or series without
    shareholder approval. Upon completion of this offering,
    17,650,000&#160;common shares will be issued and outstanding on
    a fully diluted basis, including 15,000 restricted common shares
    to be granted to our initial independent trustees under our 2009
    Equity Incentive Plan upon completion of this offering and an
    aggregate of 135,000 shares sold to Messrs.&#160;Bortz and Martz
    in the concurrent private placement, or 20,275,000 common shares
    if the underwriters&#146; overallotment option is exercised in
    full, and no preferred shares will be issued and outstanding. In
    addition, we expect grants of an aggregate of 48,000 restricted
    common shares to Messrs.&#160;Bortz, Martz and Dittamo pursuant
    to our 2009 Equity Incentive Plan will be approved at the first
    meeting of our board of trustees following completion of this
    offering as part of our 2010 compensation program. Our 2009
    Equity Incentive Plan provides for the issuance of aggregate
    share awards equal to 7.5% of the number of common shares issued
    in this offering (excluding any shares issued pursuant to the
    underwriters&#146; overallotment option) and in the concurrent
    private placement. Based on an offering of
    17,500,000&#160;shares and 135,000&#160;shares sold pursuant to
    the concurrent private placement, 1,322,625 common shares will
    be available for issuance under the 2009 Equity Incentive Plan.
    After the grant of an aggregate of 881,750 LTIP units (which are
    ultimately exchangeable for our common shares on a one-for-one
    basis) to Messrs.&#160;Bortz, Martz and Dittamo, an aggregate of
    15,000 restricted common shares to our initial independent
    trustees and an aggregate of 48,000 restricted common shares to
    Messrs.&#160;Bortz, Martz and Dittamo at the first meeting of
    our board of trustees following completion of this offering,
    377,875 common shares will remain available for grant under the
    2009 Equity Incentive Plan. If the size of this offering
    changes, the aggregate number of LTIP units to be granted to
    Messrs. Bortz, Martz and Dittamo will change so as to equal 5%
    of the common shares issued in this offering (excluding any
    shares granted pursuant to the underwriters&#146; overallotment
    option) and in the concurrent private placement and the
    aggregate number of shares and the remaining number of shares
    reserved for issuance under the 2009 Equity Incentive Plan will
    change accordingly.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under Maryland law, shareholders are not personally liable for
    the obligations of a real estate investment trust solely as a
    result of their status as shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Common
    Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All of the common shares offered in this offering will be duly
    authorized, fully paid and nonassessable. Subject to the
    preferential rights, if any, of holders of any other class or
    series of shares of beneficial interest and to the provisions of
    our declaration of trust regarding the restrictions on ownership
    and transfer of shares of beneficial interest, holders of our
    common shares are entitled to receive distributions on such
    shares of beneficial interest out of assets legally available
    therefor if, as and when authorized by our board of trustees and
    declared by us, and the holders of our common shares are
    entitled to share ratably in our assets legally available for
    distribution to our shareholders in the event of our
    liquidation, dissolution or winding up after payment of or
    adequate provision for all of our known debts and liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Subject to the provisions of our declaration of trust regarding
    the restrictions on ownership and transfer of common shares of
    beneficial interest and except as may otherwise be specified in
    the terms of any
</DIV>
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    <BR>
    70
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    class or series of common shares, each outstanding common share
    entitles the holder to one vote on all matters submitted to a
    vote of shareholders, including the election of trustees, and,
    except as provided with respect to any other class or series of
    shares of beneficial interest, the holders of such common shares
    will possess the exclusive voting power. There is no cumulative
    voting in the election of our trustees, which means that the
    shareholders entitled to cast a majority of the votes entitled
    to be cast in the election of trustees can elect all of the
    trustees then standing for election, and the remaining
    shareholders will not be able to elect any trustees.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Holders of common shares have no preference, conversion,
    exchange, sinking fund, redemption or appraisal rights and have
    no preemptive rights to subscribe for any of our securities.
    Subject to the restrictions on ownership and transfer of shares
    contained in our declaration of trust and the terms of any other
    class or series of common shares, all of our common shares will
    have equal dividend, liquidation and other rights.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Power to
    Reclassify Our Unissued Shares of Beneficial Interest</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our declaration of trust authorizes our board of trustees to
    classify and reclassify any unissued common or preferred shares
    into other classes or series of shares of beneficial interest.
    Prior to the issuance of shares of each class or series, our
    board of trustees is required by Maryland law and by our
    declaration of trust to set, subject to the provisions of our
    declaration of trust regarding the restrictions on ownership and
    transfer of shares of beneficial interest, the preferences,
    conversion or other rights, voting powers, restrictions,
    limitations as to dividends or other distributions,
    qualifications and terms or conditions of redemption for each
    class or series. Therefore, our board could authorize the
    issuance of common shares or preferred shares that have priority
    over our common shares as to voting rights, dividends or upon
    liquidation or with terms and conditions that could have the
    effect of delaying, deferring or preventing a change in control
    or other transaction that might involve a premium price for our
    common shares or otherwise be in the best interests of our
    shareholders. No preferred shares are presently outstanding, and
    we have no present plans to issue any preferred shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Power to
    Increase or Decrease Authorized Shares of Beneficial Interest
    and Issue Additional Common Shares and Preferred
    Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe that the power of our board of trustees to amend our
    declaration of trust to increase or decrease the number of
    authorized shares of beneficial interest, to authorize us to
    issue additional authorized but unissued common shares or
    preferred shares and to classify or reclassify unissued common
    shares or preferred shares and thereafter to issue such
    classified or reclassified shares of beneficial interest will
    provide us with increased flexibility in structuring possible
    future financings and acquisitions and in meeting other needs
    that might arise. The additional classes or series, as well as
    the common shares, will be available for issuance without
    further action by our shareholders, unless such action is
    required by applicable law or the rules of any stock exchange or
    automated quotation system on which our securities may be listed
    or traded. Although our board of trustees does not intend to do
    so, it could authorize us to issue a class or series that could,
    depending upon the terms of the particular class or series,
    delay, defer or prevent a change in control or other transaction
    that might involve a premium price for our common shares or
    otherwise be in the best interests of our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Restrictions
    on Ownership and Transfer</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For us to qualify as a REIT under the Code, our shares of
    beneficial interest must be beneficially owned by 100 or more
    persons during at least 335&#160;days of a taxable year of
    12&#160;months (other than the first year for which an election
    to be a REIT has been made) or during a proportionate part of a
    shorter taxable year. Also, not more than 50% of the value of
    our outstanding shares of beneficial interest may be owned,
    directly or indirectly, by five or fewer individuals (as defined
    in the Code to include certain entities) during the last half of
    a taxable year (other than the first year for which an election
    to be a REIT has been made).
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Because our board of trustees believes it is at present
    essential for us to qualify as a REIT, our declaration of trust,
    subject to certain exceptions, restricts the amount of our
    shares of beneficial interest that a person may beneficially or
    constructively own. Our declaration of trust provides that,
    subject to certain
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    exceptions, no person may beneficially or constructively own
    more than 9.8% in value or in number of shares, whichever is
    more restrictive, of the outstanding shares of any class or
    series of our shares of beneficial interest.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our declaration of trust also prohibits any person from
    (i)&#160;beneficially owning shares of beneficial interest to
    the extent that such beneficial ownership would result in our
    being &#147;closely held&#148; within the meaning of
    Section&#160;856(h) of the Code (without regard to whether the
    ownership interest is held during the last half of the taxable
    year), (ii)&#160;transferring our shares of beneficial interest
    to the extent that such transfer would result in our shares of
    beneficial interest being beneficially owned by less than
    100&#160;persons (determined under the principles of
    Section&#160;856(a)(5) of the Code), (iii)&#160;beneficially or
    constructively owning our shares of beneficial interest to the
    extent such beneficial or constructive ownership would cause us
    to constructively own ten percent or more of the ownership
    interests in a tenant (other than a TRS) of our real property
    within the meaning of Section&#160;856(d)(2)(B) of the Code or
    (iv)&#160;beneficially or constructively owning or transferring
    our shares of beneficial interest if such ownership or transfer
    would otherwise cause us to fail to qualify as a REIT under the
    Code, including, but not limited to, as a result of any hotel
    management companies failing to qualify as &#147;eligible
    independent contractors&#148; under the REIT rules. Any person
    who acquires or attempts or intends to acquire beneficial or
    constructive ownership of our shares of beneficial interest that
    will or may violate any of the foregoing restrictions on
    transferability and ownership, or any person who would have
    owned our shares of beneficial interest that resulted in a
    transfer of shares to a charitable trust, is required to give
    written notice immediately to us, or in the case of a proposed
    or attempted transaction, to give at least 15&#160;days&#146;
    prior written notice, and provide us with such other information
    as we may request in order to determine the effect of such
    transfer on our status as a REIT. The foregoing restrictions on
    transferability and ownership will not apply if our board of
    trustees determines that it is no longer in our best interests
    to attempt to qualify, or to continue to qualify, as a REIT.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of trustees, in its sole discretion, may prospectively
    or retroactively exempt a person from certain of the limits
    described in the paragraph above and may establish or increase
    an excepted holder percentage limit for such person. The person
    seeking an exemption must provide to our board of trustees such
    representations, covenants and undertakings as our board of
    trustees may deem appropriate in order to conclude that granting
    the exemption will not cause us to lose our status as a REIT.
    Our board of trustees may not grant such an exemption to any
    person if such exemption would result in our failing to qualify
    as a REIT. Our board of trustees may require a ruling from the
    IRS or an opinion of counsel, in either case in form and
    substance satisfactory to the board of trustees, in its sole
    discretion, in order to determine or ensure our status as a REIT.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any attempted transfer of our shares of beneficial interest
    which, if effective, would violate any of the restrictions
    described above will result in the number of shares causing the
    violation (rounded up to the nearest whole share) to be
    automatically transferred to a trust for the exclusive benefit
    of one or more charitable beneficiaries, except that any
    transfer that results in the violation of the restriction
    relating to our shares of beneficial interest being beneficially
    owned by fewer than 100&#160;persons will be void <I>ab
    initio</I>. In either case, the proposed transferee will not
    acquire any rights in such shares. The automatic transfer will
    be deemed to be effective as of the close of business on the
    business day prior to the date of the purported transfer or
    other event that results in the transfer to the trust. Shares
    held in the trust will be issued and outstanding shares. The
    proposed transferee will not benefit economically from ownership
    of any shares held in the trust, will have no rights to
    dividends or other distributions and will have no rights to vote
    or other rights attributable to the shares held in the trust.
    The trustee of the trust will have all voting rights and rights
    to dividends or other distributions with respect to shares held
    in the trust. These rights will be exercised for the exclusive
    benefit of the charitable beneficiary. Any dividend or other
    distribution paid prior to our discovery that shares have been
    transferred to the trust will be paid by the recipient to the
    trustee upon demand. Any distribution authorized but unpaid will
    be paid when due to the trustee. Any dividend or other
    distribution paid to the trustee will be held in trust for the
    charitable beneficiary. Subject to Maryland law, the trustee
    will have the authority (i)&#160;to rescind as void any vote
    cast by the proposed transferee prior to our discovery that the
    shares have been transferred to the trust and (ii)&#160;to
    recast the vote in accordance with the desires of the trustee
    acting for the benefit of the charitable beneficiary. However,
    if we have already taken irreversible corporate action, then the
    trustee will not have the authority to rescind and recast the
    vote.
</DIV>
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    <BR>
    72
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Within 20&#160;days of receiving notice from us that shares of
    beneficial interest have been transferred to the trust, the
    trustee will sell the shares to a person designated by the
    trustee, whose ownership of the shares will not violate the
    above ownership and transfer limitations. Upon the sale, the
    interest of the charitable beneficiary in the shares sold will
    terminate and the trustee will distribute the net proceeds of
    the sale to the proposed transferee and to the charitable
    beneficiary as follows. The proposed transferee will receive the
    lesser of (i)&#160;the price paid by the proposed transferee for
    the shares or, if the proposed transferee did not give value for
    the shares in connection with the event causing the shares to be
    held in the trust (<I>e.g.</I>, a gift, devise or other similar
    transaction), the market price (as defined in our declaration of
    trust) of the shares on the trading day immediately preceding
    the day of the event causing the shares to be held in the trust
    and (ii)&#160;the price received by the trustee (net of any
    commission and other expenses of sale) from the sale or other
    disposition of the shares. The trustee may reduce the amount
    payable to the proposed transferee by the amount of dividends or
    other distributions paid to the proposed transferee and owed by
    the proposed transferee to the trustee. Any net sale proceeds in
    excess of the amount payable to the proposed transferee will be
    paid immediately to the charitable beneficiary. If, prior to our
    discovery that our shares have been transferred to the trust,
    the shares are sold by the proposed transferee, then
    (i)&#160;the shares shall be deemed to have been sold on behalf
    of the trust and (ii)&#160;to the extent that the proposed
    transferee received an amount for the shares that exceeds the
    amount he or she was entitled to receive, the excess shall be
    paid to the trustee upon demand.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, shares of beneficial interest held in the trust
    will be deemed to have been offered for sale to us, or our
    designee, at a price per share equal to the lesser of
    (i)&#160;the price per share in the transaction that resulted in
    the transfer to the trust (or, in the case of a devise, gift or
    similar transaction, the market price on the trading day
    immediately preceding the day of the event causing the shares to
    be held in the trust) and (ii)&#160;the market price on the date
    we, or our designee, accept the offer, which we may reduce by
    the amount of dividends and distributions paid to the proposed
    transferee and owed by the proposed transferee to the trustee.
    We will have the right to accept the offer until the trustee has
    sold the shares. Upon a sale to us, the interest of the
    charitable beneficiary in the shares sold will terminate and the
    trustee will distribute the net proceeds of the sale to the
    proposed transferee and the charitable beneficiary and any
    dividends or other distributions held by the trustee shall be
    paid to the charitable beneficiary.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If a transfer to a charitable trust, as described above, would
    be ineffective for any reason to prevent a violation of a
    restriction, the transfer that would have resulted in such
    violation will be void <I>ab initio</I>, and the proposed
    transferee shall acquire no rights in such shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Every owner of more than 5% (or such lower percentage as
    required by the Code or the regulations promulgated thereunder)
    of our shares of beneficial interest, within 30&#160;days after
    the end of each taxable year, is required to give us written
    notice, stating his or her name and address, the number of
    shares of each class and series of our shares of beneficial
    interest that he or she beneficially owns and a description of
    the manner in which the shares are held. Each such owner will
    provide us with such additional information as we may request in
    order to determine the effect, if any, of his or her beneficial
    ownership on our status as a REIT and to ensure compliance with
    the ownership limits. In addition, each shareholder will upon
    demand be required to provide us with such information as we may
    request in good faith in order to determine our status as a REIT
    and to comply with the requirements of any taxing authority or
    governmental authority or to determine such compliance.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These ownership limitations could delay, defer or prevent a
    transaction or a change in control that might involve a premium
    price for our common shares or otherwise be in the best interest
    of our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Stock
    Exchange Listing</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect to apply for listing of our common shares on the NYSE
    under the symbol &#147;PEB.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Transfer
    Agent and Registrar</FONT></B>
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect the transfer agent and registrar for our common shares
    to be Wells Fargo Bank, N.A.
</DIV>

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    <BR>
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<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SHARES&#160;ELIGIBLE
    FOR FUTURE SALE</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Prior to this offering, there has been no public market for our
    common shares. We cannot predict the effect, if any, that sales
    of common shares or the availability of shares for sale will
    have on the market price of our common shares prevailing from
    time to time. Sales of substantial amounts of our common shares
    in the public market, or the perception that such sales could
    occur, could adversely affect the prevailing market price of our
    common shares.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon completion of this offering, we will have 17,650,000 common
    shares outstanding, including the common shares sold in this
    offering, 15,000 restricted common shares to be granted to our
    initial independent trustees under our 2009 Equity Incentive
    Plan upon completion of this offering and an aggregate of
    135,000 shares sold to Messrs. Bortz and Martz in the concurrent
    private placement, or 20,275,000 common shares if the
    underwriters&#146; overallotment option is exercised in full. In
    addition, we expect grants of an aggregate of 48,000 restricted
    common shares to Messrs.&#160;Bortz, Martz and Dittamo pursuant
    to our 2009 Equity Incentive Plan will be approved at the first
    meeting of our board of trustees following completion of this
    offering as part of our 2010 compensation program. Our 2009
    Equity Incentive Plan provides for the issuance of aggregate
    share awards equal to 7.5% of the number of common shares issued
    in this offering (excluding any shares issued pursuant to the
    underwriters&#146; overallotment option) and in the concurrent
    private placement. Based on an offering of
    17,500,000&#160;shares and 135,000&#160;shares sold pursuant to
    the concurrent private placement, 1,322,625 common shares will
    be available for issuance under the 2009 Equity Incentive Plan.
    After the grant of an aggregate of 881,750 LTIP units (which are
    ultimately exchangeable for our common shares on a one-for-one
    basis) to Messrs.&#160;Bortz, Martz and Dittamo, an aggregate of
    15,000 restricted common shares to our initial independent
    trustees and an aggregate of 48,000 restricted common shares to
    Messrs.&#160;Bortz, Martz and Dittamo at the first meeting of
    our board of trustees following completion of this offering,
    377,875 common shares will remain available for grant under the
    2009 Equity Incentive Plan. If the size of this offering
    changes, the aggregate number of LTIP units to be granted to
    Messrs. Bortz, Martz and Dittamo will change so as to equal 5%
    of the outstanding common shares issued in this offering
    (excluding any shares issued pursuant to the underwriters&#146;
    overallotment option) and in the concurrent private placement
    and the aggregate number of shares and the remaining number of
    shares reserved for issuance under the 2009 Equity Incentive
    Plan will change accordingly.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    No assurance can be given as to the likelihood that an active
    trading market for our common shares will develop or be
    maintained, that any such market will be liquid, that
    shareholders will be able to sell the common shares when issued
    or at all or the prices that shareholders may obtain for any of
    the common shares. No prediction can be made as to the effect,
    if any, that future issuances of common shares or the
    availability of common shares for future issuances will have on
    the market price of our common shares prevailing from time to
    time, issuances of substantial amounts of common shares, or the
    perception that such issuances could occur, may affect adversely
    the prevailing market price of our common shares. See &#147;Risk
    Factors&#160;&#151; Risks Related to This Offering.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The common shares sold in this offering will be freely tradable
    without restriction or further registration under the Securities
    Act of 1933, as amended, or the Securities Act, unless the
    shares are held by any of our &#147;affiliates,&#148; as that
    term is defined in Rule&#160;144 under the Securities Act. As
    defined in Rule&#160;144, an &#147;affiliate&#148; of an issuer
    is a person that directly, or indirectly through one or more
    intermediaries, controls, is controlled by or is under common
    control with the issuer.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Rule&#160;144</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The shares sold to Messrs. Bortz and Martz in the concurrent
    private placement will be restricted shares as defined in
    Rule&#160;144.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In general, Rule&#160;144 provides that if (i)&#160;one year has
    elapsed since the date of acquisition of common shares from us
    or any of our affiliates and (ii)&#160;the holder is, and has
    not been, an affiliate of ours at any time during the three
    months preceding the proposed sale, such holder may sell such
    common shares in the public market under Rule&#160;144(b)(1)
    without regard to the volume limitations, manner of sale
    provisions, public information requirements or notice
    requirements under such rule. In general, Rule&#160;144 also
    provides that if
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (i)&#160;six months have elapsed since the date of acquisition
    of common shares from us or any of our affiliates, (ii)&#160;we
    have been a reporting company under the Exchange Act for at
    least 90&#160;days and (iii)&#160;the holder is not, and has not
    been, an affiliate of ours at any time during the three months
    preceding the proposed sale, such holder may sell such common
    shares in the public market under Rule&#160;144(b)(1) subject to
    satisfaction of Rule&#160;144&#146;s public information
    requirements, but without regard to the volume limitations,
    manner of sale provisions or notice requirements under such rule.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, under Rule&#160;144, if (i)&#160;one year (or,
    subject to us being a reporting company under the Exchange Act
    for at least the preceding 90&#160;days, six months) has elapsed
    since the date of acquisition of common shares from us or any of
    our affiliates and (ii)&#160;the holder is, or has been, an
    affiliate of ours at any time during the three months preceding
    the proposed sale, such holder may sell such common shares in
    the public market under Rule&#160;144(b)(1) subject to
    satisfaction of Rule&#160;144&#146;s volume limitations, manner
    of sale provisions, public information requirements and notice
    requirements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Following completion of this offering, we intend to file a
    registration statement on
    <FONT style="white-space: nowrap">Form&#160;S-8</FONT>
    to register the total number of common shares that may be issued
    under our 2009 Equity Incentive Plan.
</DIV>
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<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">CERTAIN
    PROVISIONS OF MARYLAND LAW AND OF OUR DECLARATION OF TRUST<BR>
    AND BYLAWS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Although the following summary describes certain provisions of
    Maryland law and of our declaration of trust and bylaws, it is
    not a complete description of Maryland law and our declaration
    of trust and bylaws, copies of which are available from us upon
    request. See &#147;Where You Can Find More Information.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Number of
    Trustees; Vacancies</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our declaration of trust and bylaws provide that the number of
    our trustees may be established by our board of trustees but may
    not be more than 15. Our declaration of trust also provides
    that, at such time as we have at least three independent
    trustees and a class of our common shares or preferred shares is
    registered under the Exchange Act, we elect to be subject to the
    provision of Subtitle 8 of Title&#160;3 of the MGCL regarding
    the filling of vacancies on our board of trustees. Accordingly,
    at such time, except as may be provided by our board of trustees
    in setting the terms of any class or series of shares, any and
    all vacancies on our board of trustees may be filled only by the
    affirmative vote of a majority of the remaining trustees in
    office, even if the remaining trustees do not constitute a
    quorum, and any individual elected to fill such vacancy will
    serve for the remainder of the full term of the class in which
    the vacancy occurred and until a successor is duly elected and
    qualifies.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each of our trustees will be elected by our shareholders to
    serve for a one-year term and until his or her successor is duly
    elected and qualifies. A plurality of all votes cast on the
    matter at a meeting of shareholders at which a quorum is present
    is sufficient to elect a trustee. The presence in person or by
    proxy of shareholders entitled to cast a majority of all the
    votes entitled to be cast at a meeting constitutes a quorum.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Removal
    of Trustees</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our declaration of trust provides that, subject to the rights of
    holders of any series of preferred shares, a trustee may be
    removed only for &#147;cause,&#148; and then only by the
    affirmative vote of at least two-thirds of the votes entitled to
    be cast generally in the election of trustees. For this purpose,
    &#147;cause&#148; means, with respect to any particular trustee,
    conviction of a felony or a final judgment of a court of
    competent jurisdiction holding that such trustee caused
    demonstrable, material harm to us through bad faith or active
    and deliberate dishonesty. These provisions, when coupled with
    the exclusive power of our board of trustees to fill vacancies
    on our board of trustees, generally precludes shareholders from
    (i)&#160;removing incumbent trustees except for
    &#147;cause&#148; and with a substantial affirmative vote and
    (ii)&#160;filling the vacancies created by such removal with
    their own nominees.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Policy on
    Majority Voting</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of trustees will adopt a policy regarding the election
    of trustees in uncontested elections. Pursuant to such policy,
    in an uncontested election of trustees, any nominee who receives
    a greater number of votes affirmatively <I>withheld </I>from his
    or her election than votes <I>for</I> his or her election will,
    within two weeks following certification of the shareholder vote
    by our company, submit a written resignation offer to our board
    of trustees for consideration by our Nominating and Corporate
    Governance Committee. Our Nominating and Corporate Governance
    Committee will consider the resignation offer and, within
    60&#160;days following certification by our company of the
    shareholder vote with respect to such election, will make a
    recommendation to our board of trustees concerning the
    acceptance or rejection of the resignation offer. Our board of
    trustees will take formal action on the recommendation no later
    than 90&#160;days following certification of the shareholder
    vote by our company. We will publicly disclose, in a
    <FONT style="white-space: nowrap">Form&#160;8-K</FONT>
    filed with the SEC, the decision of our board of trustees. Our
    board of trustees will also provide an explanation of the
    process by which the decision was made and, if applicable, its
    reason or reasons for rejecting the tendered resignation.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Business
    Combinations</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under certain provisions of the MGCL applicable to Maryland real
    estate investment trusts, certain &#147;business
    combinations,&#148; including a merger, consolidation, share
    exchange or, in certain circumstances, an
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    asset transfer or issuance or reclassification of equity
    securities, between a Maryland real estate investment trust and
    an &#147;interested shareholder&#148; or, generally, any person
    who beneficially owns 10% or more of the voting power of the
    real estate investment trust&#146;s outstanding voting shares or
    an affiliate or associate of the real estate investment trust
    who, at any time within the two-year period prior to the date in
    question, was the beneficial owner of 10% or more of the voting
    power of the then outstanding voting shares of beneficial
    interest of the real estate investment trust, or an affiliate of
    such an interested shareholder, are prohibited for five years
    after the most recent date on which the interested shareholder
    becomes an interested shareholder. Thereafter, any such business
    combination must be recommended by the board of trustees of such
    real estate investment trust and approved by the affirmative
    vote of at least (a)&#160;80% of the votes entitled to be cast
    by holders of outstanding voting shares of beneficial interest
    of the real estate investment trust and (b)&#160;two-thirds of
    the votes entitled to be cast by holders of voting shares of
    beneficial interest of the real estate investment trust other
    than shares held by the interested shareholder with whom (or
    with whose affiliate) the business combination is to be effected
    or held by an affiliate or associate of the interested
    shareholder, unless, among other conditions, the real estate
    investment trust&#146;s shareholders receive a minimum price (as
    defined in the MGCL) for their shares and the consideration is
    received in cash or in the same form as previously paid by the
    interested shareholder for its shares. Under the MGCL, a person
    is not an &#147;interested shareholder&#148; if the board of
    trustees approved in advance the transaction by which the person
    otherwise would have become an interested shareholder. A real
    estate investment trust&#146;s board of trustees may provide
    that its approval is subject to compliance with any terms and
    conditions determined by&#160;it.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These provisions of the MGCL do not apply, however, to business
    combinations that are approved or exempted by a board of
    trustees prior to the time that the interested shareholder
    becomes an interested shareholder. Pursuant to the statute, our
    board of trustees has by resolution exempted business
    combinations between us and any other person from these
    provisions of the MGCL, provided that the business combination
    is first approved by our board of trustees, including a majority
    of trustees who are not affiliates or associates of such person,
    and, consequently, the five year prohibition and the
    supermajority vote requirements will not apply to such business
    combinations. As a result, any person may be able to enter into
    business combinations with us that may not be in the best
    interests of our shareholders without compliance by us with the
    supermajority vote requirements and other provisions of the
    statute. This resolution, however, may be altered or repealed in
    whole or in part at any time. If this resolution is repealed, or
    our board of trustees does not otherwise approve a business
    combination, the statute may discourage others from trying to
    acquire control of us and increase the difficulty of
    consummating any offer.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Control
    Share Acquisitions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The MGCL provides that &#147;control shares&#148; of a Maryland
    real estate investment trust acquired in a &#147;control share
    acquisition&#148; have no voting rights except to the extent
    approved by the affirmative vote of two-thirds of the votes
    entitled to be cast on the matter, excluding shares of
    beneficial interest in a real estate investment trust in respect
    of which any of the following persons is entitled to exercise or
    direct the exercise of the voting power of such shares in the
    election of trustees: (1)&#160;a person who makes or proposes to
    make a control share acquisition, (2)&#160;an officer of the
    real estate investment trust or (3)&#160;an employee of the real
    estate investment trust who is also a trustee of the real estate
    investment trust. &#147;Control shares&#148; are voting shares
    which, if aggregated with all other such shares owned by the
    acquirer, or in respect of which the acquirer is able to
    exercise or direct the exercise of voting power (except solely
    by virtue of a revocable proxy), would entitle the acquirer to
    exercise voting power in electing trustees within one of the
    following ranges of voting power: (A)&#160;one-tenth or more but
    less than one-third, (B)&#160;one-third or more but less than a
    majority or (C)&#160;a majority or more of all voting power.
    Control shares do not include shares that the acquirer is then
    entitled to vote as a result of having previously obtained
    shareholder approval. A &#147;control share acquisition&#148;
    means the acquisition of control shares, subject to certain
    exceptions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A person who has made or proposes to make a control share
    acquisition, upon satisfaction of certain conditions (including
    an undertaking to pay expenses), may compel our board of
    trustees to call a special meeting of shareholders to be held
    within 50&#160;days of demand to consider the voting rights of
    the shares. If no request for a meeting is made, the real estate
    investment trust may itself present the question at any
    shareholders&#146; meeting.
</DIV>
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    <BR>
    77
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If voting rights are not approved at the meeting or if the
    acquirer does not deliver an acquiring person statement as
    required by the statute, then, subject to certain conditions and
    limitations, the real estate investment trust may redeem any or
    all of the control shares (except those for which voting rights
    have previously been approved) for fair value determined,
    without regard to the absence of voting rights for the control
    shares, as of the date of the last control share acquisition by
    the acquirer or of any meeting of shareholders at which the
    voting rights of such shares are considered and not approved. If
    voting rights for control shares are approved at a
    shareholders&#146; meeting and the acquirer becomes entitled to
    exercise or direct the exercise of a majority of all voting
    power, all other shareholders may exercise appraisal rights. The
    fair value of the shares as determined for purposes of such
    appraisal rights may not be less than the highest price per
    share paid by the acquirer in the control share acquisition.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The control share acquisition statute does not apply to
    (a)&#160;shares acquired in a merger, consolidation or share
    exchange if the real estate investment trust is a party to the
    transaction or (b)&#160;acquisitions approved or exempted by the
    declaration of trust or bylaws of the real estate investment
    trust.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our bylaws contain a provision exempting from the control share
    acquisition statute any and all acquisitions by any person of
    our shares. There is no assurance that such provision will not
    be amended or eliminated at any time in the future.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Subtitle
    8</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Subtitle 8 of Title&#160;3 of the MGCL permits a Maryland real
    estate investment trust with a class of equity securities
    registered under the Exchange Act and at least three independent
    trustees to elect to be subject, by provision in its declaration
    of trust or bylaws or a resolution of its board of trustees and
    notwithstanding any contrary provision in the declaration of
    trust or bylaws, to any or all of five provisions:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    a classified board;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    a two-thirds vote requirement for removing a trustee;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    a requirement that the number of trustees be fixed only by vote
    of the trustees;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    a requirement that a vacancy on the board be filled only by the
    remaining trustees and for the remainder of the full term of the
    class of trustees in which the vacancy occurred; and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    a majority requirement for the calling of a special meeting of
    shareholders.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our declaration of trust provides that, at such time as we are
    eligible to make a Subtitle 8 election, we elect to be subject
    to the provision of Subtitle 8 that requires that vacancies on
    our board may be filled only by the remaining trustees and for
    the remainder of the full term of the trusteeship in which the
    vacancy occurred. Through provisions in our declaration of trust
    and bylaws unrelated to Subtitle 8, we already (1)&#160;require
    the affirmative vote of the holders of not less than two-thirds
    of all of the votes entitled to be cast on the matter for the
    removal of any trustee from the board, which removal will be
    allowed only for cause, (2)&#160;vest in the board the exclusive
    power to fix the number of trusteeships and (3)&#160;provide
    that special meetings of shareholders may only be called by our
    Chairman, President, Chief Executive Officer or the board of
    trustees.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Meetings
    of Shareholders</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to our declaration of trust and bylaws, a meeting of
    our shareholders for the purpose of the election of trustees and
    the transaction of any business will be held annually on a date
    and at the time and place set by our board of trustees. In
    addition, our Chairman, President, Chief Executive Officer or
    the board of trustees may call a special meeting of our
    shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Mergers;
    Extraordinary Transactions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the MRL, a Maryland real estate investment trust generally
    cannot merge with another entity unless advised by its board of
    trustees and approved by the affirmative vote of at least
    two-thirds of the votes
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    entitled to be cast on the matter unless a lesser percentage
    (but not less than a majority of all of the votes entitled to be
    cast on the matter) is set forth in the trust&#146;s declaration
    of trust. Our declaration of trust provides that these mergers
    may be approved by a majority of all of the votes entitled to be
    cast on the matter. Our declaration of trust also provides that
    we may sell or transfer all or substantially all of our assets
    if approved by our board of trustees and by the affirmative vote
    of a majority of all the votes entitled to be cast on the
    matter. However, many of our operating assets will be held by
    our subsidiaries, and these subsidiaries may be able to sell all
    or substantially all of their assets or merge with another
    entity without the approval of our shareholders.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Amendment
    to Our Declaration of Trust and Bylaws</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the MRL, a Maryland real estate investment trust generally
    cannot amend its declaration of trust unless advised by its
    board of trustees and approved by the affirmative vote of at
    least two-thirds of the votes entitled to be cast on the matter
    unless a different percentage (but not less than a majority of
    all of the votes entitled to be cast on the matter) is set forth
    in the trust&#146;s declaration of trust.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Except for amendments to the provisions of our declaration of
    trust related to the removal of trustees and the vote required
    to amend the provision regarding amendments to the removal
    provisions itself (each of which require the affirmative vote of
    at least two-thirds of all the votes entitled to be cast on the
    matter) and certain amendments described in our declaration of
    trust that require only approval by our board of trustees, our
    declaration of trust may be amended only with the approval of
    our board of trustees and the affirmative vote of at least a
    majority of all of the votes entitled to be cast on the matter.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our board of trustees has the exclusive power to adopt, alter or
    repeal any provision of our bylaws and to make new bylaws.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Our
    Termination</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our declaration of trust provides for us to have a perpetual
    existence. Our termination must be approved by a majority of our
    entire board of trustees and the affirmative vote of at least a
    majority of all of the votes entitled to be cast on the matter.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Advance
    Notice of Trustee Nominations and New Business</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our bylaws provide that, with respect to an annual meeting of
    shareholders, nominations of individuals for election to our
    board of trustees at an annual meeting and the proposal of
    business to be considered by shareholders may be made only
    (1)&#160;pursuant to our notice of the meeting, (2)&#160;by or
    at the direction of our board of trustees or (3)&#160;by a
    shareholder of record both at the time of giving notice and at
    the time of the annual meeting and who is entitled to vote at
    the meeting and has complied with the advance notice provisions
    set forth in our bylaws. Our bylaws currently require the
    shareholder generally to provide notice to the secretary
    containing the information required by our bylaws not less than
    120&#160;days nor more than 150&#160;days prior to the first
    anniversary of the date of our proxy statement for the preceding
    year&#146;s annual meeting.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    With respect to special meetings of shareholders, only the
    business specified in our notice of meeting may be brought
    before the meeting. Nominations of individuals for election to
    our board of trustees at a special meeting may be made only
    (1)&#160;by or at the direction of our board of trustees or
    (2)&#160;provided that our board of trustees has determined that
    trustees will be elected at such meeting, by a shareholder of
    record at the time of giving notice and who is entitled to vote
    at the meeting in the election of each individual so nominated
    and has complied with the advance notice provisions set forth in
    our bylaws. Such shareholder may nominate one or more
    individuals, as the case may be, for election as a trustee if
    the shareholder&#146;s notice containing the information
    required by our bylaws is delivered to the secretary not earlier
    than the
    120<SUP style="font-size: 85%; vertical-align: top">th</SUP> day

    prior to such special meeting and not later than 5:00&#160;p.m.,
    eastern time, on the later of (1)&#160;the
    90<SUP style="font-size: 85%; vertical-align: top">th</SUP> day

    prior to such special meeting or (2)&#160;the tenth day
    following the day on which public announcement is first made of
    the date of the special meeting and the proposed nominees of our
    board of trustees to be elected at the meeting.
</DIV>
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    <BR>
    79
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Anti-takeover
    Effect of Certain Provisions of Maryland Law and of Our
    Declaration of Trust and Bylaws</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the applicable exemption in our bylaws is repealed and the
    applicable resolution of our board of trustees is repealed, the
    control share acquisition provisions and the business
    combination provisions of the MGCL, respectively, as well as the
    provisions in our declaration of trust and bylaws, as
    applicable, on removal of trustees and the filling of trustee
    vacancies and the restrictions on ownership and transfer of
    shares of beneficial interest, together with the advance notice
    and shareholder-requested special meeting provisions of our
    bylaws, alone or in combination, could serve to delay, deter or
    prevent a transaction or a change in our control that might
    involve a premium price for holders of our common shares or
    otherwise be in their best interests.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Indemnification
    and Limitation of Trustees&#146; and Officers&#146;
    Liability</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our declaration of trust authorizes us, and our bylaws require
    us, to the maximum extent permitted by Maryland law, to
    indemnify (i)&#160;any present or former trustee or officer or
    (ii)&#160;any individual who, while serving as our trustee or
    officer and at our request, serves or has served as a trustee,
    director, officer, partner, member, manager, employee or agent
    of another real estate investment trust, corporation,
    partnership, limited liability company, joint venture, trust,
    employee benefit plan or any other enterprise, from and against
    any claim or liability to which such person may become subject
    or which such person may incur by reason of his or her service
    in such capacity or capacities, and to pay or reimburse his or
    her reasonable expenses in advance of final disposition of such
    a proceeding. Upon completion of this offering, we expect to
    enter into indemnification agreements with each of our trustees
    and executive officers that provide for indemnification to the
    maximum extent permitted by Maryland law and advancements by us
    of certain expenses and costs relating to claims, suits or
    proceedings arising from their service to us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Maryland law permits a Maryland real estate investment trust to
    include in its declaration of trust a provision limiting the
    liability of its trustees and officers to the real estate
    investment trust and its shareholders for money damages except
    for liability resulting from&#160;(a) actual receipt of an
    improper benefit or profit in money, property or services or (b)
    active or deliberate dishonesty established by a final judgment
    as being material to the cause of action. Our declaration of
    trust contains a provision which limits the liability of our
    trustees and officers to the maximum extent permitted by
    Maryland low.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">REIT
    Qualification</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our declaration of trust provides that our board of trustees may
    revoke or otherwise terminate our REIT election, without
    approval of our shareholders, if it determines that it is no
    longer in our best interest to continue to qualify as a REIT.
</DIV>
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    <BR>
    80
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<A name='116'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">OUR
    OPERATING PARTNERSHIP AND THE PARTNERSHIP AGREEMENT</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following summary of the terms of the agreement of limited
    partnership of our operating partnership does not purport to be
    complete and is subject to and qualified in its entirety by
    reference to the Agreement of Limited Partnership of Pebblebrook
    Hotel, L.P., a copy of which is an exhibit to the registration
    statement of which this prospectus is a part. See &#147;Where
    You Can Find More Information.&#148;
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Management</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are the sole general partner of our operating partnership, a
    Delaware limited partnership. We will conduct substantially all
    of our operations and make substantially all of our investments
    through the operating partnership. Pursuant to the partnership
    agreement, we will have full, exclusive and complete
    responsibility and discretion in the management and control of
    the operating partnership, including the ability to cause the
    operating partnership to enter into certain major transactions
    including acquisitions, dispositions, refinancings and selection
    of lessees, make distributions to partners, and to cause changes
    in the operating partnership&#146;s business activities.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Transferability
    of Interests</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may not voluntarily withdraw from the operating partnership
    or transfer or assign our interest in the operating partnership
    or engage in any merger, consolidation or other combination, or
    sale of all or substantially all of our assets in a transaction
    which results in a change of control of our company unless:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    we receive the consent of limited partners holding more than 50%
    of the partnership interests of the limited partners (other than
    those held by our company or its subsidiaries);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    as a result of such transaction, all limited partners (other
    than our company or its subsidiaries), will receive for each
    partnership unit an amount of cash, securities or other property
    equal in value to the greatest amount of cash, securities or
    other property paid in the transaction to a holder of one of our
    common shares, provided that if, in connection with the
    transaction, a purchase, tender or exchange offer shall have
    been made to and accepted by the holders of more than 50% of the
    outstanding common shares, each holder of partnership units
    (other than those held by our company or its subsidiaries) shall
    be given the option to exchange its partnership units for the
    greatest amount of cash, securities or other property that a
    limited partner would have received had it (A)&#160;exercised
    its redemption right (described below) and (B)&#160;sold,
    tendered or exchanged pursuant to the offer common shares
    received upon exercise of the redemption right immediately prior
    to the expiration of the offer; or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    we are the surviving entity in the transaction and either
    (A)&#160;our shareholders do not receive cash, securities or
    other property in the transaction or (B)&#160;all limited
    partners (other than our company or our subsidiaries) receive
    for each partnership unit an amount of cash, securities or other
    property having a value that is no less than the greatest amount
    of cash, securities or other property received in the
    transaction by our shareholders.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We also may merge with or into or consolidate with another
    entity if immediately after such merger or consolidation
    (i)&#160;substantially all of the assets of the successor or
    surviving entity, other than partnership units held by us, are
    contributed, directly or indirectly, to the partnership as a
    capital contribution in exchange for partnership units with a
    fair market value equal to the value of the assets so
    contributed as determined by the survivor in good faith and
    (ii)&#160;the survivor expressly agrees to assume all of our
    obligations under the partnership agreement and the partnership
    agreement shall be amended after any such merger or
    consolidation so as to arrive at a new method of calculating the
    amounts payable upon exercise of the redemption right that
    approximates the existing method for such calculation as closely
    as reasonably possible.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We also may (i)&#160;transfer all or any portion of our general
    partnership interest to (A)&#160;a wholly owned subsidiary or
    (B)&#160;a parent company, and following such transfer may
    withdraw as the general partner and (ii)&#160;engage in a
    transaction required by law or by the rules of any national
    securities exchange or OTC interdealer quotation system on which
    our common shares are listed.
</DIV>
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    <BR>
    81
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Capital
    Contribution</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will contribute, directly, to our operating partnership
    substantially all of the net proceeds of this offering and the
    concurrent private placement as our initial capital contribution
    in exchange for substantially all of the limited partnership
    interests in our operating partnership. The partnership
    agreement provides that if the operating partnership requires
    additional funds at any time in excess of funds available to the
    operating partnership from borrowing or capital contributions,
    we may borrow such funds from a financial institution or other
    lender and lend such funds to the operating partnership on the
    same terms and conditions as are applicable to our borrowing of
    such funds. Under the partnership agreement, we are obligated to
    contribute the net proceeds of any future offering of shares as
    additional capital to the operating partnership. If we
    contribute additional capital to the operating partnership, we
    will receive additional partnership units and our percentage
    interest will be increased on a proportionate basis based upon
    the amount of such additional capital contributions and the
    value of the operating partnership at the time of such
    contributions. Conversely, the percentage interests of the
    limited partners will be decreased on a proportionate basis in
    the event of additional capital contributions by us. In
    addition, if we contribute additional capital to the operating
    partnership, we will revalue the property of the operating
    partnership to its fair market value (as determined by us) and
    the capital accounts of the partners will be adjusted to reflect
    the manner in which the unrealized gain or loss inherent in such
    property (that has not been reflected in the capital accounts
    previously) would be allocated among the partners under the
    terms of the partnership agreement if there were a taxable
    disposition of such property for its fair market value (as
    determined by us) on the date of the revaluation. The operating
    partnership may issue preferred partnership interests, in
    connection with acquisitions of property or otherwise, which
    could have priority over common partnership interests with
    respect to distributions from the operating partnership,
    including the partnership interests we own as the general
    partner.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Redemption&#160;Rights</FONT></B>
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the partnership agreement, any future limited
    partners, other than us, will receive redemption rights, which
    will enable them to cause the operating partnership to redeem
    their limited partnership interests in exchange for cash or, at
    our option, common shares on a
    <FONT style="white-space: nowrap">one-for-one</FONT>
    basis. The cash redemption amount per unit is based on the
    market price of our common shares at the time of redemption. The
    number of common shares issuable upon redemption of limited
    partnership interests held by limited partners may be adjusted
    upon the occurrence of certain events such as share dividends,
    share subdivisions or combinations. We expect to fund any cash
    redemptions out of available cash or borrowings. Notwithstanding
    the foregoing, a limited partner will not be entitled to
    exercise its redemption rights if the delivery of common shares
    to the redeeming limited partner would:
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    result in any person owning, directly or indirectly, common
    shares in excess of the share ownership limit in our declaration
    of trust;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    result in our common shares being owned by fewer than
    100&#160;persons (determined without reference to any rules of
    attribution);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    result in our being &#147;closely held&#148; within the meaning
    of Section&#160;856(h) of the Code;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    cause us to own, actually or constructively, 10% or more of the
    ownership interests in a tenant (other than a TRS) of ours, the
    operating partnership&#146;s or a subsidiary partnership&#146;s
    real property, within the meaning of Section&#160;856(d)(2)(B)
    of the Code;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    cause us to fail to qualify as a REIT under the Code, including,
    but not limited to, as a result of any hotel management company
    failing to qualify as an eligible independent contractor under
    the Code; or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    cause the acquisition of common shares by such redeeming limited
    partner to be &#147;integrated&#148; with any other distribution
    of common shares for purposes of complying with the registration
    provisions of the Securities Act.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may, in our sole and absolute discretion, waive any of these
    restrictions.
</DIV>
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    <BR>
    82
</DIV><!-- END PAGE WIDTH -->
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The partnership agreement will require that the operating
    partnership be operated in a manner that enables us to satisfy
    the requirements for being classified as a REIT, to avoid any
    federal income or excise tax liability imposed by the Code
    (other than any federal income tax liability associated with our
    retained capital gains) and to ensure that the partnership will
    not be classified as a &#147;publicly traded partnership&#148;
    taxable as a corporation under Section&#160;7704 of the Code.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition to the administrative and operating costs and
    expenses incurred by the operating partnership, the operating
    partnership generally will pay all of our administrative costs
    and expenses, including:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    all expenses relating to our continuity of existence and our
    subsidiaries&#146; operations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    all expenses relating to offerings and registration of
    securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    all expenses associated with any repurchase by us of any
    securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    all expenses associated with the preparation and filing of any
    of our periodic or other reports and communications under
    federal, state or local laws or regulations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    all expenses associated with our compliance with laws, rules and
    regulations promulgated by any regulatory body;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    all expenses associated with any 401(k) plan, incentive plan,
    bonus plan or other plan providing compensation to our employees;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    all expenses incurred by us relating to any issuance or
    redemption of partnership interests; and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    all of our other operating or administrative costs incurred in
    the ordinary course of business on behalf of the operating
    partnership.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These expenses, however, do not include any of our
    administrative and operating costs and expenses incurred that
    are attributable to hotel properties that are owned by us
    directly rather than by the operating partnership or its
    subsidiaries.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Fiduciary
    Responsibilities</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our trustees and officers have duties under applicable Maryland
    law to manage us in a manner consistent with the best interests
    of our shareholders. At the same time, we, as the general
    partner of our operating partnership, have fiduciary duties to
    manage our operating partnership in a manner beneficial to our
    operating partnership and its partners. Our duties, as general
    partner to our operating partnership and its limited partners,
    therefore, may come into conflict with the duties of our
    trustees and officers to our shareholders. We will be under no
    obligation to give priority to the separate interests of the
    limited partners of our operating partnership or our
    shareholders in deciding whether to cause the operating
    partnership to take or decline to take any actions.
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The limited partners of our operating partnership expressly will
    acknowledge that as the general partner of our operating
    partnership, we are acting for the benefit of the operating
    partnership, the limited partners and our shareholders
    collectively.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Distributions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The partnership agreement will provide that the operating
    partnership will distribute cash from operations (including net
    sale or refinancing proceeds, but excluding net proceeds from
    the sale of the operating partnership&#146;s property in
    connection with the liquidation of the operating partnership) at
    such time and in such amounts as determined by us in our sole
    discretion, to us and the limited partners in accordance with
    their respective percentage interests in the operating
    partnership.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon liquidation of the operating partnership, after payment of,
    or adequate provision for, debts and obligations of the
    partnership, including any partner loans, any remaining assets
    of the partnership will be
</DIV>
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    <BR>
    83
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    distributed to us and the limited partners with positive capital
    accounts in accordance with their respective positive capital
    account balances.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">LTIP
    Units</FONT></B>
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Upon completion of this offering, we will cause our operating
    partnership to grant an aggregate of 881,750 LTIP units to
    Messrs.&#160;Bortz, Martz and Dittamo. If the size of this
    offering changes, the aggregate number of LTIP units to be
    granted to Messrs.&#160;Bortz, Martz and Dittamo will change so
    as to equal&#160;5% of the common shares issued in this offering
    (excluding any shares issued pursuant to the underwriters&#146;
    overallotment option) and in the concurrent private placement.
    These LTIP&#160;units will vest ratably on each of the first
    five anniversaries of the date of grant. In general, LTIP units
    are a class of partnership units in our operating partnership
    and will receive the same quarterly
    <FONT style="white-space: nowrap">per-unit</FONT>
    profit distributions as the other outstanding units in our
    operating partnership. Initially, LTIP units will not have full
    parity with other outstanding units with respect to liquidating
    distributions. We expect that under the terms of the LTIP units,
    our operating partnership will revalue its assets upon the
    occurrence of certain specified events, and any increase in
    valuation from the time of grant until such event will be
    allocated first to the LTIP unit holders to equalize the capital
    accounts of such holders with the capital accounts of holders of
    our other outstanding partnership units. Upon equalization of
    the capital accounts of the LTIP unit holders with the capital
    accounts of the other holders of our operating partnership
    units, the LTIP units will achieve full parity with our other
    operating partnership units for all purposes, including with
    respect to liquidating distributions. If such parity is reached,
    vested LTIP units may be converted into an equal number of
    operating partnership units at any time, and thereafter enjoy
    all the rights of such units, including redemption rights.
    However, there are circumstances under which such parity would
    not be reached. Until and unless such parity is reached, the
    value for a given number of vested LTIP units will be less than
    the value of an equal number of our common shares.
</DIV>


<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Allocations</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Profits and losses of the partnership (including depreciation
    and amortization deductions) for each fiscal year generally will
    be allocated to us and the other limited partners in accordance
    with the respective percentage interests in the partnership. All
    of the foregoing allocations are subject to compliance with the
    provisions of Sections&#160;704(b) and 704(c) of the Code and
    Treasury regulations promulgated thereunder. To the extent
    Treasury regulations promulgated pursuant to Section&#160;704(c)
    of the Code permit, we, as the general partner, shall have the
    authority to elect the method to be used by the operating
    partnership for allocating items with respect to contributed
    property acquired in connection with this offering for which
    fair market value differs from the adjusted tax basis at the
    time of contribution, and such election shall be binding on all
    partners. Upon the occurrence of certain specified events, our
    operating partnership will revalue its assets and any net
    increase in valuation will be allocated first to the LTIP units
    to equalize the capital accounts of such holders with the
    capital accounts of the holders of the other outstanding units
    in our operating partnership.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Term</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The operating partnership will continue indefinitely, or until
    sooner dissolved upon:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our bankruptcy, dissolution, removal or withdrawal (unless the
    limited partners elect to continue the partnership);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the passage of 90&#160;days after the sale or other disposition
    of all or substantially all of the assets of the partnership;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the redemption of all partnership units (other than those held
    by us, if any) unless we decide to continue the partnership by
    the admission of one or more general partners; or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    an election by us in our capacity as the general partner.
</TD>
</TR>

</TABLE>
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    <BR>
    84
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Tax
    Matters</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our partnership agreement will provide that we, as the sole
    general partner of the operating partnership, will be the tax
    matters partner of the operating partnership and, as such, will
    have authority to handle tax audits and to make tax elections
    under the Code on behalf of the operating partnership.
</DIV>
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    <BR>
    85
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<A name='117'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">MATERIAL
    FEDERAL INCOME TAX CONSIDERATIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This section summarizes the material federal income tax
    considerations that you, as a shareholder, may consider
    relevant. Hunton&#160;&#038; Williams LLP has acted as our
    counsel, has reviewed this summary, and is of the opinion that
    the discussion contained herein is accurate in all material
    respects. Because this section is a summary, it does not address
    all aspects of taxation that may be relevant to particular
    shareholders in light of their personal investment or tax
    circumstances, or to certain types of shareholders that are
    subject to special treatment under the federal income tax laws,
    such as:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    insurance companies;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    tax-exempt organizations (except to the limited extent discussed
    in &#147;&#151;&#160;Taxation of Tax-Exempt Shareholders&#148;
    below);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    financial institutions or broker-dealers;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    <FONT style="white-space: nowrap">non-U.S.&#160;individuals</FONT>
    and foreign corporations (except to the limited extent discussed
    in &#147;&#151;&#160;Taxation of
    <FONT style="white-space: nowrap">Non-U.S.&#160;Shareholders&#148;</FONT>
    below);
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    U.S.&#160;expatriates;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    persons who
    <FONT style="white-space: nowrap">mark-to-market</FONT>
    our common shares;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    subchapter S&#160;corporations;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    U.S.&#160;shareholders (as defined below) whose functional
    currency is not the U.S.&#160;dollar;
</TD>
</TR>

</TABLE>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    regulated investment companies and REITs;
</TD>
</TR>

</TABLE>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    trusts and estates;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    holders who receive our common shares through the exercise of
    employee share options or otherwise as compensation;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    persons holding our common shares as part of a
    &#147;straddle,&#148; &#147;hedge,&#148; &#147;conversion
    transaction,&#148; &#147;synthetic security&#148; or other
    integrated investment;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    persons subject to the alternative minimum tax provisions of the
    Code;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    persons holding our common shares through a partnership or
    similar pass-through entity; and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    persons holding a 10% or more (by vote or value) beneficial
    interest in our shares of beneficial interest.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This summary assumes that shareholders hold shares as capital
    assets for federal income tax purposes, which generally means
    property held for investment.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The statements in this section are based on the current federal
    income tax laws, are for general information purposes only and
    are not tax advice. We cannot assure you that new laws,
    interpretations of law, or court decisions, any of which may
    take effect retroactively, will not cause any statement in this
    section to be inaccurate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    WE URGE YOU TO CONSULT YOUR OWN TAX ADVISOR REGARDING THE
    SPECIFIC TAX CONSEQUENCES TO YOU OF THE PURCHASE, OWNERSHIP AND
    SALE OF OUR COMMON SHARES&#160;AND OF OUR ELECTION TO BE TAXED
    AS A REIT. SPECIFICALLY, YOU ARE URGED TO CONSULT YOUR OWN TAX
    ADVISOR REGARDING THE FEDERAL, STATE, LOCAL, FOREIGN, AND OTHER
    TAX CONSEQUENCES OF SUCH PURCHASE, OWNERSHIP, SALE AND ELECTION,
    AND REGARDING POTENTIAL CHANGES IN APPLICABLE TAX LAWS.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Taxation
    of Our Company</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We currently have in effect an election to be taxed as a
    pass-through entity under subchapter S of the Code, but intend
    to revoke our S election on the business day prior to the
    closing date of this offering. We
</DIV>
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    <BR>
    86
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    intend to elect to be taxed as a REIT for federal income tax
    purposes commencing with our short taxable year beginning on the
    business day prior to the closing of this offering and ending
    December&#160;31, 2009. We believe that, commencing with such
    short taxable year, we will be organized and will operate in
    such a manner as to qualify for taxation as a REIT under the
    federal income tax laws, and we intend to continue to operate in
    such a manner, but no assurances can be given that we will
    operate in a manner so as to qualify or remain qualified as a
    REIT. This section discusses the laws governing the federal
    income tax treatment of a REIT and its shareholders. These laws
    are highly technical and complex.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with this offering, Hunton&#160;&#038; Williams
    LLP is rendering an opinion that, commencing with our short
    taxable year beginning on the business day prior to the closing
    of this offering and ending on December&#160;31, 2009, we will
    be organized in conformity with the requirements for
    qualification and taxation as a REIT under the federal income
    tax laws, and our proposed method of operations will enable us
    to satisfy the requirements for qualification and taxation as a
    REIT under the federal income tax laws for our taxable year
    ending December&#160;31, 2009 and thereafter. Investors should
    be aware that Hunton&#160;&#038; Williams LLP&#146;s opinion is
    based upon customary assumptions, is conditioned upon certain
    representations made by us as to factual matters, including
    representations regarding the nature of our assets and the
    conduct of our business, is not binding upon the IRS, or any
    court, and speaks as of the date issued. In addition,
    Hunton&#160;&#038; Williams LLP&#146;s opinion is based on
    existing federal income tax law governing qualification as a
    REIT, which is subject to change either prospectively or
    retroactively. Moreover, our qualification and taxation as a
    REIT depend upon our ability to meet on a continuing basis,
    through actual annual operating results, certain qualification
    tests set forth in the federal tax laws. Those qualification
    tests involve the percentage of income that we earn from
    specified sources, the percentage of our assets that falls
    within specified categories, the diversity of ownership of our
    shares of beneficial interest, and the percentage of our
    earnings that we distribute. Hunton&#160;&#038; Williams LLP
    will not review our compliance with those tests on a continuing
    basis. Accordingly, no assurance can be given that our actual
    results of operations for any particular taxable year will
    satisfy such requirements. For a discussion of the tax
    consequences of our failure to qualify as a REIT, see
    &#147;&#151;&#160;Failure to Qualify.&#148;
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we qualify as a REIT, we generally will not be subject to
    federal income tax on the taxable income that we distribute to
    our shareholders. The benefit of that tax treatment is that it
    avoids the &#147;double taxation,&#148; or taxation at both the
    corporate and shareholder levels, that generally results from
    owning stock in a corporation. However, we will be subject to
    federal tax in the following circumstances:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    We will pay federal income tax on any taxable income, including
    undistributed net capital gain, that we do not distribute to
    shareholders during, or within a specified time period after,
    the calendar year in which the income is earned.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    We may be subject to the &#147;alternative minimum tax&#148; on
    any items of tax preference including any deductions of net
    operating losses.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    We will pay income tax at the highest corporate rate on:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="13%"></TD>
    <TD width="5%"></TD>
    <TD width="82%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    net income from the sale or other disposition of property
    acquired through foreclosure (&#147;foreclosure property&#148;)
    that we hold primarily for sale to customers in the ordinary
    course of business, and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    other non-qualifying income from foreclosure property.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    We will pay a 100% tax on net income from sales or other
    dispositions of property, other than foreclosure property, that
    we hold primarily for sale to customers in the ordinary course
    of business.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    If we fail to satisfy one or both of the 75% gross income test
    or the 95% gross income test, as described below under
    &#147;&#151;&#160;Gross Income Tests,&#148; and nonetheless
    continue to qualify as a REIT because we meet other
    requirements, we will pay a 100% tax on:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="13%"></TD>
    <TD width="5%"></TD>
    <TD width="82%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the gross income attributable to the greater of the amount by
    which we fail the 75% gross income test or the 95% gross income
    test, in either case, multiplied by
</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    87
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="13%"></TD>
    <TD width="5%"></TD>
    <TD width="82%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    a fraction intended to reflect our profitability.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    If we fail to distribute during a calendar year at least the sum
    of (1)&#160;85% of our REIT ordinary income for the year,
    (2)&#160;95% of our REIT capital gain net income for the year,
    and (3)&#160;any undistributed taxable income required to be
    distributed from earlier periods, we will pay a 4% nondeductible
    excise tax on the excess of the required distribution over the
    amount we actually distributed.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    We may elect to retain and pay income tax on our net long-term
    capital gain. In that case, a U.S.&#160;shareholder would be
    taxed on its proportionate share of our undistributed long-term
    capital gain (to the extent that we made a timely designation of
    such gain to the shareholders) and would receive a credit or
    refund for its proportionate share of the tax we paid.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    We will be subject to a 100% excise tax on transactions with a
    TRS that are not conducted on an arm&#146;s-length basis.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    In the event of a failure of any of the asset tests, other than
    a <I>de minimis</I> failure of the 5% asset test or the 10% vote
    or value test, as described below under &#147;&#151;&#160;Asset
    Tests,&#148; as long as the failure was due to reasonable cause
    and not to willful neglect, we file a description of each asset
    that caused such failure with the IRS, and we dispose of the
    assets or otherwise comply with the asset tests within six
    months after the last day of the quarter in which we identify
    such failure, we will pay a tax equal to the greater of $50,000
    or the highest federal income tax rate then applicable to
    U.S.&#160;corporations (currently 35%) on the net income from
    the nonqualifying assets during the period in which we failed to
    satisfy the asset tests.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    In the event we fail to satisfy one or more requirements for
    REIT qualification, other than the gross income tests and the
    asset tests, and such failure is due to reasonable cause and not
    to willful neglect, we will be required to pay a penalty of
    $50,000 for each such failure.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    If we acquire any asset from a C corporation, or a corporation
    that generally is subject to full corporate-level tax, in a
    merger or other transaction in which we acquire a basis in the
    asset that is determined by reference either to the C
    corporation&#146;s basis in the asset or to another asset, we
    will pay tax at the highest regular corporate rate applicable if
    we recognize gain on the sale or disposition of the asset during
    the <FONT style="white-space: nowrap">10-year</FONT>
    period after we acquire the asset provided no election is made
    for the transaction to be taxable on a current basis. The amount
    of gain on which we will pay tax is the lesser of:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="13%"></TD>
    <TD width="5%"></TD>
    <TD width="82%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the amount of gain that we recognize at the time of the sale or
    disposition, and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the amount of gain that we would have recognized if we had sold
    the asset at the time we acquired it.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    We may be required to pay monetary penalties to the IRS in
    certain circumstances, including if we fail to meet
    record-keeping requirements intended to monitor our compliance
    with rules relating to the composition of a REIT&#146;s
    shareholders, as described below in
    &#147;&#151;&#160;Recordkeeping Requirements.&#148;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    The earnings of our lower-tier entities that are subchapter C
    corporations, including TRSs, will be subject to federal
    corporate income tax.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, notwithstanding our status as a REIT, we may also
    have to pay certain state and local income taxes, because not
    all states and localities treat REITs in the same manner that
    they are treated for federal income tax purposes. Moreover, as
    further described below, TRSs will be subject to federal, state
    and local corporate income tax on their taxable income.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Requirements
    for Qualification</FONT></B>
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A REIT is a corporation, trust, or association that meets each
    of the following requirements:
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="15%"></TD>
    <TD width="3%"></TD>
    <TD width="82%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    1.&#160;
</TD>
    <TD align="left">
    It is managed by one or more directors or trustees.
</TD>
</TR>

</TABLE>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    88
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="15%"></TD>
    <TD width="3%"></TD>
    <TD width="82%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    2.&#160;
</TD>
    <TD align="left">
    Its beneficial ownership is evidenced by transferable shares, or
    by transferable certificates of beneficial interest.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    3.&#160;
</TD>
    <TD align="left">
    It would be taxable as a domestic corporation, but for the REIT
    provisions of the federal income tax laws.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    4.&#160;
</TD>
    <TD align="left">
    It is neither a financial institution nor an insurance company
    subject to special provisions of the federal income tax laws.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    5.&#160;
</TD>
    <TD align="left">
    At least 100&#160;persons are beneficial owners of its shares or
    ownership certificates.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    6.&#160;
</TD>
    <TD align="left">
    Not more than 50% in value of its outstanding shares or
    ownership certificates is owned, directly or indirectly, by five
    or fewer individuals, which the Code defines to include certain
    entities, during the last half of any taxable year.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    7.&#160;
</TD>
    <TD align="left">
    It elects to be a REIT, or has made such election for a previous
    taxable year, and satisfies all relevant filing and other
    administrative requirements established by the IRS that must be
    met to elect and maintain REIT status.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    8.&#160;
</TD>
    <TD align="left">
    It meets certain other qualification tests, described below,
    regarding the nature of its income and assets and the amount of
    its distributions to shareholders.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    9.&#160;
</TD>
    <TD align="left">
    It uses a calendar year for federal income tax purposes and
    complies with the recordkeeping requirements of the federal
    income tax laws.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We must meet requirements 1 through 4, 7, 8 and 9 during our
    entire taxable year and must meet requirement 5 during at least
    335&#160;days of a taxable year of 12&#160;months, or during a
    proportionate part of a taxable year of less than
    12&#160;months. Requirements 5 and 6 will apply to us beginning
    with our 2010 taxable year. If we comply with all the
    requirements for ascertaining the ownership of our outstanding
    shares in a taxable year and have no reason to know that we
    violated requirement 6, we will be deemed to have satisfied
    requirement 6 for that taxable year. For purposes of determining
    share ownership under requirement 6, an &#147;individual&#148;
    generally includes a supplemental unemployment compensation
    benefits plan, a private foundation, or a portion of a trust
    permanently set aside or used exclusively for charitable
    purposes. An &#147;individual,&#148; however, generally does not
    include a trust that is a qualified employee pension or profit
    sharing trust under the federal income tax laws, and
    beneficiaries of such a trust will be treated as holding our
    shares in proportion to their actuarial interests in the trust
    for purposes of requirement 6.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our declaration of trust provides restrictions regarding the
    transfer and ownership of our shares of beneficial interest. See
    &#147;Description of Shares of Beneficial Interest&#160;&#151;
    Restrictions on Ownership and Transfer.&#148; We believe that we
    will issue sufficient shares of beneficial interest with
    sufficient diversity of ownership to allow us to satisfy
    requirements 5 and 6 above. If we do not issue common shares to
    at least 100&#160;shareholders by January 2010 pursuant to this
    or subsequent offerings, we anticipate that we would satisfy
    requirement 5 by issuing preferred shares with a nominal value
    and a low liquidation preference to a limited number of
    investors. The restrictions in our declaration of trust are
    intended (among other things) to assist us in continuing to
    satisfy requirements 5 and 6 described above. These
    restrictions, however, may not ensure that we will, in all
    cases, be able to satisfy such share ownership requirements. If
    we fail to satisfy these share ownership requirements, our
    qualification as a REIT may terminate.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, we must satisfy all relevant filing and other
    administrative requirements established by the IRS that must be
    met to elect and maintain REIT status and comply with the
    record-keeping requirements of the Code and regulations
    promulgated thereunder.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Qualified REIT Subsidiaries.</I>&#160;&#160;A corporation
    that is a &#147;qualified REIT subsidiary&#148; is not treated
    as a corporation separate from its parent REIT. All assets,
    liabilities, and items of income, deduction, and credit of a
    &#147;qualified REIT subsidiary&#148; are treated as assets,
    liabilities, and items of income, deduction, and credit of the
    REIT. A &#147;qualified REIT subsidiary&#148; is a corporation,
    other than a TRS, all of the stock of which is owned by the
    REIT. Thus, in applying the requirements described herein, any
    &#147;qualified REIT subsidiary&#148; that we
</DIV>
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    <BR>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    own will be ignored, and all assets, liabilities, and items of
    income, deduction, and credit of such subsidiary will be treated
    as our assets, liabilities, and items of income, deduction, and
    credit.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Other Disregarded Entities and
    Partnerships.</I>&#160;&#160;An unincorporated domestic entity,
    such as a partnership or limited liability company that has a
    single owner, generally is not treated as an entity separate
    from its parent for federal income tax purposes. An
    unincorporated domestic entity with two or more owners is
    generally treated as a partnership for federal income tax
    purposes. In the case of a REIT that is a partner in a
    partnership that has other partners, the REIT is treated as
    owning its proportionate share of the assets of the partnership
    and as earning its allocable share of the gross income of the
    partnership for purposes of the applicable REIT qualification
    tests. Our proportionate share for purposes of the 10% value
    test (see &#147;&#151;&#160;Asset Tests&#148;) will be based on
    our proportionate interest in the equity interests and certain
    debt securities issued by the partnership. For all of the other
    asset and income tests, our proportionate share will be based on
    our proportionate interest in the capital interests in the
    partnership. Our proportionate share of the assets, liabilities,
    and items of income of any partnership, joint venture, or
    limited liability company that is treated as a partnership for
    federal income tax purposes in which we acquire an equity
    interest, directly or indirectly, will be treated as our assets
    and gross income for purposes of applying the various REIT
    qualification requirements.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Taxable REIT Subsidiaries.</I>&#160;&#160;A REIT may own up
    to 100% of the capital stock of one or more TRSs. A TRS is a
    fully taxable corporation that may earn income that would not be
    qualifying income if earned directly by the parent REIT. The
    subsidiary and the REIT must jointly elect to treat the
    subsidiary as a TRS. A corporation of which a TRS directly or
    indirectly owns more than 35% of the voting power or value of
    the stock will automatically be treated as a TRS. However, an
    entity will not qualify as a TRS if it directly or indirectly
    operates or manages a lodging or health care facility or,
    generally, provides to another person under a franchise,
    license, or otherwise, rights to any brand name under which any
    lodging facility or health care facility is operated, unless
    such rights are provided to an &#147;eligible independent
    contractor&#148; (as defined below under &#147;&#151;&#160;Gross
    Income Tests&#160;&#151; Rents from Real Property&#148;) to
    operate or manage a lodging facility or health care facility and
    such lodging facility or health care facility is either owned by
    the TRS or leased to the TRS by its parent REIT. Additionally, a
    TRS that employs individuals working at a qualified lodging
    facility outside the United&#160;States will not be considered
    to operate or manage a qualified lodging facility as long as an
    &#147;eligible independent contractor&#148; is responsible for
    the daily supervision and direction of such individuals on
    behalf of the TRS pursuant to a management contract or similar
    service contract.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are not treated as holding the assets of a TRS or as
    receiving any income that the subsidiary earns. Rather, the
    stock issued by a TRS to us is an asset in our hands, and we
    treat the distributions paid to us from such taxable subsidiary,
    if any, as income. This treatment can affect our compliance with
    the gross income and asset tests. Because we do not include the
    assets and income of TRSs in determining our compliance with the
    REIT requirements, we may use such entities to undertake
    indirectly activities that the REIT rules might otherwise
    preclude us from doing directly or through pass-through
    subsidiaries. Overall, no more than 25% of the value of a
    REIT&#146;s assets may consist of stock or securities of one or
    more TRSs.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A TRS will pay income tax at regular corporate rates on any
    income that it earns. In addition, the TRS rules limit the
    deductibility of interest paid or accrued by a TRS to its parent
    REIT to assure that the TRS is subject to an appropriate level
    of corporate taxation. Further, the rules impose a 100% excise
    tax on transactions between a TRS and its parent REIT or the
    REIT&#146;s tenants that are not conducted on an
    arm&#146;s-length basis. We intend to form several TRSs which
    will be the lessees of our hotel properties. See
    &#147;&#151;&#160;Taxable REIT Subsidiaries.&#148;
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Gross
    Income Tests</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We must satisfy two gross income tests annually to maintain our
    qualification as a REIT. First, at least 75% of our gross income
    for each taxable year must consist of defined types of income
    that we derive, directly or indirectly, from investments
    relating to real property or mortgages on real property or
    qualified
</DIV>
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    <BR>
    90
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    temporary investment income. Qualifying income for purposes of
    that 75% gross income test generally includes:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    rents from real property;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    interest on debt secured by mortgages on real property, or on
    interests in real property;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    dividends or other distributions on, and gain from the sale of,
    shares in other REITs;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    gain from the sale of real estate assets; and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    income derived from the temporary investment of new capital that
    is attributable to the issuance of our shares of beneficial
    interest or a public offering of our debt with a maturity date
    of at least five years and that we receive during the one-year
    period beginning on the date on which we received such new
    capital.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Second, in general, at least 95% of our gross income for each
    taxable year must consist of income that is qualifying income
    for purposes of the 75% gross income test, other types of
    interest and dividends, gain from the sale or disposition of
    shares or securities, or any combination of these. Gross income
    from our sale of property that we hold primarily for sale to
    customers in the ordinary course of business is excluded from
    both the numerator and the denominator in both gross income
    tests. In addition, income and gain from &#147;hedging
    transactions&#148; that we enter into to hedge indebtedness
    incurred or to be incurred to acquire or carry real estate
    assets and that are clearly and timely identified as such will
    be excluded from both the numerator and the denominator for
    purposes of the 75% and 95% gross income tests. In addition,
    certain foreign currency gains will be excluded from gross
    income for purposes of one or both of the gross income tests.
    See &#147;&#151;&#160;Foreign Currency Gain&#148; below. The
    following paragraphs discuss the specific application of the
    gross income tests to us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Rents from Real Property.</I>&#160;&#160;Rent that we receive
    from our real property will qualify as &#147;rents from real
    property,&#148; which is qualifying income for purposes of the
    75% and 95% gross income tests, only if the following conditions
    are met:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    First, the rent must not be based, in whole or in part, on the
    income or profits of any person, but may be based on a fixed
    percentage or percentages of receipts or sales.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    Second, neither we nor a direct or indirect owner of 10% or more
    of our shares of beneficial interest may own, actually or
    constructively, 10% or more of a tenant from whom we receive
    rent, other than a TRS. If the tenant is a TRS, such TRS may not
    directly or indirectly operate or manage the related property.
    Instead, the property must be operated on behalf of the TRS by a
    person who qualifies as an &#147;independent contractor&#148;
    and who is, or is related to a person who is, actively engaged
    in the trade or business of operating lodging facilities for any
    person unrelated to us and the TRS. See
    &#147;&#151;&#160;Taxable REIT Subsidiaries.&#148;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    Third, if the rent attributable to personal property leased in
    connection with a lease of real property is 15% or less of the
    total rent received under the lease, then the rent attributable
    to personal property will qualify as rents from real property.
    However, if the 15% threshold is exceeded, the rent attributable
    to personal property will not qualify as rents from real
    property.
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    Fourth, we generally must not operate or manage our real
    property or furnish or render services to our tenants, other
    than through an &#147;independent contractor&#148; who is
    adequately compensated and from whom we do not derive revenue.
    However, we need not provide services through an
    &#147;independent contractor,&#148; but instead may provide
    services directly to our tenants, if the services are
    &#147;usually or customarily rendered&#148; in connection with
    the rental of space for occupancy only and are not considered to
    be provided for the tenants&#146; convenience. In addition, we
    may provide a minimal amount of &#147;noncustomary&#148;
    services to the tenants of a property, other than through an
    independent contractor, as long as our income from the services
    (valued at not less than 150% of our direct cost of performing
    such services) does not exceed 1% of our income from the related
    property. Furthermore, we may own up to 100% of the stock of a
    TRS which may
</TD>
</TR>
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    <BR>
    91
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<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>
</TD>
    <TD align="left">
    provide customary and noncustomary services to our tenants
    without tainting our rental income for the related properties.
    See &#147;&#151;&#160;Taxable REIT Subsidiaries.&#148;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our TRS lessees will lease from our operating partnership and
    its subsidiaries the land, buildings, improvements, furnishings
    and equipment comprising our hotel properties. In order for the
    rent paid under the leases to constitute &#147;rents from real
    property,&#148; the leases must be respected as true leases for
    federal income tax purposes and not treated as service
    contracts, joint ventures or some other type of arrangement. The
    determination of whether our leases are true leases depends on
    an analysis of all the surrounding facts and circumstances. In
    making such a determination, courts have considered a variety of
    factors, including the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the intent of the parties;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the form of the agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the degree of control over the property that is retained by the
    property owner (for example, whether the lessee has substantial
    control over the operation of the property or whether the lessee
    was required simply to use its best efforts to perform its
    obligations under the agreement); and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the extent to which the property owner retains the risk of loss
    with respect to the property (for example, whether the lessee
    bears the risk of increases in operating expenses or the risk of
    damage to the property) or the potential for economic gain with
    respect to the property.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In addition, the federal income tax law provides that a contract
    that purports to be a service contract or a partnership
    agreement is treated instead as a lease of property if the
    contract is properly treated as such, taking into account all
    relevant factors. Since the determination of whether a service
    contract should be treated as a lease is inherently factual, the
    presence or absence of any single factor may not be dispositive
    in every case.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We currently intend to structure our leases so that they qualify
    as true leases for federal income tax purposes. For example,
    with respect to each lease, we generally expect that:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our operating partnership and the lessee will intend for their
    relationship to be that of a lessor and lessee, and such
    relationship will be documented by a lease agreement;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the lessee will have the right to exclusive possession and use
    and quiet enjoyment of the hotels covered by the lease during
    the term of the lease;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the lessee will bear the cost of, and will be responsible for,
    <FONT style="white-space: nowrap">day-to-day</FONT>
    maintenance and repair of the hotels other than the cost of
    certain capital expenditures, and will dictate through hotel
    managers that are eligible independent contractors, who will
    work for the lessee during the terms of the lease, and how the
    hotels will be operated and maintained;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the lessee will bear all of the costs and expenses of operating
    the hotels, including the cost of any inventory used in their
    operation, during the term of the lease, other than real estate
    and personal property taxes and the cost of certain furniture,
    fixtures and equipment, and certain capital expenditures;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the lessee will benefit from any savings and will bear the
    burdens of any increases in the costs of operating the hotels
    during the term of the lease;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    in the event of damage or destruction to a hotel, the lessee
    will be at economic risk because it will bear the economic
    burden of the loss in income from operation of the hotels
    subject to the right, in certain circumstances, to terminate the
    lease if the lessor does not restore the hotel to its prior
    condition;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the lessee will generally indemnify the lessor against all
    liabilities imposed on the lessor during the term of the lease
    by reason of (A)&#160;injury to persons or damage to property
    occurring at the hotels or (B)&#160;the lessee&#146;s use,
    management, maintenance or repair of the hotels;
</TD>
</TR>

</TABLE>
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    <TD width="87%"></TD>
</TR>

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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
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    <TD align="left">
    the lessee will be obligated to pay, at a minimum, substantial
    base rent for the period of use of the hotels under the lease;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
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    <TD align="left">
    the lessee will stand to incur substantial losses or reap
    substantial gains depending on how successfully it, through the
    hotel managers, who work for the lessees during the terms of the
    leases, operates the hotels;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    we expect that each lease that we enter into, at the time we
    enter into it (or at any time that any such lease is
    subsequently renewed or extended) will enable the tenant to
    derive a meaningful profit, after expenses and taking into
    account the risks associated with the lease, from the operation
    of the hotels during the term of its leases; and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    upon termination of each lease, the applicable hotel will be
    expected to have a substantial remaining useful life and
    substantial remaining fair market value.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Investors should be aware that there are no controlling Treasury
    regulations, published rulings or judicial decisions involving
    leases with terms substantially the same as our leases that
    discuss whether such leases constitute true leases for federal
    income tax purposes. If our leases are characterized as service
    contracts or partnership agreements, rather than as true leases,
    part or all of the payments that our operating partnership and
    its subsidiaries receive from the TRS lessees may not be
    considered rent or may not otherwise satisfy the various
    requirements for qualification as &#147;rents from real
    property.&#148; In that case, we likely would not be able to
    satisfy either the 75% or 95% gross income test and, as a
    result, would lose our REIT status unless we qualify for relief,
    as described below under &#147;&#151;&#160;Failure to Satisfy
    Gross Income Tests.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As described above, in order for the rent that we receive to
    constitute &#147;rents from real property,&#148; several other
    requirements must be satisfied. One requirement is that
    percentage rent must not be based in whole or in part on the
    income or profits of any person. Percentage rent, however, will
    qualify as &#147;rents from real property&#148; if it is based
    on percentages of receipts or sales and the percentages:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

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    <TD width="7%"></TD>
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    <TD width="87%"></TD>
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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    are fixed at the time the percentage leases are entered into;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    are not renegotiated during the term of the percentage leases in
    a manner that has the effect of basing percentage rent on income
    or profits; and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


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    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    conform with normal business practice.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    More generally, percentage rent will not qualify as &#147;rents
    from real property&#148; if, considering the leases and all the
    surrounding circumstances, the arrangement does not conform with
    normal business practice, but is in reality used as a means of
    basing the percentage rent on income or profits.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Second, we must not own, actually or constructively, 10% or more
    of the shares or the assets or net profits of any lessee (a
    &#147;related party tenant&#148;), other than a TRS. The
    constructive ownership rules generally provide that, if 10% or
    more in value of our shares of beneficial interest is owned,
    directly or indirectly, by or for any person, we are considered
    as owning the shares owned, directly or indirectly, by or for
    such person. We anticipate that all of our hotels will be leased
    to TRSs. In addition, our declaration of trust prohibits
    transfers of our shares of beneficial interest that would cause
    us to own actually or constructively, 10% or more of the
    ownership interests in any non-TRS lessee. Based on the
    foregoing, we should never own, actually or constructively, 10%
    or more of any lessee other than a TRS. However, because the
    constructive ownership rules are broad and it is not possible to
    monitor continually direct and indirect transfers of our shares
    of beneficial interest, no absolute assurance can be given that
    such transfers or other events of which we have no knowledge
    will not cause us to own constructively 10% or more of a lessee
    (or a subtenant, in which case only rent attributable to the
    subtenant is disqualified) other than a TRS at some future date.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As described above, we may own up to 100% of the capital stock
    of one or more TRSs. A TRS is a fully taxable corporation that
    is permitted to lease hotel properties from the related REIT as
    long as it does not directly or indirectly operate or manage any
    lodging facilities or health care facilities or provide rights
    to any brand name under which any lodging or health care
    facility is operated, unless such rights are provided to an
    &#147;eligible independent contractor&#148; to operate or manage
    a lodging or health care facility if such rights are held
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    by the TRS as a franchisee, licensee, or in a similar capacity
    and such hotel is either owned by the TRS or leased to the TRS
    by its parent REIT. A TRS will not be considered to operate or
    manage a qualified lodging facility solely because the TRS
    directly or indirectly possesses a license, permit, or similar
    instrument enabling it to do so. Additionally, a TRS will not be
    considered to operate or manage a qualified lodging facility
    located outside of the United States, as long as an
    &#147;eligible independent contractor&#148; is responsible for
    the daily supervision and direction of such individuals on
    behalf of the TRS pursuant to a management contract or similar
    service contract. However, rent that we receive from a TRS will
    qualify as &#147;rents from real property&#148; as long as the
    property is operated on behalf of the TRS by an
    &#147;independent contractor&#148; who is adequately
    compensated, who does not, directly or through its shareholders,
    own more than 35% of our shares, taking into account certain
    ownership attribution rules, and who is, or is related to a
    person who is, actively engaged in the trade or business of
    operating &#147;qualified lodging facilities&#148; for any
    person unrelated to us and the TRS lessee (an &#147;eligible
    independent contractor&#148;). A &#147;qualified lodging
    facility&#148; is a hotel, motel, or other establishment more
    than one-half of the dwelling units in which are used on a
    transient basis, unless wagering activities are conducted at or
    in connection with such facility by any person who is engaged in
    the business of accepting wagers and who is legally authorized
    to engage in such business at or in connection with such
    facility. A &#147;qualified lodging facility&#148; includes
    customary amenities and facilities operated as part of, or
    associated with, the lodging facility as long as such amenities
    and facilities are customary for other properties of a
    comparable size and class owned by other unrelated owners. See
    &#147;&#151;&#160;Taxable REIT Subsidiaries.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to form several TRSs to lease our hotel properties.
    Our TRS lessees will engage independent third-party hotel
    managers that qualify as &#147;eligible independent
    contractors&#148; to operate the related hotels on behalf of
    such TRS lessees.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Third, the rent attributable to the personal property leased in
    connection with the lease of a hotel must not be greater than
    15% of the total rent received under the lease. The rent
    attributable to the personal property contained in a hotel is
    the amount that bears the same ratio to total rent for the
    taxable year as the average of the fair market values of the
    personal property at the beginning and at the end of the taxable
    year bears to the average of the aggregate fair market values of
    both the real and personal property contained in the hotel at
    the beginning and at the end of such taxable year (the
    &#147;personal property ratio&#148;). To comply with this
    limitation, a TRS lessee may acquire furnishings, equipment and
    other personal property. With respect to each hotel in which the
    TRS lessee does not own the personal property, we believe either
    that the personal property ratio will be less than 15% or that
    any rent attributable to excess personal property will not
    jeopardize our ability to qualify as a REIT. There can be no
    assurance, however, that the IRS would not challenge our
    calculation of a personal property ratio, or that a court would
    not uphold such assertion. If such a challenge were successfully
    asserted, we could fail to satisfy the 75% or 95% gross income
    test and thus potentially lose our REIT status.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Fourth, we cannot furnish or render noncustomary services to the
    tenants of our hotels, or manage or operate our hotels, other
    than through an independent contractor who is adequately
    compensated and from whom we do not derive or receive any
    income. However, we need not provide services through an
    &#147;independent contractor,&#148; but instead may provide
    services directly to our tenants, if the services are
    &#147;usually or customarily rendered&#148; in connection with
    the rental of space for occupancy only and are not considered to
    be provided for the tenants&#146; convenience. In addition, we
    may provide a minimal amount of &#147;noncustomary&#148;
    services to the tenants of a property, other than through an
    independent contractor, as long as our income from the services
    does not exceed 1% of our income from the related property.
    Finally, we may own up to 100% of the capital stock of one or
    more TRSs, which may provide noncustomary services to our
    tenants without tainting our rents from the related hotel
    properties. We will not perform any services other than
    customary ones for our lessees, unless such services are
    provided through independent contractors or TRSs.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If a portion of the rent that we receive from a hotel does not
    qualify as &#147;rents from real property&#148; because the rent
    attributable to personal property exceeds 15% of the total rent
    for a taxable year, the portion of the rent that is attributable
    to personal property will not be qualifying income for purposes
    of either the 75% or 95% gross income test. Thus, if such rent
    attributable to personal property, plus any other income that is
    nonqualifying income for purposes of the 95% gross income test,
    during a taxable year exceeds 5% of our gross income during the
    year, we would lose our REIT qualification. If, however, the
    rent from a particular
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    hotel does not qualify as &#147;rents from real property&#148;
    because either (1)&#160;the percentage rent is considered based
    on the income or profits of the related lessee, (2)&#160;the
    lessee either is a related party tenant or fails to qualify for
    the exception to the related party tenant rule for qualifying
    TRSs or (3)&#160;we furnish noncustomary services to the tenants
    of the hotel, or manage or operate the hotel, other than through
    a qualifying independent contractor or a TRS, none of the rent
    from that hotel would qualify as &#147;rents from real
    property.&#148; In that case, we might lose our REIT
    qualification because we might be unable to satisfy either the
    75% or 95% gross income test. In addition to the rent, the
    lessees will be required to pay certain additional charges. To
    the extent that such additional charges represent either
    (1)&#160;reimbursements of amounts that we are obligated to pay
    to third parties, such as a lessee&#146;s proportionate share of
    a property&#146;s operational or capital expenses, or
    (2)&#160;penalties for nonpayment or late payment of such
    amounts, such charges should qualify as &#147;rents from real
    property.&#148; However, to the extent that such charges do not
    qualify as &#147;rents from real property,&#148; they instead
    will be treated as interest that qualifies for the 95% gross
    income test.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Interest.</I>&#160;&#160;The term &#147;interest&#148;
    generally does not include any amount received or accrued,
    directly or indirectly, if the determination of such amount
    depends in whole or in part on the income or profits of any
    person. However, interest generally includes the following:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    an amount that is based on a fixed percentage or percentages of
    receipts or sales;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    an amount that is based on the income or profits of a debtor, as
    long as the debtor derives substantially all of its income from
    the real property securing the debt from leasing substantially
    all of its interest in the property, and only to the extent that
    the amounts received by the debtor would be qualifying
    &#147;rents from real property&#148; if received directly by a
    REIT.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If a loan contains a provision that entitles a REIT to a
    percentage of the borrower&#146;s gain upon the sale of the real
    property securing the loan or a percentage of the appreciation
    in the property&#146;s value as of a specific date, income
    attributable to that loan provision will be treated as gain from
    the sale of the property securing the loan, which generally is
    qualifying income for purposes of both gross income tests.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may, on a select basis, purchase mortgage debt and mezzanine
    loans when we believe our investment will allow us to acquire
    ownership of the underlying property. Interest on debt secured
    by a mortgage on real property or on interests in real property,
    including, for this purpose, discount points, prepayment
    penalties, loan assumption fees, and late payment charges that
    are not compensation for services, generally is qualifying
    income for purposes of the 75% gross income test. However, if a
    loan is secured by real property and other property and the
    highest principal amount of a loan outstanding during a taxable
    year exceeds the fair market value of the real property securing
    the loan as of the date the REIT agreed to acquire the loan, a
    portion of the interest income from such loan will not be
    qualifying income for purposes of the 75% gross income test, but
    will be qualifying income for purposes of the 95% gross income
    test. The portion of the interest income that will not be
    qualifying income for purposes of the 75% gross income test will
    be equal to the portion of the principal amount of the loan that
    is not secured by real property&#160;&#151; that is, the amount
    by which the loan exceeds the value of the real estate that is
    security for the loan.
</DIV>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Mezzanine loans are loans secured by equity interests in an
    entity that directly or indirectly owns real property, rather
    than by a direct mortgage of the real property. IRS Revenue
    Procedure
    <FONT style="white-space: nowrap">2003-65</FONT>
    provides a safe harbor pursuant to which a mezzanine loan, if it
    meets each of the requirements contained in the Revenue
    Procedure, will be treated by the IRS as a real estate asset for
    purposes of the REIT asset tests described below, and interest
    derived from it will be treated as qualifying mortgage interest
    for purposes of the 75% gross income test. Although the Revenue
    Procedure provides a safe harbor on which taxpayers may rely, it
    does not prescribe rules of substantive tax law. Moreover, we
    anticipate that the mezzanine loans we will acquire typically
    will not meet all of the requirements for reliance on this safe
    harbor. We intend to invest in mezzanine loans in manner that
    will enable us to continue to satisfy the gross income and asset
    tests.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Dividends.</I>&#160;&#160;Our share of any dividends received
    from any corporation (including any TRS, but excluding any REIT)
    in which we own an equity interest will qualify for purposes of
    the 95% gross income test but not for purposes of the 75% gross
    income test. Our share of any dividends received from any other
</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    REIT in which we own an equity interest, if any, will be
    qualifying income for purposes of both gross income tests.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Prohibited Transactions.</I>&#160;&#160;A REIT will incur a
    100% tax on the net income (including foreign currency gain)
    derived from any sale or other disposition of property, other
    than foreclosure property, that the REIT holds primarily for
    sale to customers in the ordinary course of a trade or business.
    We believe that none of our assets will be held primarily for
    sale to customers and that a sale of any of our assets will not
    be in the ordinary course of our business. Whether a REIT holds
    an asset &#147;primarily for sale to customers in the ordinary
    course of a trade or business&#148; depends, however, on the
    facts and circumstances in effect from time to time, including
    those related to a particular asset. A safe harbor to the
    characterization of the sale of property by a REIT as a
    prohibited transaction and the 100% prohibited transaction tax
    is available if the following requirements are met:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the REIT has held the property for not less than two years;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the aggregate expenditures made by the REIT, or any partner of
    the REIT, during the two-year period preceding the date of the
    sale that are includable in the basis of the property do not
    exceed 30% of the selling prince of the property;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    either (1)&#160;during the year in question, the REIT did not
    make more than seven sales of property other than foreclosure
    property or sales to which Section&#160;1033 of the Code
    applies, (2)&#160;the aggregate adjusted bases of all such
    properties sold by the REIT during the year did not exceed 10%
    of the aggregate bases of all of the assets of the REIT at the
    beginning of the year or (3)&#160;the aggregate fair market
    value of all such properties sold by the REIT during the year
    did not exceed 10% of the aggregate fair market value of all of
    the assets of the REIT at the beginning of the year;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    in the case of property not acquired through foreclosure or
    lease termination, the REIT has held the property for at least
    two years for the production of rental income;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    if the REIT has made more than seven sales of non-foreclosure
    property during the taxable year, substantially all of the
    marketing and development expenditures with respect to the
    property were made through an independent contractor from whom
    the REIT derives no income.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will attempt to comply with the terms of safe-harbor
    provision in the federal income tax laws prescribing when an
    asset sale will not be characterized as a prohibited
    transaction. We cannot assure you, however, that we can comply
    with the safe-harbor provision or that we will avoid owning
    property that may be characterized as property that we hold
    &#147;primarily for sale to customers in the ordinary course of
    a trade or business.&#148; The 100% tax will not apply to gains
    from the sale of property that is held through a TRS or other
    taxable corporation, although such income will be taxed to the
    corporation at regular corporate income tax rates.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Foreclosure Property.</I>&#160;&#160;We will be subject to
    tax at the maximum corporate rate on any income from foreclosure
    property, which includes certain foreign currency gains and
    related deductions, other than income that otherwise would be
    qualifying income for purposes of the 75% gross income test,
    less expenses directly connected with the production of that
    income. However, gross income from foreclosure property will
    qualify under the 75% and 95% gross income tests. Foreclosure
    property is any real property, including interests in real
    property, and any personal property incident to such real
    property:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    that is acquired by a REIT as the result of the REIT having bid
    on such property at foreclosure, or having otherwise reduced
    such property to ownership or possession by agreement or process
    of law, after there was a default or default was imminent on a
    lease of such property or on indebtedness that such property
    secured;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    for which the related loan was acquired by the REIT at a time
    when the default was not imminent or anticipated;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    for which the REIT makes a proper election to treat the property
    as foreclosure property.
</TD>
</TR>

</TABLE>
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    <BR>
    96
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A REIT will not be considered to have foreclosed on a property
    where the REIT takes control of the property as a
    <FONT style="white-space: nowrap">mortgagee-in-possession</FONT>
    and cannot receive any profit or sustain any loss except as a
    creditor of the mortgagor. Property generally ceases to be
    foreclosure property at the end of the third taxable year
    following the taxable year in which the REIT acquired the
    property, or longer if an extension is granted by the Secretary
    of the Treasury. However, this grace period terminates and
    foreclosure property ceases to be foreclosure property on the
    first day:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    on which a lease is entered into for the property that, by its
    terms, will give rise to income that does not qualify for
    purposes of the 75% gross income test, or any amount is received
    or accrued, directly or indirectly, pursuant to a lease entered
    into on or after such day that will give rise to income that
    does not qualify for purposes of the 75% gross income test;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    on which any construction takes place on the property, other
    than completion of a building or any other improvement, where
    more than 10% of the construction was completed before default
    became imminent;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    which is more than 90&#160;days after the day on which the REIT
    acquired the property and the property is used in a trade or
    business which is conducted by the REIT, other than through an
    independent contractor from whom the REIT itself does not derive
    or receive any income.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Hedging Transactions.</I>&#160;&#160;From time to time, we or
    our operating partnership may enter into hedging transactions
    with respect to one or more of our assets or liabilities. Our
    hedging activities may include entering into interest rate
    swaps, caps, and floors, options to purchase such items, and
    futures and forward contracts. Income and gain from
    &#147;hedging transactions&#148; will be excluded from gross
    income for purposes of both the 75% and 95% gross income tests.
    A &#147;hedging transaction&#148; means either (1)&#160;any
    transaction entered into in the normal course of our or our
    operating partnership&#146;s trade or business primarily to
    manage the risk of interest rate changes, price changes, or
    currency fluctuations with respect to borrowings made or to be
    made, or ordinary obligations incurred or to be incurred, to
    acquire or carry real estate assets and (2)&#160;any transaction
    entered into primarily to manage the risk of currency
    fluctuations with respect to any item of income or gain that
    would be qualifying income under the 75% or 95% gross income
    test (or any property which generates such income or gain). We
    are required to clearly identify any such hedging transaction
    before the close of the day on which it was acquired or entered
    into and to satisfy other identification requirements. We intend
    to structure any hedging transactions in a manner that does not
    jeopardize our qualification as a REIT.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Foreign Currency Gain.</I>&#160;&#160;Certain foreign
    currency gains will be excluded from gross income for purposes
    of one or both of the gross income tests. &#147;Real estate
    foreign exchange gain&#148; will be excluded from gross income
    for purposes of the 75% gross income test. Real estate foreign
    exchange gain generally includes foreign currency gain
    attributable to any item of income or gain that is qualifying
    income for purposes of the 75% gross income test, foreign
    currency gain attributable to the acquisition or ownership of
    (or becoming or being the obligor under) obligations secured by
    mortgages on real property or on interests in real property and
    certain foreign currency gain attributable to certain
    &#147;qualified business units&#148; of a REIT. &#147;Passive
    foreign exchange gain&#148; will be excluded from gross income
    for purposes of the 95% gross income test. Passive foreign
    exchange gain generally includes real estate foreign exchange
    gain as described above, and also includes foreign currency gain
    attributable to any item of income or gain that is qualifying
    income for purposes of the 95% gross income test and foreign
    currency gain attributable to the acquisition or ownership of
    (or becoming or being the obligor under) obligations. Because
    passive foreign exchange gain includes real estate foreign
    exchange gain, real estate foreign exchange gain is excluded
    from gross income for purposes of both the 75% and 95% gross
    income tests. These exclusions for real estate foreign exchange
    gain and passive foreign exchange gain do not apply to any
    certain foreign currency gain derived from dealing, or engaging
    in substantial and regular trading, in securities. Such gain is
    treated as nonqualifying income for purposes of both the 75% and
    95% gross income tests.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    97
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Failure to Satisfy Gross Income Tests.</I>&#160;&#160;If we
    fail to satisfy one or both of the gross income tests for any
    taxable year, we nevertheless may qualify as a REIT for that
    year if we qualify for relief under certain provisions of the
    federal income tax laws. Those relief provisions are available
    if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our failure to meet those tests is due to reasonable cause and
    not to willful neglect;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    following such failure for any taxable year, we file a schedule
    of the sources of our income in accordance with regulations
    prescribed by the Secretary of the U.S.&#160;Treasury.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We cannot predict, however, whether in all circumstances we
    would qualify for the relief provisions. In addition, as
    discussed above in &#147;&#151;&#160;Taxation of Our
    Company,&#148; even if the relief provisions apply, we would
    incur a 100% tax on the gross income attributable to the greater
    of the amount by which we fail the 75% gross income test or the
    95% gross income test multiplied, in either case, by a fraction
    intended to reflect our profitability.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Asset
    Tests</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    To qualify as a REIT, we also must satisfy the following asset
    tests at the end of each quarter of each taxable year.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    First, at least 75% of the value of our total assets must
    consist of:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    cash or cash items, including certain receivables and, in
    certain circumstances, foreign currencies;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    government securities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    interests in real property, including leaseholds and options to
    acquire real property and leaseholds;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    interests in mortgages loans secured by real property;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    stock in other REITs;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    investments in stock or debt instruments during the one-year
    period following our receipt of new capital that we raise
    through equity offerings or public offerings of debt with at
    least a five-year term.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Second, of our investments not included in the 75% asset class,
    the value of our interest in any one issuer&#146;s securities
    may not exceed 5% of the value of our total assets, or the 5%
    asset test.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Third, of our investments not included in the 75% asset class,
    we may not own more than 10% of the voting power or value of any
    one issuer&#146;s outstanding securities, or the 10% vote or
    value test.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Fourth, no more than 25% of the value of our total assets may
    consist of the securities of one or more TRSs.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Fifth, no more than 25% of the value of our total assets may
    consist of the securities of TRSs and other non-TRS taxable
    subsidiaries and other assets that are not qualifying assets for
    purposes of the 75% asset test, or the 25% securities test.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of the 5% asset test and the 10% vote or value
    test, the term &#147;securities&#148; does not include shares in
    another REIT, equity or debt securities of a qualified REIT
    subsidiary or TRS, mortgage loans that constitute real estate
    assets, or equity interests in a partnership. The term
    &#147;securities,&#148; however, generally includes debt
    securities issued by a partnership or another REIT, except that
    for purposes of the 10% value test, the term
    &#147;securities&#148; does not include:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    <I>&#147;Straight debt&#148; </I>securities, which is defined as
    a written unconditional promise to pay on demand or on a
    specified date a sum certain in money if (i)&#160;the debt is
    not convertible, directly or indirectly, into shares, and
    (ii)&#160;the interest rate and interest payment dates are not
    contingent on profits, the borrower&#146;s discretion, or
    similar factors. &#147;Straight debt&#148; securities do not
    include
</TD>
</TR>

</TABLE>
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    <BR>
    98
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>
</TD>
    <TD align="left">
    any securities issued by a partnership or a corporation in which
    we or any controlled TRS (<I>i.e.</I>, a TRS in which we own
    directly or indirectly more than 50% of the voting power or
    value of the stock) hold non-&#147;straight debt&#148;
    securities that have an aggregate value of more than 1% of the
    issuer&#146;s outstanding securities. However, &#147;straight
    debt&#148; securities include debt subject to the following
    contingencies:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="13%"></TD>
    <TD width="5%"></TD>
    <TD width="82%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    a contingency relating to the time of payment of interest or
    principal, as long as either (i)&#160;there is no change to the
    effective yield of the debt obligation, other than a change to
    the annual yield that does not exceed the greater of 0.25% or 5%
    of the annual yield, or (ii)&#160;neither the aggregate issue
    price nor the aggregate face amount of the issuer&#146;s debt
    obligations held by us exceeds $1&#160;million and no more than
    12&#160;months of unaccrued interest on the debt obligations can
    be required to be prepaid;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    a contingency relating to the time or amount of payment upon a
    default or prepayment of a debt obligation, as long as the
    contingency is consistent with customary commercial practice.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    Any loan to an individual or an estate;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    Any &#147;section&#160;467&#160;rental agreement,&#148; other
    than an agreement with a related party tenant;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    Any obligation to pay &#147;rents from real property&#148;;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    Certain securities issued by governmental entities;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    Any security issued by a REIT;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    Any debt instrument issued by an entity treated as a partnership
    for federal income tax purposes in which we are a partner to the
    extent of our proportionate interest in the equity and debt
    securities of the partnership;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    Any debt instrument issued by an entity treated as a partnership
    for federal income tax purposes not described in the preceding
    bullet points if at least 75% of the partnership&#146;s gross
    income, excluding income from prohibited transactions, is
    qualifying income for purposes of the 75% gross income test
    described above in &#147;&#151;&#160;Gross Income Tests.&#148;
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For purposes of the 10% value test, our proportionate share of
    the assets of a partnership is our proportionate interest in any
    securities issued by the partnership, without regard to the
    securities described in the last two bullet points above.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As described above, we may, on a select basis, invest in
    mezzanine loans. Although we expect that our investments in
    mezzanine loans will generally be treated as real estate assets,
    we anticipate that the mezzanine loans in which we invest will
    not meet all the requirements of the safe harbor in IRS Revenue
    Procedure
    <FONT style="white-space: nowrap">2003-65.</FONT>
    Thus no assurance can be provided that the IRS will not
    challenge our treatment of mezzanine loans as real estate
    assets. We intend to invest in mezzanine loans in a manner that
    will enable us to continue to satisfy the asset and gross income
    test requirements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will monitor the status of our assets for purposes of the
    various asset tests and will manage our portfolio in order to
    comply at all times with such tests. If we fail to satisfy the
    asset tests at the end of a calendar quarter, we will not lose
    our REIT qualification if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    we satisfied the asset tests at the end of the preceding
    calendar quarter;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the discrepancy between the value of our assets and the asset
    test requirements arose from changes in the market values of our
    assets and was not wholly or partly caused by the acquisition of
    one or more non-qualifying assets.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we did not satisfy the condition described in the second
    item, above, we still could avoid disqualification by
    eliminating any discrepancy within 30&#160;days after the close
    of the calendar quarter in which it arose.
</DIV>
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    <BR>
    99
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In the event that we violate the 5% asset test or the 10% vote
    or value test described above, we will not lose our REIT
    qualification if (1)&#160;the failure is <I>de minimis </I>(up
    to the lesser of 1% of our assets or $10&#160;million) and
    (2)&#160;we dispose of assets or otherwise comply with the asset
    tests within six months after the last day of the quarter in
    which we identify such failure. In the event of a failure of any
    of the asset tests (other than <I>de minimis </I>failures
    described in the preceding sentence), as long as the failure was
    due to reasonable cause and not to willful neglect, we will not
    lose our REIT status if we (1)&#160;dispose of assets or
    otherwise comply with the asset tests within six months after
    the last day of the quarter in which we identify the failure,
    (2)&#160;we file a description of each asset causing the failure
    with the IRS and (3)&#160;pay a tax equal to the greater of
    $50,000 or 35% of the net income from the nonqualifying assets
    during the period in which we failed to satisfy the asset tests.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We believe that the assets that we will hold will satisfy the
    foregoing asset test requirements. However, we will not obtain
    independent appraisals to support our conclusions as to the
    value of our assets and securities, or the real estate
    collateral for the mortgage or mezzanine loans that support our
    investments. Moreover, the values of some assets may not be
    susceptible to a precise determination. As a result, there can
    be no assurance that the IRS will not contend that our ownership
    of securities and other assets violates one or more of the asset
    tests applicable to REITs.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Distribution
    Requirements</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each taxable year, we must distribute dividends, other than
    capital gain dividends and deemed distributions of retained
    capital gain, to our shareholders in an aggregate amount at
    least equal to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the sum of
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="13%"></TD>
    <TD width="5%"></TD>
    <TD width="82%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    90% of our &#147;REIT taxable income,&#148; computed without
    regard to the dividends paid deduction and our net capital gain
    or loss,&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    90% of our after-tax net income, if any, from foreclosure
    property, minus
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the sum of certain items of non-cash income.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We must pay such distributions in the taxable year to which they
    relate, or in the following taxable year if either (a)&#160;we
    declare the distribution before we timely file our federal
    income tax return for the year and pay the distribution on or
    before the first regular dividend payment date after such
    declaration or (b)&#160;we declare the distribution in October,
    November or December of the taxable year, payable to
    shareholders of record on a specified day in any such month, and
    we actually pay the dividend before the end of January of the
    following year. The distributions under clause&#160;(a) are
    taxable to the shareholders in the year in which paid, and the
    distributions in clause&#160;(b) are treated as paid on
    December&#160;31st&#160;of the prior taxable year. In both
    instances, these distributions relate to our prior taxable year
    for purposes of the 90% distribution requirement.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will pay federal income tax on taxable income, including net
    capital gain, that we do not distribute to shareholders.
    Furthermore, if we fail to distribute during a calendar year, or
    by the end of January following the calendar year in the case of
    distributions with declaration and record dates falling in the
    last three months of the calendar year, at least the sum of:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    85% of our REIT ordinary income for such year,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    95% of our REIT capital gain income for such year,&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    any undistributed taxable income from prior periods,
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    we will incur a 4% nondeductible excise tax on the excess of
    such required distribution over the amounts we actually
    distribute.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may elect to retain and pay income tax on the net long-term
    capital gain we receive in a taxable year. If we so elect, we
    will be treated as having distributed any such retained amount
    for purposes of the 4% nondeductible excise tax described above.
    We intend to make timely distributions sufficient to satisfy the
    annual distribution requirements and to avoid corporate income
    tax and the 4% nondeductible excise tax.
</DIV>
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    <BR>
    100
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    It is possible that, from time to time, we may experience timing
    differences between the actual receipt of income and actual
    payment of deductible expenses and the inclusion of that income
    and deduction of such expenses in arriving at our REIT taxable
    income. For example, we may not deduct recognized capital losses
    from our &#147;REIT taxable income.&#148; Further, it is
    possible that, from time to time, we may be allocated a share of
    net capital gain attributable to the sale of depreciated
    property that exceeds our allocable share of cash attributable
    to that sale. As a result of the foregoing, we may have less
    cash than is necessary to distribute taxable income sufficient
    to avoid corporate income tax and the excise tax imposed on
    certain undistributed income or even to meet the 90%
    distribution requirement. In such a situation, we may need to
    borrow funds or, if possible, pay taxable dividends of our
    shares of beneficial interest or debt securities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under certain circumstances, we may be able to correct a failure
    to meet the distribution requirement for a year by paying
    &#147;deficiency dividends&#148; to our shareholders in a later
    year. We may include such deficiency dividends in our deduction
    for dividends paid for the earlier year. Although we may be able
    to avoid income tax on amounts distributed as deficiency
    dividends, we will be required to pay interest to the IRS based
    upon the amount of any deduction we take for deficiency
    dividends.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Taxable
    REIT Subsidiaries</FONT></B>
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As described above, we may own up to 100% of the capital stock
    of one or more TRSs. A TRS is a fully taxable corporation that
    may earn income that would not be qualifying income if earned
    directly by us. A TRS may provide services to our lessees and
    perform activities unrelated to our lessees, such as third-party
    management, development, and other independent business
    activities. However, a TRS may not directly or indirectly
    operate or manage any lodging facilities or health care
    facilities or provide rights to any brand name under which any
    hotel or health care facility is operated, unless such rights
    are provided to an &#147;eligible independent contractor&#148;
    (as described below) to operate or manage a lodging facility if
    such rights are held by the TRS as a franchisee, licensee, or in
    a similar capacity and such lodging facility is either owned by
    the TRS or leased to the TRS by its parent REIT. A TRS will not
    be considered to operate or manage a qualified lodging facility
    solely because the TRS directly or indirectly possesses a
    license, permit, or similar instrument enabling it to do so.
    Additionally, a TRS that employs individuals working at a
    qualified lodging facility located outside the United States
    will not be considered to operate or manage a qualified lodging
    facility as long as an &#147;eligible independent
    contractor&#148; is responsible for the daily supervision and
    direction of such individuals on behalf of the TRS pursuant to a
    management contract or similar service contract.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We and our corporate subsidiary must elect for the subsidiary to
    be treated as a TRS. A corporation of which a qualifying TRS
    directly or indirectly owns more than 35% of the voting power or
    value of the shares will automatically be treated as a TRS.
    Overall, no more than 25% of the value of our assets may consist
    of securities of one or more TRSs, and no more than 25% of the
    value of our assets may consist of the securities of TRSs and
    other taxable subsidiaries and other assets that are not
    qualifying assets for purposes of the 75% asset test.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Rent that we receive from our TRSs will qualify as &#147;rents
    from real property&#148; as long as the property is operated on
    behalf of the TRS by a person who qualifies as an
    &#147;independent contractor&#148; and who is, or is related to
    a person who is, actively engaged in the trade or business of
    operating &#147;qualified lodging facilities&#148; for any
    person unrelated to us and the TRS lessee (an &#147;eligible
    independent contractor&#148;). A &#147;qualified lodging
    facility&#148; includes customary amenities and facilities
    operated as part of, or associated with, the lodging facility as
    long as such amenities and facilities are customary for other
    properties of a comparable size and class owned by other
    unrelated owners.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We intend to lease all of our hotel properties to TRSs, and all
    of those TRSs will engage &#147;eligible independent
    contractors&#148; to operate and manage those hotels.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The TRS rules limit the deductibility of interest paid or
    accrued by a TRS to us to assure that the TRS is subject to an
    appropriate level of corporate taxation. Further, the rules
    impose a 100% excise tax on certain transactions between a TRS
    and us or our tenants that are not conducted on an
    arm&#146;s-length basis. We believe that all transactions
    between us and each of our TRSs will be conducted on an
    arm&#146;s-length basis.
</DIV>
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    <BR>
    101
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Recordkeeping
    Requirements</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We must maintain certain records in order to qualify as a REIT.
    In addition, to avoid a monetary penalty, we must request on an
    annual basis information from our shareholders designed to
    disclose the actual ownership of our outstanding shares of
    beneficial interest. We intend to comply with these requirements.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Failure
    to Qualify</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we fail to satisfy one or more requirements for REIT
    qualification, other than the gross income tests and the asset
    tests, we could avoid disqualification if our failure is due to
    reasonable cause and not to willful neglect and we pay a penalty
    of $50,000 for each such failure. In addition, there are relief
    provisions for a failure of the gross income tests and asset
    tests, as described in &#147;&#151;&#160;Gross Income
    Tests&#148; and &#147;&#151;&#160;Asset Tests.&#148;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If we fail to qualify as a REIT in any taxable year, and no
    relief provision applies, we would be subject to federal income
    tax and any applicable alternative minimum tax on our taxable
    income at regular corporate rates. In calculating our taxable
    income in a year in which we fail to qualify as a REIT, we would
    not be able to deduct amounts paid out to shareholders. In fact,
    we would not be required to distribute any amounts to
    shareholders in that year. In such event, to the extent of our
    current and accumulated earnings and profits, all distributions
    to shareholders would be taxable as ordinary income. Subject to
    certain limitations of the federal income tax laws, corporate
    shareholders might be eligible for the dividends received
    deduction and shareholders taxed at individual rates may be
    eligible for the reduced federal income tax rate of 15% through
    2010 on such dividends. Unless we qualified for relief under
    specific statutory provisions, we also would be disqualified
    from taxation as a REIT for the four taxable years following the
    year during which we ceased to qualify as a REIT. We cannot
    predict whether in all circumstances we would qualify for such
    statutory relief.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Taxation
    of Taxable U.S. Shareholders</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As used herein, the term &#147;U.S.&#160;shareholder&#148; means
    a holder of our common shares that for U.S.&#160;federal income
    tax purposes is:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    a citizen or resident of the United States;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    a corporation (including an entity treated as a corporation for
    federal income tax purposes) created or organized in or under
    the laws of the United States, any of its states or the District
    of Columbia;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    an estate whose income is subject to federal income taxation
    regardless of its source;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    any trust if (1)&#160;a U.S.&#160;court is able to exercise
    primary supervision over the administration of such trust and
    one or more U.S.&#160;persons have the authority to control all
    substantial decisions of the trust or (2)&#160;it has a valid
    election in place to be treated as a U.S.&#160;person.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If a partnership, entity or arrangement treated as a partnership
    for U.S.&#160;federal income tax purposes holds our common
    shares, the federal income tax treatment of a partner in the
    partnership will generally depend on the status of the partner
    and the activities of the partnership. If you are a partner in a
    partnership holding our common shares, you are urged to consult
    your tax advisor regarding the consequences of the ownership and
    disposition of our common shares by the partnership.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As long as we qualify as a REIT, a taxable U.S.&#160;shareholder
    must generally take into account as ordinary income
    distributions made out of our current or accumulated earnings
    and profits that we do not designate as capital gain dividends
    or retained long-term capital gain. A U.S.&#160;shareholder will
    not qualify for the dividends received deduction generally
    available to corporations. In addition, dividends paid to a
    U.S.&#160;shareholder generally will not qualify for the 15% tax
    rate for &#147;qualified dividend income.&#148; The maximum tax
    rate for qualified dividend income received by non-corporate
    taxpayers is 15% through 2010. The maximum tax rate on qualified
    dividend income is lower than the maximum tax rate on ordinary
    income, which is currently 35%. Qualified dividend income
    generally includes dividends paid to taxpayers taxed at
    individual rates by domestic C corporations and certain
    qualified foreign corporations. Because we are not
</DIV>
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    <BR>
    102
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    generally subject to federal income tax on the portion of our
    REIT taxable income distributed to our shareholders (see
    &#147;&#151;&#160;Taxation of Our Company&#148; above), our
    dividends generally will not be eligible for the 15% rate on
    qualified dividend income. As a result, our ordinary REIT
    dividends will be taxed at the higher tax rate applicable to
    ordinary income. However, the 15% tax rate for qualified
    dividend income will apply to our ordinary REIT dividends
    (i)&#160;attributable to dividends received by us from non-REIT
    corporations, such as our TRS, and (ii)&#160;to the extent
    attributable to income upon which we have paid corporate income
    tax (<I>e.g.</I>, to the extent that we distribute less than
    100% of our taxable income). In general, to qualify for the
    reduced tax rate on qualified dividend income, a shareholder
    must hold our common shares for more than 60&#160;days during
    the <FONT style="white-space: nowrap">121-day</FONT>
    period beginning on the date that is 60&#160;days before the
    date on which our common shares becomes ex-dividend.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S.&#160;shareholder generally will take into account as
    long-term capital gain any distributions that we designate as
    capital gain dividends without regard to the period for which
    the U.S.&#160;shareholder has held our common shares. We
    generally will designate our capital gain dividends as either
    15% or 25% rate distributions. See &#147;&#151;&#160;Capital
    Gains and Losses.&#148; A corporate U.S.&#160;shareholder,
    however, may be required to treat up to 20% of certain capital
    gain dividends as ordinary income.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We may elect to retain and pay income tax on the net long-term
    capital gain that we receive in a taxable year. In that case, to
    the extent that we designate such amount in a timely notice to
    such shareholder, a U.S.&#160;shareholder would be taxed on its
    proportionate share of our undistributed long-term capital gain.
    The U.S.&#160;shareholder would receive a credit for its
    proportionate share of the tax we paid. The
    U.S.&#160;shareholder would increase the basis in its shares of
    beneficial interest by the amount of its proportionate share of
    our undistributed long-term capital gain, minus its share of the
    tax we paid.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S.&#160;shareholder will not incur tax on a distribution in
    excess of our current and accumulated earnings and profits if
    the distribution does not exceed the adjusted basis of the
    U.S.&#160;shareholder&#146;s common shares. Instead, the
    distribution will reduce the adjusted basis of such shares of
    beneficial interest. A U.S.&#160;shareholder will recognize a
    distribution in excess of both our current and accumulated
    earnings and profits and the U.S.&#160;shareholder&#146;s
    adjusted basis in his or her shares of beneficial interest as
    long-term capital gain, or short-term capital gain if the shares
    of beneficial interest have been held for one year or less,
    assuming the shares of beneficial interest are a capital asset
    in the hands of the U.S.&#160;shareholder. In addition, if we
    declare a distribution in October, November, or December of any
    year that is payable to a U.S.&#160;shareholder of record on a
    specified date in any such month, such distribution shall be
    treated as both paid by us and received by the
    U.S.&#160;shareholder on December 31 of such year, provided that
    we actually pay the distribution during January of the following
    calendar year.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Shareholders may not include in their individual income tax
    returns any of our net operating losses or capital losses.
    Instead, these losses are generally carried over by us for
    potential offset against our future income. Taxable
    distributions from us and gain from the disposition of our
    common shares will not be treated as passive activity income
    and, therefore, shareholders generally will not be able to apply
    any &#147;passive activity losses,&#148; such as losses from
    certain types of limited partnerships in which the shareholder
    is a limited partner, against such income. In addition, taxable
    distributions from us and gain from the disposition of our
    common shares generally will be treated as investment income for
    purposes of the investment interest limitations. We will notify
    shareholders after the close of our taxable year as to the
    portions of the distributions attributable to that year that
    constitute ordinary income, return of capital and capital gain.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Taxation
    of U.S. Shareholders on the Disposition of Common
    Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A U.S.&#160;shareholder who is not a dealer in securities must
    generally treat any gain or loss realized upon a taxable
    disposition of our common shares as long-term capital gain or
    loss if the U.S.&#160;shareholder has held our common shares for
    more than one year and otherwise as short-term capital gain or
    loss. In general, a U.S.&#160;shareholder will realize gain or
    loss in an amount equal to the difference between the sum of the
    fair market value of any property and the amount of cash
    received in such disposition and the
    U.S.&#160;shareholder&#146;s adjusted tax basis. A
    shareholder&#146;s adjusted tax basis generally will equal the
    U.S.&#160;shareholder&#146;s acquisition cost, increased by the
    excess of net capital gains deemed distributed to the
    U.S.&#160;shareholder (discussed above)
</DIV>
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    <BR>
    103
</DIV><!-- END PAGE WIDTH -->
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    less tax deemed paid on such gains and reduced by any returns of
    capital. However, a U.S.&#160;shareholder must treat any loss
    upon a sale or exchange of common shares held by such
    shareholder for six months or less as a long-term capital loss
    to the extent of capital gain dividends and any other actual or
    deemed distributions from us that such U.S.&#160;shareholder
    treats as long-term capital gain. All or a portion of any loss
    that a U.S.&#160;shareholder realizes upon a taxable disposition
    of our common shares may be disallowed if the
    U.S.&#160;shareholder purchases other common shares within
    30&#160;days before or after the disposition.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Capital
    Gains and Losses</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A taxpayer generally must hold a capital asset for more than one
    year for gain or loss derived from its sale or exchange to be
    treated as long-term capital gain or loss. The highest marginal
    individual income tax rate currently is 35% (which, absent
    additional congressional action, rate will apply until
    December&#160;31, 2010). The maximum tax rate on long-term
    capital gain applicable to taxpayers taxed at individual rates
    is 15% for sales and exchanges of assets held for more than one
    year occurring through December&#160;31, 2010. The maximum tax
    rate on long-term capital gain from the sale or exchange of
    &#147;Section&#160;1250 property,&#148; or depreciable real
    property, is 25%, which applies to the lesser of the total
    amount of the gain or the accumulated depreciation on the
    Section&#160;1250 property.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    With respect to distributions that we designate as capital gain
    dividends and any retained capital gain that we are deemed to
    distribute, we generally may designate whether such a
    distribution is taxable to our shareholders taxed at individual
    rates at a 15% or 25% rate. Thus, the tax rate differential
    between capital gain and ordinary income for those taxpayers may
    be significant. In addition, the characterization of income as
    capital gain or ordinary income may affect the deductibility of
    capital losses. A non-corporate taxpayer may deduct capital
    losses not offset by capital gains against its ordinary income
    only up to a maximum annual amount of $3,000. A non-corporate
    taxpayer may carry forward unused capital losses indefinitely. A
    corporate taxpayer must pay tax on its net capital gain at
    ordinary corporate rates. A corporate taxpayer may deduct
    capital losses only to the extent of capital gains, with unused
    losses being carried back three years and forward five years.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Taxation
    of Tax-Exempt Shareholders</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Tax-exempt entities, including qualified employee pension and
    profit sharing trusts and individual retirement accounts,
    generally are exempt from federal income taxation. However, they
    are subject to taxation on their unrelated business taxable
    income, or UBTI. Although many investments in real estate
    generate UBTI, the IRS has issued a ruling that dividend
    distributions from a REIT to an exempt employee pension trust do
    not constitute UBTI so long as the exempt employee pension trust
    does not otherwise use the shares of beneficial interest in the
    REIT in an unrelated trade or business of the pension trust.
    Based on that ruling, amounts that we distribute to tax-exempt
    shareholders generally should not constitute UBTI. However, if a
    tax-exempt shareholder were to finance its acquisition of common
    shares with debt, a portion of the income that it receives from
    us would constitute UBTI pursuant to the &#147;debt-financed
    property&#148; rules. Moreover, social clubs, voluntary employee
    benefit associations, supplemental unemployment benefit trusts
    and qualified group legal services plans that are exempt from
    taxation under special provisions of the federal income tax laws
    are subject to different UBTI rules, which generally will
    require them to characterize distributions that they receive
    from us as UBTI. Finally, in certain circumstances, a qualified
    employee pension or profit sharing trust that owns more than 10%
    of our shares of beneficial interest must treat a percentage of
    the dividends that it receives from us as UBTI. Such percentage
    is equal to the gross income we derive from an unrelated trade
    or business, determined as if we were a pension trust, divided
    by our total gross income for the year in which we pay the
    dividends. That rule applies to a pension trust holding more
    than 10% of our shares of beneficial interest only if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the percentage of our dividends that the tax-exempt trust must
    treat as UBTI is at least 5%;
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    we qualify as a REIT by reason of the modification of the rule
    requiring that no more than 50% of our shares of beneficial
    interest be owned by five or fewer individuals that allows the
</TD>
</TR>
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</TABLE>
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    <BR>
    104
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>
</TD>
    <TD align="left">
    beneficiaries of the pension trust to be treated as holding our
    shares of beneficial interest in proportion to their actuarial
    interests in the pension trust;&#160;and
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    either:
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="13%"></TD>
    <TD width="5%"></TD>
    <TD width="82%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    one pension trust owns more than 25% of the value of our shares
    of beneficial interest;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    a group of pension trusts individually holding more than 10% of
    the value of our shares of beneficial interest collectively owns
    more than 50% of the value of our shares of beneficial interest.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Taxation
    of <FONT style="white-space: nowrap">Non-U.S.</FONT>
    Shareholders</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The term
    <FONT style="white-space: nowrap">&#147;non-U.S.&#160;shareholder&#148;</FONT>
    means a holder of our common shares that is not a
    U.S.&#160;shareholder or a partnership (or entity treated as a
    partnership for federal income tax purposes). The rules
    governing federal income taxation of nonresident alien
    individuals, foreign corporations, foreign partnerships, and
    other foreign shareholders are complex. This section is only a
    summary of such rules. <B>We urge
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholders</FONT>
    to consult their own tax advisors to determine the impact of
    federal, state, and local income tax laws on the purchase,
    ownership and sale of our common shares, including any reporting
    requirements</B>.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    that receives a distribution that is not attributable to gain
    from our sale or exchange of a &#147;United States real property
    interest,&#148; or USRPI, as defined below, and that we do not
    designate as a capital gain dividend or retained capital gain
    will recognize ordinary income to the extent that we pay such
    distribution out of our current or accumulated earnings and
    profits. A withholding tax equal to 30% of the gross amount of
    the distribution ordinarily will apply to such distribution
    unless an applicable tax treaty reduces or eliminates the tax.
    However, if a distribution is treated as effectively connected
    with the
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder&#146;s</FONT>
    conduct of a U.S.&#160;trade or business, the
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    generally will be subject to federal income tax on the
    distribution at graduated rates, in the same manner as
    U.S.&#160;shareholders are taxed with respect to such
    distribution, and a
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    that is a corporation also may be subject to the 30% branch
    profits tax with respect to that distribution. We plan to
    withhold U.S.&#160;income tax at the rate of 30% on the gross
    amount of any such distribution paid to a
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    unless either:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    a lower treaty rate applies and the
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    files an IRS
    <FONT style="white-space: nowrap">Form&#160;W-8BEN</FONT>
    evidencing eligibility for that reduced rate with us;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    files an IRS
    <FONT style="white-space: nowrap">Form&#160;W-8ECI</FONT>
    with us claiming that the distribution is effectively connected
    income.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    will not incur tax on a distribution in excess of our current
    and accumulated earnings and profits if the excess portion of
    such distribution does not exceed the adjusted basis of its
    common shares. Instead, the excess portion of such distribution
    will reduce the adjusted basis of such shares of beneficial
    interest. A
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    will be subject to tax on a distribution that exceeds both our
    current and accumulated earnings and profits and the adjusted
    basis of its common shares, if the
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    otherwise would be subject to tax on gain from the sale or
    disposition of its common shares, as described below. Because we
    generally cannot determine at the time we make a distribution
    whether the distribution will exceed our current and accumulated
    earnings and profits, we normally will withhold tax on the
    entire amount of any distribution at the same rate as we would
    withhold on a dividend. However, a
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    may claim a refund of amounts that we withhold if we later
    determine that a distribution in fact exceeded our current and
    accumulated earnings and profits.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For any year in which we qualify as a REIT, a
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    will incur tax on distributions that are attributable to gain
    from our sale or exchange of a USRPI under the Foreign
    Investment in Real Property Act of 1980, or FIRPTA. A USRPI
    includes certain interests in real property and stock in
    corporations at least 50% of whose assets consist of interests
    in real property. Under FIRPTA, a
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    is taxed on distributions attributable to gain from sales of
    USRPIs as if such gain were effectively connected with a
    U.S.&#160;business of the
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder.</FONT>
    A
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    thus would be taxed on such a distribution at the normal capital
    gains rates applicable to U.S.&#160;shareholders, subject to
    applicable
</DIV>
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    <BR>
    105
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    alternative minimum tax and a special alternative minimum tax in
    the case of a nonresident alien individual. A
    <FONT style="white-space: nowrap">non-U.S.&#160;corporate</FONT>
    shareholder not entitled to treaty relief or exemption also may
    be subject to the 30% branch profits tax on such a distribution.
    We would be required to withhold 35% of any distribution that we
    could designate as a capital gain dividend. A
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    may receive a credit against its tax liability for the amount we
    withhold.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    However, if our common shares are regularly traded on an
    established securities market in the United States, capital gain
    distributions on our common shares that are attributable to our
    sale of real property will be treated as ordinary dividends
    rather than as gain from the sale of a USRPI, as long as the
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    did not own more than 5% of our common shares at any time during
    the one-year period preceding the distribution. As a result,
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholders</FONT>
    generally will be subject to withholding tax on such capital
    gain distributions in the same manner as they are subject to
    withholding tax on ordinary dividends. We anticipate that our
    common shares will be regularly traded on an established
    securities market in the United States following this offering.
    If our common shares are not regularly traded on an established
    securities market in the United States or the
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    owned more than 5% of our common shares at any time during the
    one-year period preceding the distribution, capital gain
    distributions that are attributable to our sale of real property
    would be subject to tax under FIRPTA, as described in the
    preceding paragraph. Moreover, if a
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    disposes of our common shares during the
    <FONT style="white-space: nowrap">30-day</FONT>
    period preceding a dividend payment, and such
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    (or a person related to such
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder)</FONT>
    acquires or enters into a contract or option to acquire our
    common shares within 61&#160;days of the first day of the
    <FONT style="white-space: nowrap">30-day</FONT>
    period described above, and any portion of such dividend payment
    would, but for the disposition, be treated as a USRPI capital
    gain to such
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder,</FONT>
    then such
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    shall be treated as having USRPI capital gain in an amount that,
    but for the disposition, would have been treated as USRPI
    capital gain.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <FONT style="white-space: nowrap">Non-U.S.&#160;shareholders</FONT>
    could incur tax under FIRPTA with respect to gain realized upon
    a disposition of our common shares if we are a United States
    real property holding corporation during a specified testing
    period. If at least 50% of a REIT&#146;s assets are United
    States real property interests, then the REIT will be a United
    States real property holding corporation. We anticipate that we
    will be a United States real property holding corporation based
    on our investment strategy. However, if we are a United States
    real property holding corporation, a
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    generally would not incur tax under FIRPTA on gain from the sale
    of our common shares if we are a &#147;domestically controlled
    qualified investment entity.&#148; A domestically controlled
    qualified investment entity includes a REIT in which, at all
    times during a specified testing period, less than 50% in value
    of its shares are held directly or indirectly by
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholders.</FONT>
    We cannot assure you that this test will be met. If our common
    shares are regularly traded on an established securities market,
    an additional exception to the tax under FIRPTA will be
    available with respect to our common shares, even if we do not
    qualify as a domestically controlled qualified investment entity
    at the time the
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    sells our common shares. Under that exception, the gain from
    such a sale by such a
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    will not be subject to tax under FIRPTA if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our common shares are treated as being regularly traded under
    applicable U.S.&#160;Treasury regulations on an established
    securities market;&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    owned, actually or constructively, 5% or less of our common
    shares at all times during a specified testing period.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As noted above, we anticipate that our common shares will be
    regularly traded on an established securities market following
    this offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the gain on the sale of our common shares were taxed under
    FIRPTA, a
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    would be taxed on that gain in the same manner as
    U.S.&#160;shareholders, subject to applicable alternative
    minimum tax and a special alternative minimum tax in the case of
    nonresident alien individuals. Furthermore, a
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    generally will incur tax on gain not subject to FIRPTA if:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the gain is effectively connected with the
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder&#146;s</FONT>
    U.S.&#160;trade or business, in which case the
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    will be subject to the same treatment as U.S.&#160;shareholders
    with respect to such gain;&#160;or
</TD>
</TR>

</TABLE>
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    <BR>
    106
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    is a nonresident alien individual who was present in the
    U.S.&#160;for 183&#160;days or more during the taxable year and
    has a &#147;tax home&#148; in the United States, in which case
    the
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    will incur a 30% tax on his or her capital gains.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Information
    Reporting Requirements and Backup Withholding</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will report to our shareholders and to the IRS the amount of
    distributions we pay during each calendar year, and the amount
    of tax we withhold, if any. Under the backup withholding rules,
    a shareholder may be subject to backup withholding at a rate of
    28% with respect to distributions unless the holder:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    is a corporation or qualifies for certain other exempt
    categories and, when required, demonstrates this fact;&#160;or
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    provides a taxpayer identification number, certifies as to no
    loss of exemption from backup withholding, and otherwise
    complies with the applicable requirements of the backup
    withholding rules.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A shareholder who does not provide us with its correct taxpayer
    identification number also may be subject to penalties imposed
    by the IRS. Any amount paid as backup withholding will be
    creditable against the shareholder&#146;s income tax liability.
    In addition, we may be required to withhold a portion of capital
    gain distributions to any shareholders who fail to certify their
    non-foreign status to us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Backup withholding will generally not apply to payments of
    dividends made by us or our paying agents, in their capacities
    as such, to a
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    provided that the
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    furnishes to us or our paying agent the required certification
    as to its
    <FONT style="white-space: nowrap">non-U.S.&#160;status,</FONT>
    such as providing a valid IRS
    <FONT style="white-space: nowrap">Form&#160;W-8BEN</FONT>
    or <FONT style="white-space: nowrap">W-8ECI,</FONT>
    or certain other requirements are met. Notwithstanding the
    foregoing, backup withholding may apply if either we or our
    paying agent has actual knowledge, or reason to know, that the
    holder is a U.S.&#160;person that is not an exempt recipient.
    Payments of the net proceeds from a disposition or a redemption
    effected outside the U.S.&#160;by a
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    made by or through a foreign office of a broker generally will
    not be subject to information reporting or backup withholding.
    However, information reporting (but not backup withholding)
    generally will apply to such a payment if the broker has certain
    connections with the U.S.&#160;unless the broker has documentary
    evidence in its records that the beneficial owner is a
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    and specified conditions are met or an exemption is otherwise
    established. Payment of the net proceeds from a disposition by a
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    of common shares made by or through the U.S.&#160;office of a
    broker is generally subject to information reporting and backup
    withholding unless the
    <FONT style="white-space: nowrap">non-U.S.&#160;shareholder</FONT>
    certifies under penalties of perjury that it is not a
    U.S.&#160;person and satisfies certain other requirements, or
    otherwise establishes an exemption from information reporting
    and backup withholding.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Backup withholding is not an additional tax. Any amounts
    withheld under the backup withholding rules may be refunded or
    credited against the shareholder&#146;s federal income tax
    liability if certain required information is furnished to the
    IRS. Shareholders are urged consult their own tax advisors
    regarding application of backup withholding to them and the
    availability of, and procedure for obtaining an exemption from,
    backup withholding.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Other Tax
    Consequences</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Tax
    Aspects of Our Investments in Our Operating Partnership and
    Subsidiary Partnerships</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following discussion summarizes certain federal income tax
    considerations applicable to our direct or indirect investments
    in our operating partnership and any subsidiary partnerships or
    limited liability companies that we form or acquire (each
    individually a &#147;Partnership&#148; and, collectively, the
    &#147;Partnerships&#148;). The discussion does not cover state
    or local tax laws or any federal tax laws other than income tax
    laws.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Classification as Partnerships.</I>&#160;&#160;We will be
    entitled to include in our income our distributive share of each
    Partnership&#146;s income and to deduct our distributive share
    of each Partnership&#146;s losses only if such Partnership is
    classified for federal income tax purposes as a partnership (or
    an entity that is disregarded for federal income tax purposes if
    the entity has only one owner or member) rather than as a
    corporation or an
</DIV>
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    <BR>
    107
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    association taxable as a corporation. An unincorporated entity
    with at least two owners or members will be classified as a
    partnership, rather than as a corporation, for federal income
    tax purposes if it:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    is treated as a partnership under the Treasury regulations
    relating to entity classification (the
    <FONT style="white-space: nowrap">&#147;check-the-box</FONT>
    regulations&#148;);&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    is not a &#147;publicly traded&#148; partnership.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the
    <FONT style="white-space: nowrap">check-the-box</FONT>
    regulations, an unincorporated entity with at least two owners
    or members may elect to be classified either as an association
    taxable as a corporation or as a partnership. If such an entity
    fails to make an election, it generally will be treated as a
    partnership (or an entity that is disregarded for federal income
    tax purposes if the entity has only one owner or member) for
    federal income tax purposes. Each Partnership intends to be
    classified as a partnership for federal income tax purposes and
    no Partnership will elect to be treated as an association
    taxable as a corporation under the
    <FONT style="white-space: nowrap">check-the-box</FONT>
    regulations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A publicly traded partnership is a partnership whose interests
    are traded on an established securities market or are readily
    tradable on a secondary market or the substantial equivalent
    thereof. A publicly traded partnership will not, however, be
    treated as a corporation for any taxable year if, for each
    taxable year beginning after December&#160;31, 1987 in which it
    was classified as a publicly traded partnership, 90% or more of
    the partnership&#146;s gross income for such year consists of
    certain passive-type income, including real property rents,
    gains from the sale or other disposition of real property,
    interest, and dividends, or (the &#147;90% passive income
    exception&#148;). Treasury regulations (the &#147;PTP
    regulations&#148;) provide limited safe harbors from the
    definition of a publicly traded partnership. Pursuant to one of
    those safe harbors (the &#147;private placement
    exclusion&#148;), interests in a partnership will not be treated
    as readily tradable on a secondary market or the substantial
    equivalent thereof if (1)&#160;all interests in the partnership
    were issued in a transaction or transactions that were not
    required to be registered under the Securities Act of 1933, as
    amended, and (2)&#160;the partnership does not have more than
    100 partners at any time during the partnership&#146;s taxable
    year. In determining the number of partners in a partnership, a
    person owning an interest in a partnership, grantor trust, or
    S&#160;corporation that owns an interest in the partnership is
    treated as a partner in such partnership only if
    (1)&#160;substantially all of the value of the owner&#146;s
    interest in the entity is attributable to the entity&#146;s
    direct or indirect interest in the partnership and (2)&#160;a
    principal purpose of the use of the entity is to permit the
    partnership to satisfy the 100-partner limitation. Each
    Partnership is expected to qualify for the private placement
    exclusion in the foreseeable future. Additionally, if our
    operating partnership were a publicly traded partnership, we
    believe that our operating partnership would have sufficient
    qualifying income to satisfy the 90% passive income exception
    and thus would continue to be taxed as a partnership for federal
    income tax purposes.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have not requested, and do not intend to request, a ruling
    from the IRS that the Partnerships will be classified as
    partnerships for federal income tax purposes. If for any reason
    a Partnership were taxable as a corporation, rather than as a
    partnership, for federal income tax purposes, we likely would
    not be able to qualify as a REIT unless we qualified for certain
    relief provisions. See &#147;&#151;&#160;Gross Income
    Tests&#148; and &#147;&#151;&#160;Asset Tests.&#148; In
    addition, any change in a Partnership&#146;s status for tax
    purposes might be treated as a taxable event, in which case we
    might incur tax liability without any related cash distribution.
    See &#147;&#151;&#160;Distribution Requirements.&#148; Further,
    items of income and deduction of such Partnership would not pass
    through to its partners, and its partners would be treated as
    shareholders for tax purposes. Consequently, such Partnership
    would be required to pay income tax at corporate rates on its
    net income, and distributions to its partners would constitute
    dividends that would not be deductible in computing such
    Partnership&#146;s taxable income.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Income
    Taxation of the Partnerships and their Partners</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Partners, Not the Partnerships, Subject to
    Tax.</I>&#160;&#160;A partnership is not a taxable entity for
    federal income tax purposes. Rather, we are required to take
    into account our allocable share of each Partnership&#146;s
    income, gains, losses, deductions, and credits for any taxable
    year of such Partnership ending within or with our taxable year,
    without regard to whether we have received or will receive any
    distribution from such Partnership.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Partnership Allocations.</I>&#160;&#160;Although a
    partnership agreement generally will determine the allocation of
    income and losses among partners, such allocations will be
    disregarded for tax purposes if they do not
</DIV>
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    <BR>
    108
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    comply with the provisions of the federal income tax laws
    governing partnership allocations. If an allocation is not
    recognized for federal income tax purposes, the item subject to
    the allocation will be reallocated in accordance with the
    partners&#146; interests in the partnership, which will be
    determined by taking into account all of the facts and
    circumstances relating to the economic arrangement of the
    partners with respect to such item. Each Partnership&#146;s
    allocations of taxable income, gain, and loss are intended to
    comply with the requirements of the federal income tax laws
    governing partnership allocations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Tax Allocations With Respect to Our
    Properties.</I>&#160;&#160;Income, gain, loss, and deduction
    attributable to appreciated or depreciated property that is
    contributed to a partnership in exchange for an interest in the
    partnership must be allocated in a manner such that the
    contributing partner is charged with, or benefits from,
    respectively, the unrealized gain or unrealized loss associated
    with the property at the time of the contribution. The amount of
    such unrealized gain or unrealized loss (&#147;built-in
    gain&#148; or &#147;built-in loss&#148;) is generally equal to
    the difference between the fair market value of the contributed
    property at the time of contribution and the adjusted tax basis
    of such property at the time of contribution (a &#147;book-tax
    difference&#148;). Any property purchased by our operating
    partnership for cash initially will have an adjusted tax basis
    equal to its fair market value, resulting in no book-tax
    difference. In the future, however, our operating partnership
    may admit partners in exchange for a contribution of appreciated
    or depreciated property, resulting in book-tax differences. Such
    allocations are solely for federal income tax purposes and do
    not affect the book capital accounts or other economic or legal
    arrangements among the partners. The U.S.&#160;Treasury
    Department has issued regulations requiring partnerships to use
    a &#147;reasonable method&#148; for allocating items with
    respect to which there is a book-tax difference and outlining
    several reasonable allocation methods. Under certain available
    methods, the carryover basis of contributed properties in the
    hands of our operating partnership (i)&#160;would cause us to be
    allocated lower amounts of depreciation deductions for tax
    purposes than would be allocated to us if all contributed
    properties were to have a tax basis equal to their fair market
    value at the time of the contribution and (ii)&#160;in the event
    of a sale of such properties, could cause us to be allocated
    taxable gain in excess of the economic or book gain allocated to
    us as a result of such sale, with a corresponding benefit to the
    contributing partners. An allocation described in
    (ii)&#160;above might cause us to recognize taxable income in
    excess of cash proceeds in the event of a sale or other
    disposition of property, which might adversely affect our
    ability to comply with the REIT distribution requirements and
    may result in a greater portion of our distributions being taxed
    as dividends. We have not yet decided what method will be used
    to account for book-tax differences for properties that may be
    acquired by our operating partnership in the future.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Basis in Partnership Interest.</I>&#160;&#160;Our adjusted
    tax basis in our partnership interest in our operating
    partnership generally is equal to:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the amount of cash and the basis of any other property
    contributed by us to our operating partnership;
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    increased by our allocable share of our operating
    partnership&#146;s income and our allocable share of
    indebtedness of our operating partnership;&#160;and
</TD>
</TR>


<TR style="line-height: 3pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    reduced, but not below zero, by our allocable share of our
    operating partnership&#146;s loss and the amount of cash
    distributed to us, and by constructive distributions resulting
    from a reduction in our share of indebtedness of our operating
    partnership.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    If the allocation of our distributive share of our operating
    partnership&#146;s loss would reduce the adjusted tax basis of
    our partnership interest below zero, the recognition of such
    loss will be deferred until such time as the recognition of such
    loss would not reduce our adjusted tax basis below zero. To the
    extent that our operating partnership&#146;s distributions, or
    any decrease in our share of the indebtedness of our operating
    partnership, which is considered a constructive cash
    distribution to the partners, reduce our adjusted tax basis
    below zero, such distributions will constitute taxable income to
    us. Such distributions and constructive distributions normally
    will be characterized as long-term capital gain.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Depreciation Deductions Available to Our Operating
    Partnership.</I>&#160;&#160;To the extent that our operating
    partnership acquired its hotels in exchange for cash, its
    initial basis in such hotels for federal income tax purposes
    generally was or will be equal to the purchase price paid by our
    operating partnership. Our operating partnership generally will
    depreciate such depreciable hotel property for federal income
    tax purposes under the modified accelerated cost recovery system
    of depreciation (&#147;MACRS&#148;). Under MACRS, our operating
    partnership generally will depreciate furnishings and equipment
    over a seven-year recovery period using a 200%
</DIV>
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    <BR>
    109
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
     declining balance method and a half-year convention. If,
    however, our operating partnership places more than 40% of its
    furnishings and equipment in service during the last three
    months of a taxable year, a mid-quarter depreciation convention
    must be used for the furnishings and equipment placed in service
    during that year. Under MACRS, our operating partnership
    generally will depreciate buildings and improvements over a
    <FONT style="white-space: nowrap">39-year</FONT>
    recovery period using a straight line method and a mid-month
    convention. Our operating partnership&#146;s initial basis in
    hotels acquired in exchange for units in our operating
    partnership should be the same as the transferor&#146;s basis in
    such hotels on the date of acquisition by our operating
    partnership. Although the law is not entirely clear, our
    operating partnership generally will depreciate such depreciable
    hotel property for federal income tax purposes over the same
    remaining useful lives and under the same methods used by the
    transferors. Our operating partnership&#146;s tax depreciation
    deductions will be allocated among the partners in accordance
    with their respective interests in our operating partnership,
    except to the extent that our operating partnership is required
    under the federal income tax laws governing partnership
    allocations to use a method for allocating tax depreciation
    deductions attributable to contributed properties that results
    in our receiving a disproportionate share of such deductions.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Sale of a
    Partnership&#146;s Property</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Generally, any gain realized by a Partnership on the sale of
    property held by the Partnership for more than one year will be
    long-term capital gain, except for any portion of such gain that
    is treated as depreciation or cost recovery recapture. Any gain
    or loss recognized by a Partnership on the disposition of
    contributed properties will be allocated first to the partners
    of the Partnership who contributed such properties to the extent
    of their built-in gain or loss on those properties for federal
    income tax purposes. The partners&#146; built-in gain or loss on
    such contributed properties will equal the difference between
    the partners&#146; proportionate share of the book value of
    those properties and the partners&#146; tax basis allocable to
    those properties at the time of the contribution. Any remaining
    gain or loss recognized by the Partnership on the disposition of
    the contributed properties, and any gain or loss recognized by
    the Partnership on the disposition of the other properties, will
    be allocated among the partners in accordance with their
    respective percentage interests in the Partnership.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our share of any gain realized by a Partnership on the sale of
    any property held by the Partnership as inventory or other
    property held primarily for sale to customers in the ordinary
    course of the Partnership&#146;s trade or business will be
    treated as income from a prohibited transaction that is subject
    to a 100% penalty tax. Such prohibited transaction income also
    may have an adverse effect upon our ability to satisfy the
    income tests for REIT status. See &#147;&#151;&#160;Gross Income
    Tests.&#148; We do not presently intend to acquire or hold or to
    allow any Partnership to acquire or hold any property that
    represents inventory or other property held primarily for sale
    to customers in the ordinary course of our or such
    Partnership&#146;s trade or business.
</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Sunset of
    Reduced Tax Rate Provisions</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Several of the tax considerations described herein are subject
    to a sunset provision. The sunset provisions generally provide
    that for taxable years beginning after December&#160;31, 2010,
    certain provisions that are currently in the Code will revert
    back to a prior version of those provisions. These provisions
    include provisions related to the reduced maximum income tax
    rate for long-term capital gains of 15% (rather than 20%) for
    taxpayers taxed at individual rates, the application of the 15%
    tax rate to qualified dividend income, and certain other tax
    rate provisions described herein. The impact of this reversion
    is not discussed herein. Consequently, prospective shareholders
    are urged to consult their own tax advisors regarding the effect
    of sunset provisions on an investment in our common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">State,
    Local and Foreign Taxes</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We <FONT style="white-space: nowrap">and/or</FONT>
    you may be subject to taxation by various states, localities and
    foreign jurisdictions, including those in which we or a
    shareholder transacts business, owns property or resides. The
    state, local and foreign tax treatment may differ from the
    federal income tax treatment described above. Consequently, you
    are urged to consult your own tax advisors regarding the effect
    of state, local and foreign tax laws upon an investment in our
    common shares.
</DIV>
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    <BR>
    110
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<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">ERISA
    CONSIDERATIONS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A fiduciary of a pension, profit sharing, retirement or other
    employee benefit plan, or plan, subject to the Employee
    Retirement Income Security Act of 1974, as amended, or ERISA,
    should consider the fiduciary standards under ERISA in the
    context of the plan&#146;s particular circumstances before
    authorizing an investment of a portion of such plan&#146;s
    assets in the common shares. Accordingly, such fiduciary should
    consider (i)&#160;whether the investment satisfies the
    diversification requirements of Section&#160;404(a)(1)(C) of
    ERISA, (ii)&#160;whether the investment is in accordance with
    the documents and instruments governing the plan as required by
    Section&#160;404(a)(1)(D) of ERISA, and (iii)&#160;whether the
    investment is prudent under ERISA. In addition to the imposition
    of general fiduciary standards of investment prudence and
    diversification, ERISA, and the corresponding provisions of the
    Code, prohibit a wide range of transactions involving the assets
    of the plan and persons who have certain specified relationships
    to the plan (&#147;parties in interest&#148; within the meaning
    of ERISA, &#147;disqualified persons&#148; within the meaning of
    the Code). Thus, a plan fiduciary considering an investment in
    our common shares also should consider whether the acquisition
    or the continued holding of the shares might constitute or give
    rise to a direct or indirect prohibited transaction that is not
    subject to an exemption issued by the Department of Labor, or
    the DOL. Similar restrictions apply to many governmental and
    foreign plans which are not subject to ERISA. Thus, those
    considering investing in the shares on behalf of such a plan
    should consider whether the acquisition or the continued holding
    of the shares might violate any such similar restrictions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The DOL has issued final regulations, or the DOL Regulations, as
    to what constitutes assets of an employee benefit plan under
    ERISA. Under the DOL Regulations, if a plan acquires an equity
    interest in an entity, which interest is neither a
    &#147;publicly offered security&#148; nor a security issued by
    an investment company registered under the Investment Company
    Act of 1940, as amended, the plan&#146;s assets would include,
    for purposes of the fiduciary responsibility provision of ERISA,
    both the equity interest and an undivided interest in each of
    the entity&#146;s underlying assets unless certain specified
    exceptions apply. The DOL Regulations define a publicly offered
    security as a security that is &#147;widely held,&#148;
    &#147;freely transferable,&#148; and either part of a class of
    securities registered under the Exchange Act, or sold pursuant
    to an effective registration statement under the Securities Act
    (provided the securities are registered under the Exchange Act
    within 120&#160;days after the end of the fiscal year of the
    issuer during which the public offering occurred). The shares
    are being sold in an offering registered under the Securities
    Act and will be registered under the Exchange Act.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The DOL Regulations provide that a security is &#147;widely
    held&#148; only if it is part of a class of securities that is
    owned by 100 or more investors independent of the issuer and of
    one another. A security will not fail to be &#147;widely
    held&#148; because the number of independent investors falls
    below 100 subsequent to the initial public offering as a result
    of events beyond the issuer&#146;s control. We expect our common
    shares to be &#147;widely held&#148; upon completion of this
    offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The DOL Regulations provide that whether a security is
    &#147;freely transferable&#148; is a factual question to be
    determined on the basis of all relevant facts and circumstances.
    The DOL Regulations further provide that when a security is part
    of an offering in which the minimum investment is $10,000 or
    less, as is the case with this offering, certain restrictions
    ordinarily will not, alone or in combination, affect the finding
    that such securities are &#147;freely transferable.&#148; We
    believe that the restrictions imposed under our declaration of
    trust on the transfer of our shares are limited to the
    restrictions on transfer generally permitted under the DOL
    Regulations and are not likely to result in the failure of the
    common shares to be &#147;freely transferable.&#148; The DOL
    Regulations only establish a presumption in favor of the finding
    of free transferability, and, therefore, no assurance can be
    given that the DOL will not reach a contrary conclusion.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Assuming that the common shares will be &#147;widely held&#148;
    and &#147;freely transferable,&#148; we believe that our common
    shares will be publicly offered securities for purposes of the
    DOL Regulations and that our assets will not be deemed to be
    &#147;plan assets&#148; of any plan that invests in our common
    shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each holder of our common shares will be deemed to have
    represented and agreed that its purchase and holding of such
    common shares (or any interest therein) will not constitute or
    result in a non-exempt prohibited transaction under ERISA or
    Section&#160;4975 of the Code.
</DIV>
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    <BR>
    111
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<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">UNDERWRITING</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Merrill Lynch, Pierce, Fenner&#160;&#038; Smith Incorporated,
    Raymond James&#160;&#038; Associates, Inc. and Wells Fargo
    Securities, LLC are acting as representatives of each of the
    underwriters named below. Subject to the terms and conditions
    set forth in a purchase agreement among us, our operating
    partnership and the underwriters, we have agreed to sell to the
    underwriters, and each of the underwriters has agreed, severally
    and not jointly, to purchase from us, the number of common
    shares set forth opposite its name below.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>


<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
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<TR style="font-size: 1pt" valign="bottom">
    <TD width="87%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
    <B>Number<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Underwriter</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>of Shares</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -52pt; margin-left: 52pt">
    Merrill Lynch, Pierce, Fenner&#160;&#038; Smith<BR>
    Incorporated
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;&#160;&#160;&#160;&#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Raymond James&#160;&#038; Associates, Inc.&#160;
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Wells Fargo Securities, LLC
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Calyon Securities (USA) Inc.
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    RBC Capital Markets Corporation
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 62pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    17,500,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Subject to the terms and conditions set forth in the purchase
    agreement, the underwriters have agreed, severally and not
    jointly, to purchase all of the shares sold under the purchase
    agreement if any of these shares are purchased. If an
    underwriter defaults, the purchase agreement provides that the
    purchase commitments of the nondefaulting underwriters may be
    increased or the purchase agreement may be terminated.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have agreed to indemnify the underwriters against certain
    liabilities, including liabilities under the Securities Act, or
    to contribute to payments the underwriters may be required to
    make in respect of those liabilities.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriters are offering the shares, subject to prior sale,
    when, as and if issued to and accepted by them, subject to
    approval of legal matters by their counsel, including the
    validity of the shares, and other conditions contained in the
    purchase agreement, such as the receipt by the underwriters of
    officer&#146;s certificates and legal opinions. The underwriters
    reserve the right to withdraw, cancel or modify offers to the
    public and to reject orders in whole or in part.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Commissions
    and Discounts</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The representatives have advised us that the underwriters
    propose initially to offer the shares to the public at the
    public offering price set forth on the cover page of this
    prospectus and to dealers at that price less a concession not in
    excess of $&#160;&#160;&#160;&#160;&#160; per share. The
    underwriters may allow, and the dealers may reallow, a discount
    not in excess of $&#160;&#160;&#160;&#160;&#160; per share to
    other dealers. After the initial offering, the public offering
    price, concession or any other term of this offering may be
    changed.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table shows the public offering price,
    underwriting discount and proceeds, before expenses, to us. The
    information assumes either no exercise or full exercise by the
    underwriters of their overallotment option.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>


<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="59%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=03 type=lead -->
    <TD width="12%" align="right">&nbsp;</TD>	<!-- colindex=03 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=03 type=hang1 -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=04 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=04 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=04 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Per Share</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Without Option</B>
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>With Option</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Public offering price
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Underwriting discount(1)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Proceeds, before expenses, to us
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="center" valign="bottom">

</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD align="right" valign="top">
    <FONT style="font-size: 8pt">(1)
    </FONT></TD>
    <TD></TD>
    <TD valign="bottom">
    <FONT style="font-size: 8pt">At the closing of this offering,
    the underwriters will be entitled to receive
    $&#160;&#160;&#160;&#160;&#160; from us for each share sold in
    this offering. The underwriters will forego the receipt of
    payment of $&#160;&#160;&#160;&#160;&#160; per share, until such
    time as we purchase assets in accordance with our investment
    strategy as described in this prospectus with an aggregate
    purchase price (including the amount of any outstanding
    indebtedness assumed or incurred by us) at least equal to the
    net proceeds from this offering (after deducting the full
    underwriting discount and other estimated offering expenses
    payable by us), at which time, we have agreed to pay the
    underwriters an amount equal to $&#160;&#160;&#160;&#160;&#160;
    per share sold in this offering.
    </FONT></TD>
</TR>

</TABLE>

<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    112
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table presents information about the underwriting
    discount, payable by us:
</DIV>


<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>


<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="90%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="2" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Per Share</B>
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Public offering price
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;$
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Underwriting discount paid by us at closing ( %)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;$
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Underwriting discount paid by us upon purchase of assets with a
    purchase price described above ( %)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;$
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total underwriting discount paid by us ( %)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    &#160;$
</TD>
<TD nowrap align="right" valign="bottom">
    &#160;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Deferral by the underwriters of a portion of the underwriting
    discount reduces the underwriting discount immediately payable
    by us at closing. However, once we purchase assets with an
    aggregate purchase price at least equal to the net proceeds from
    this offering, as described above, we will pay the underwriters
    the deferred amount. By deferring a portion of the underwriting
    discount, full payment will only occur when we have purchased
    assets with the specified aggregate purchase price, instead of
    at the closing when we have not yet invested any of the proceeds
    raised in this offering.
</DIV>



<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The expenses of this offering, not including the underwriting
    discount, are estimated at $1,400,000 and are payable by us.
</DIV>


<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Overallotment
    Option</FONT></B>
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have granted an option to the underwriters to purchase up to
    2,625,000&#160;additional shares at the public offering price,
    less the underwriting discount. The underwriters may exercise
    this option for 30&#160;days from the date of this prospectus
    solely to cover any overallotments. If the underwriters exercise
    this option, each will be obligated, subject to conditions
    contained in the purchase agreement, to purchase a number of
    additional shares proportionate to that underwriter&#146;s
    initial amount reflected in the above table.
</DIV>


<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Purchases
    by Trustees, Officers and Employees</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At our request, the underwriters have
    reserved&#160;&#160;&#160;&#160;&#160; of the shares offered by
    this prospectus for sale to our trustees, officers, employees
    and certain other persons associated with us at the public
    offering price set forth on the cover page of this prospectus.
    These persons must commit to purchase from an underwriter or
    selected dealer at the same time as the general public. The
    number of shares available for sale to the general public will
    be reduced to the extent these persons purchase the reserved
    shares. Any reserved shares purchased by our trustees or
    executive officers or by any of our employees in this offering
    will be subject to the lock-up agreements described below. We
    are not making loans to any of our trustees, employees or other
    persons to purchase such shares.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">No Sales
    of Similar Securities</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We, our executive officers and our trustees have agreed not to
    sell or transfer any common shares or securities convertible
    into, exchangeable for, exercisable for, or repayable with
    common shares, for 180&#160;days after the date of this
    prospectus without first obtaining the written consent of the
    representatives. Specifically, we and these other persons have
    agreed, with certain limited exceptions, not to directly or
    indirectly
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    offer, pledge, sell or contract to sell any common shares,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    sell any option or contract to purchase any common shares,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    purchase any option or contract to sell any common shares,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    grant any option, right or warrant for the sale of any common
    shares,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    lend or otherwise dispose of or transfer any common shares,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    request or demand that we file a registration statement related
    to the common shares,&#160;or
</TD>
</TR>

</TABLE>
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    <BR>
    113
</DIV><!-- END PAGE WIDTH -->
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    enter into any swap or other agreement that transfers, in whole
    or in part, the economic consequence of ownership of any common
    shares whether any such swap or transaction is to be settled by
    delivery of shares or other securities, in cash or otherwise.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This <FONT style="white-space: nowrap">lock-up</FONT>
    provision applies to common shares and to securities convertible
    into or exchangeable or exercisable for or repayable with common
    shares. It also applies to common shares owned now or acquired
    later by the person executing the agreement or for which the
    person executing the agreement later acquires the power of
    disposition. In the event that either (x)&#160;during the last
    17&#160;days of
    <FONT style="white-space: nowrap">lock-up</FONT>
    period referred to above, we issue an earnings release or
    material news or a material event relating to us occurs or
    (y)&#160;prior to the expiration of the
    <FONT style="white-space: nowrap">lock-up</FONT>
    period, we announce that we will release earnings results or
    become aware that material news or a material event will occur
    during the
    <FONT style="white-space: nowrap">16-day</FONT>
    period beginning on the last day of the
    <FONT style="white-space: nowrap">lock-up</FONT>
    period, the restrictions described above shall continue to apply
    until the expiration of the
    <FONT style="white-space: nowrap">18-day</FONT>
    period beginning on the issuance of the earnings release or the
    occurrence of the material news or material event.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">New York
    Stock Exchange Listing</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect to apply for listing of our common shares on the NYSE
    under the symbol &#147;PEB.&#148; In order to meet the
    requirements for listing on that exchange, the underwriters will
    undertake to sell a minimum number of shares to a minimum number
    of beneficial owners as required by that exchange.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Before this offering, there has been no public market for our
    common shares. The initial public offering price will be
    determined through negotiations between us and the
    representatives. In addition to prevailing market conditions,
    the factors to be considered in determining the initial public
    offering price are
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="7%"></TD>
    <TD width="6%"></TD>
    <TD width="87%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the valuation multiples of publicly traded companies that the
    representatives believe to be comparable to us,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    our financial information,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the history of, and the prospects for, our company and the
    industry in which we compete,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    an assessment of our management, its past and present
    operations, and the prospects for, and timing of, our future
    revenues,
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the present state of our development,&#160;and
</TD>
</TR>


<TR style="line-height: 6pt; font-size: 1pt"><TD>&nbsp;</TD></TR>


<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    &#149;&#160;&#160;&#160;&#160;&#160;
</TD>
    <TD align="left">
    the above factors in relation to market values and various
    valuation measures of other companies engaged in activities
    similar to ours.
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    An active trading market for the shares may not develop. It is
    also possible that after this offering the shares will not trade
    in the public market at or above the initial public offering
    price.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriters do not expect to sell more than 5% of the
    shares in the aggregate to accounts over which they exercise
    discretionary authority.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Price
    Stabilization, Short Positions and Penalty Bids</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Until the distribution of the shares is completed, SEC rules may
    limit underwriters and selling group members from bidding for
    and purchasing our common shares. However, the representatives
    may engage in transactions that stabilize the price of the
    common shares, such as bids or purchases to peg, fix or maintain
    that price.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with this offering, the underwriters may purchase
    and sell our common shares in the open market. These
    transactions may include short sales, purchases on the open
    market to cover positions created by short sales and stabilizing
    transactions. Short sales involve the sale by the underwriters
    of a greater number of shares than they are required to purchase
    in this offering. &#147;Covered&#148; short sales are sales made
    in an amount not greater than the underwriters&#146;
    overallotment option. The underwriters may close out any covered
    short position by either exercising their overallotment option
    or purchasing shares in the open market. In determining the
    source of shares to close out the covered short position, the
    underwriters will consider,
</DIV>
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    <BR>
    114
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    among other things, the price of shares available for purchase
    in the open market as compared to the price at which they may
    purchase shares through the overallotment option.
    &#147;Naked&#148; short sales are sales in excess of the
    overallotment option. The underwriters must close out any naked
    short position by purchasing shares in the open market. A naked
    short position is more likely to be created if the underwriters
    are concerned that there may be downward pressure on the price
    of our common shares in the open market after pricing that could
    adversely affect investors who purchase in this offering.
    Stabilizing transactions consist of various bids for or
    purchases of common shares made by the underwriters in the open
    market prior to the completion of this offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The underwriters may also impose a penalty bid. This occurs when
    a particular underwriter repays to the underwriters a portion of
    the underwriting discount received by it because the
    representatives have repurchased shares sold by or for the
    account of such underwriter in stabilizing or short covering
    transactions.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Similar to other purchase transactions, the underwriters&#146;
    purchases to cover the syndicate short sales may have the effect
    of raising or maintaining the market price of our common shares
    or preventing or retarding a decline in the market price of our
    common shares. As a result, the price of our common shares may
    be higher than the price that might otherwise exist in the open
    market.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Neither we nor any of the underwriters make any representation
    or prediction as to the direction or magnitude of any effect
    that the transactions described above may have on the price of
    our common shares. In addition, neither we nor any of the
    underwriters make any representation that the representatives
    will engage in these transactions or that these transactions,
    once commenced, will not be discontinued without notice.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Electronic
    Offer, Sale and Distribution of Shares</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In connection with this offering, certain of the underwriters or
    securities dealers may distribute prospectuses by electronic
    means, such as
    <FONT style="white-space: nowrap">e-mail.</FONT> In
    addition, Merrill Lynch, Pierce, Fenner&#160;&#038; Smith
    Incorporated may facilitate Internet distribution for this
    offering to certain of its Internet subscription customers.
    Merrill Lynch, Pierce, Fenner&#160;&#038; Smith Incorporated may
    allocate a limited number of shares for sale to its online
    brokerage customers. An electronic prospectus is available on
    the Internet website maintained by Merrill Lynch, Pierce,
    Fenner&#160;&#038; Smith Incorporated. Other than the prospectus
    in electronic format, the information on the Merrill Lynch,
    Pierce, Fenner&#160;&#038; Smith Incorporated website is not
    part of this prospectus.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Other
    Relationships</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Some of the underwriters and their affiliates may in the future
    engage in investment banking and other commercial dealings in
    the ordinary course of business with us or our affiliates and
    they may receive customary fees and commissions for these
    transactions.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Notice to
    Prospective Investors in the EEA</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In relation to each Member State of the European Economic Area
    which has implemented the Prospectus Directive (each, a
    &#147;Relevant Member State&#148;) an offer to the public of any
    shares which are the subject of this offering contemplated by
    this prospectus may not be made in that Relevant Member State,
    except that an offer to the public in that Relevant Member State
    of any shares may be made at any time under the following
    exemptions under the Prospectus Directive, if they have been
    implemented in that Relevant Member State:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;to legal entities which are authorized or regulated to
    operate in the financial markets or, if not so authorized or
    regulated, whose corporate purpose is solely to invest in
    securities;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;to any legal entity which has two or more of
    (1)&#160;an average of at least 250&#160;employees during the
    last financial year; (2)&#160;a total balance sheet of more than
    &#128;43,000,000 and (3)&#160;an annual net turnover of more
    than &#128;50,000,000, as shown in its last annual or
    consolidated accounts;
</DIV>
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    <BR>
    115
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<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;by the underwriters to fewer than 100 natural or legal
    persons (other than &#147;qualified investors&#148; as defined
    in the Prospectus Directive) subject to obtaining the prior
    consent of the representatives for any such offer;&#160;or
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (d)&#160;in any other circumstances falling within
    Article&#160;3(2) of the Prospectus Directive;
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    provided that no such offer of shares shall result in a
    requirement for the publication by us or any representative of a
    prospectus pursuant to Article&#160;3 of the Prospectus
    Directive.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Any person making or intending to make any offer of shares
    within the EEA should only do so in circumstances in which no
    obligation arises for us or any of the underwriters to produce a
    prospectus for such offer. Neither we nor the underwriters have
    authorized, nor do they authorize, the making of any offer of
    shares through any financial intermediary, other than offers
    made by the underwriters which constitute the final offering of
    shares contemplated in this prospectus.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    For the purposes of this provision, and your representation
    below, the expression an &#147;offer to the public&#148; in
    relation to any shares in any Relevant Member State means the
    communication in any form and by any means of sufficient
    information on the terms of the offer and any shares to be
    offered so as to enable an investor to decide to purchase any
    shares, as the same may be varied in that Relevant Member State
    by any measure implementing the Prospectus Directive in that
    Relevant Member State and the expression &#147;Prospectus
    Directive&#148; means Directive 2003/71/EC and includes any
    relevant implementing measure in each Relevant Member State.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Each person in a Relevant Member State who receives any
    communication in respect of, or who acquires any shares under,
    the offer of shares contemplated by this prospectus will be
    deemed to have represented, warranted and agreed to and with us
    and each underwriter that:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;it is a &#147;qualified investor&#148; within the
    meaning of the law in that Relevant Member State implementing
    Article&#160;2(1)(e) of the Prospectus Directive;&#160;and
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;in the case of any shares acquired by it as a financial
    intermediary, as that term is used in Article&#160;3(2) of the
    Prospectus Directive, (i)&#160;the shares acquired by it in this
    offering have not been acquired on behalf of, nor have they been
    acquired with a view to their offer or resale to, persons in any
    Relevant Member State other than &#147;qualified investors&#148;
    (as defined in the Prospectus Directive), or in circumstances in
    which the prior consent of the representatives has been given to
    the offer or resale; or (ii)&#160;where shares have been
    acquired by it on behalf of persons in any Relevant Member State
    other than qualified investors, the offer of those shares to it
    is not treated under the Prospectus Directive as having been
    made to such persons.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Notice to
    Prospective Investors in Switzerland</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have not and will not register with the Swiss Financial
    Market Supervisory Authority (FINMA) as a foreign collective
    investment scheme pursuant to Article&#160;119 of the Federal
    Act on Collective Investment Scheme of 23&#160;June 2006, as
    amended (CISA), and accordingly the shares being offered
    pursuant to this prospectus have not and will not be approved,
    and may not be licenseable, with FINMA. Therefore, the shares
    have not been authorized for distribution by FINMA as a foreign
    collective investment scheme pursuant to Article&#160;119 CISA
    and the shares offered hereby may not be offered to the public
    (as this term is defined in Article&#160;3 CISA) in or from
    Switzerland. The shares may solely be offered to &#147;qualified
    investors,&#148; as this term is defined in Article&#160;10
    CISA, and in the circumstances set out in Article&#160;3 of the
    Ordinance on Collective Investment Scheme of 22&#160;November
    2006, as amended (CISA), such that there is no public offer.
    Investors, however, do not benefit from protection under CISA or
    supervision by FINMA. This prospectus and any other materials
    relating to the shares are strictly personal and confidential to
    each offeree and do not constitute an offer to any other person.
    This prospectus may only be used by those qualified investors to
    whom it has been handed out in connection with the offer
    described herein and may neither directly or indirectly be
    distributed or made available to any person or entity other than
    its recipients. It may not be used in connection with any other
    offer and shall in particular not be copied
    <FONT style="white-space: nowrap">and/or</FONT>
    distributed to the public in Switzerland or from Switzerland.
    This prospectus does not constitute an issue prospectus as that
    term is understood pursuant to Article&#160;652a
    <FONT style="white-space: nowrap">and/or</FONT>
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    116
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    1156 of the Swiss Federal Code of Obligations. We have not
    applied for a listing of the shares on the SIX Swiss Exchange or
    any other regulated securities market in Switzerland, and
    consequently, the information presented in this prospectus does
    not necessarily comply with the information standards set out in
    the listing rules of the SIX Swiss Exchange and corresponding
    prospectus schemes annexed to the listing rules of the SIX Swiss
    Exchange.
</DIV>

<DIV style="margin-top: 9pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Notice to
    Prospective Investors in the Dubai International Financial
    Centre</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This document relates to an exempt offer in accordance with the
    Offered Securities Rules of the Dubai Financial Services
    Authority. This document is intended for distribution only to
    persons of a type specified in those rules. It must not be
    delivered to, or relied on by, any other person. The Dubai
    Financial Services Authority has no responsibility for reviewing
    or verifying any documents in connection with exempt offers. The
    Dubai Financial Services Authority has not approved this
    document nor taken steps to verify the information set out in
    it, and has no responsibility for it. The shares which are the
    subject of this offering contemplated by this prospectus may be
    illiquid
    <FONT style="white-space: nowrap">and/or</FONT>
    subject to restrictions on their resale. Prospective purchasers
    of the shares offered should conduct their own due diligence on
    the shares. If you do not understand the contents of this
    document you should consult an authorised financial adviser.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">Notice to
    Prospective Investors in Korea</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    This prospectus should not be construed in any way as our (or
    any of our affiliates or agents) soliciting investment or
    offering to sell our shares in the Republic of Korea
    (&#147;Korea&#148;). We are not making any representation with
    respect to the eligibility of any recipients of this prospectus
    to acquire the shares under the laws of Korea, including,
    without limitation, the Financial Investment Services and
    Capital Markets Act (the &#147;FSCMA&#148;), the Foreign
    Exchange Transaction Act (the &#147;FETA&#148;), and any
    regulations thereunder. The shares have not been registered with
    the Financial Services Commission of Korea (the &#147;FSC&#148;)
    in any way pursuant to the FSCMA, and the shares may not be
    offered, sold or delivered, or offered or sold to any person for
    reoffering or resale, directly or indirectly, in Korea or to any
    resident of Korea except pursuant to applicable laws and
    regulations of Korea. Furthermore, the shares may not be resold
    to any Korean resident unless such Korean resident as the
    purchaser of the resold shares complies with all applicable
    regulatory requirements (including, without limitation,
    reporting or approval requirements under the FETA and
    regulations thereunder) relating to the purchase of the resold
    shares.
</DIV>

<A name='120'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">LEGAL
    MATTERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Certain legal matters in connection with this offering will be
    passed upon for us by Hunton&#160;&#038; Williams LLP. Venable
    LLP, Baltimore, Maryland, will issue an opinion to us regarding
    certain matters of Maryland law, including the validity of the
    common shares offered by this prospectus. Sidley Austin LLP, New
    York, New York, will act as counsel to the underwriters.
</DIV>

<A name='121'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">EXPERTS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The balance sheet of Pebblebrook Hotel Trust as of
    October&#160;7, 2009, has been included herein and in the
    registration statement in reliance upon the report of KPMG LLP,
    independent registered public accounting firm, appearing
    elsewhere herein, and upon the authority of said firm as experts
    in accounting and auditing.
</DIV>

<A name='122'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">WHERE YOU
    CAN FIND MORE INFORMATION</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have filed with the SEC a registration statement on
    <FONT style="white-space: nowrap">Form&#160;S-11,</FONT>
    including exhibits and schedules filed with this registration
    statement, under the Securities Act of 1933, as amended, with
    respect to our common shares to be sold in this offering. This
    prospectus does not contain all of the information set forth in
    the registration statement and exhibits and schedules to the
    registration statement. For further information with respect to
    our company and our common shares to be sold in this offering,
    reference is made to the registration statement, including the
    exhibits and schedules to the registration statement. Statements
    contained in this prospectus as to the contents of any contract
    or other document referred to in this prospectus are not
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    117
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    necessarily complete and, where that contract is an exhibit to
    the registration statement, each statement is qualified in all
    respects by reference to the exhibit to which the reference
    relates. Copies of the registration statement, including the
    exhibits and schedules to the registration statement, may be
    examined without charge at the public reference room of the
    Securities and Exchange Commission, 100&#160;F&#160;Street,
    N.E., Room&#160;1580, Washington, DC 20549. Information about
    the operation of the public reference room may be obtained by
    calling the SEC at
    <FONT style="white-space: nowrap">1-800-SEC-0300.</FONT>
    Copies of all or a portion of the registration statement can be
    obtained from the public reference room of the SEC upon payment
    of prescribed fees. Our SEC filings, including our registration
    statement, are also available to you on the SEC&#146;s website
    www.sec.gov.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As a result of this offering, we will become subject to the
    information and reporting requirements of the Securities
    Exchange Act of 1934, as amended, and will file periodic reports
    and proxy statements and will make available to our shareholders
    quarterly reports for the first three quarters of each fiscal
    year containing unaudited interim financial information.
</DIV>

<A name='123'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">REPORTS
    TO SHAREHOLDERS</FONT></B>
</DIV>
</A>
<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will furnish our shareholders with annual reports containing
    consolidated financial statements audited by our independent
    certified public accountants.
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    118
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='124'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">INDEX TO
    FINANCIAL STATEMENTS</FONT></B>
</DIV>
</A>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="95%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadleft -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=quadright -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD colspan="3" nowrap align="center" valign="bottom" style="border-bottom: 1px solid #000000">
    <B>Page</B>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#300'>Report of independent registered public
    accounting firm</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    F-2
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#301'>Balance sheet as of October&#160;7, 2009</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    F-3
</TD>
<TD>&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <A HREF='#302'>Notes to balance sheet</A>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD>&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    F-4
</TD>
<TD>&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-1
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<A name='300'>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM</FONT></B>
</DIV>
</A>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Board of Trustees and Shareholder
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pebblebrook Hotel Trust:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have audited the accompanying balance sheet of Pebblebrook
    Hotel Trust (the &#147;Company&#148;) as of October&#160;7,
    2009. This financial statement is the responsibility of the
    Company&#146;s management. Our responsibility is to express an
    opinion on the financial statement based on our audit.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We conducted our audit in accordance with the standards of the
    Public Company Accounting Oversight Board (United States). Those
    standards require that we plan and perform the audit to obtain
    reasonable assurance about whether the financial statement is
    free of material misstatement. An audit includes examining, on a
    test basis, evidence supporting the amounts and disclosures in
    the financial statement. An audit also includes assessing the
    accounting principles used and significant estimates made by
    management, as well as evaluating the overall financial
    statement presentation. We believe that our audit provides a
    reasonable basis for our opinion.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In our opinion, the balance sheet referred to above presents
    fairly, in all material respects, the financial position of
    Pebblebrook Hotel Trust as of October&#160;7, 2009, in
    conformity with U.S.&#160;generally accepted accounting
    principles.
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;<FONT style="font-variant: SMALL-CAPS">KPMG
    LLP</FONT></DIV>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    McLean, Virginia
</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    November&#160;9, 2009
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-2
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PEBBLEBROOK
    HOTEL TRUST<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">


    <A name='301'><B><FONT style="font-family: 'Times New Roman', Times">BALANCE
    SHEET<BR>
    </FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    </A><B><FONT style="font-family: 'Times New Roman', Times">October&#160;7,
    2009</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="93%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="3%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD colspan="5" align="center" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>ASSETS</B>
</DIV>
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Cash
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total assets
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="line-height: 9pt">
<TD colspan="5">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="5" align="center" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>LIABILITIES AND SHAREHOLDERS&#146; EQUITY</B>
</DIV>
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Liabilities:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total liabilities
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    &#151;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    <B>Shareholders&#146; Equity:</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Common shares, $0.01&#160;par value per share; 1,000&#160;shares
    authorized; 1,000&#160;shares issued and outstanding
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Additional
    <FONT style="white-space: nowrap">paid-in-capital</FONT>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    990
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total shareholders&#146; equity
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    1,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total liabilities and shareholders&#146; equity
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The accompanying notes are an integral part of this financial
    statement.
</DIV>
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    <BR>
    F-3
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
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<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PEBBLEBROOK
    HOTEL TRUST<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">


    <A name='302'><B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    BALANCE SHEET<BR>
    </FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    </A><B><FONT style="font-family: 'Times New Roman', Times">October&#160;7,
    2009</FONT></B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">1.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Organization</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pebblebrook Hotel Trust (the &#147;Company&#148;) was formed as
    a Maryland real estate investment trust on October&#160;2, 2009.
    The Company is internally managed and was organized to
    opportunistically acquire and invest in hotel properties located
    primarily in major United States cities, with an emphasis on
    major coastal markets.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company has no assets other than cash and has not yet
    commenced operations. The Company has not entered into any
    contracts to acquire hotel properties or other assets. The
    Company is in the process of forming a subsidiary, Pebblebrook
    Hotel Limited Partnership (the &#147;Operating
    Partnership&#148;). The Company will be the sole general partner
    of the Operating Partnership and plans to conduct substantially
    all of its business through the Operating Partnership following
    its formation.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">2.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Summary
    of Significant Accounting Policies</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Below is a discussion of significant accounting policies as the
    Company prepares to commence operations and acquire hotel assets:
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Basis
    of Presentation</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The balance sheet includes all of the accounts of the Company as
    of October&#160;7, 2009, presented in accordance with
    U.S.&#160;generally accepted accounting principles.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Use of
    Estimates</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The preparation of the financial statement in conformity with
    U.S.&#160;generally accepted accounting principles requires
    management to make estimates and assumptions that affect the
    reported amounts of assets and liabilities and disclosure of
    contingent assets and liabilities at the date of the financial
    statements. Actual results could differ from those estimates.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Hotel
    Properties</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Acquisitions and Property Improvements.</I>&#160;&#160;Upon
    acquisition, we allocate the purchase price based on the fair
    value of the acquired land, building, furniture, fixtures and
    equipment, identifiable intangible assets, other assets and
    assumed liabilities. Identifiable intangible assets typically
    arise from contractual arrangements. We determine the
    acquisition-date fair values of all assets and assumed
    liabilities using methods similar to those used by independent
    appraisers (<I>e.g.</I>, discounted cash flow analysis) and that
    utilize appropriate discount
    <FONT style="white-space: nowrap">and/or</FONT>
    capitalization rates and available market information. Estimates
    of future cash flows are based on a number of factors including
    historical operating results, known and anticipated trends, and
    market and economic conditions. Acquisition costs are expensed
    as incurred.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Hotel renovations
    <FONT style="white-space: nowrap">and/or</FONT>
    replacements of assets that improve or extend the life of the
    asset are capitalized and depreciated over their estimated
    useful lives. Furniture, fixtures and equipment under capital
    leases are carried at the present value of the minimum lease
    payments.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Repair and maintenance costs are charged to expense as incurred.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Depreciation and Amortization.</I>&#160;&#160;Hotel
    properties are carried at cost and depreciated using the
    straight-line method over an estimated useful life of 25 to
    40&#160;years for buildings and one to 10&#160;years for
    furniture, fixtures and equipment. Intangible assets arising
    from contractual arrangements are typically amortized over the
    life of the contract.
</DIV>
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    <BR>
    F-4
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PEBBLEBROOK
    HOTEL TRUST<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    BALANCE SHEET&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We are required to make subjective assessments as to the useful
    lives and classification of our properties for purposes of
    determining the amount of depreciation expense to reflect each
    year with respect to the assets. These assessments may impact
    our results of operations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <I>Impairment.</I>&#160;&#160;We monitor events and changes in
    circumstances for indicators that the carrying value of the
    hotel and related assets may be impaired. We will prepare an
    estimate of the undiscounted future cash flows, without interest
    charges, of the specific hotel and determine if the investment
    in such hotel is recoverable based on the undiscounted future
    cash flows. If impairment is indicated, an adjustment is made to
    the carrying value of the hotel to reflect the hotel at fair
    value. These assessments may impact the results of our
    operations.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    A hotel is considered held for sale when a contract for sale is
    entered into, a substantial, non-refundable deposit has been
    committed by the purchaser, and sale is expected to close.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Cash
    and Cash Equivalents</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company considers all highly liquid investments with an
    original maturity of three months or less to be cash equivalents.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Revenue
    Recognition</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Revenue consists of amounts derived from hotel operations,
    including the sales of rooms, food and beverage, and other
    ancillary amenities. Revenue is recognized when rooms are
    occupied and services have been rendered. These revenue sources
    are affected by conditions impacting the travel and hospitality
    industry as well as competition from other hotels and businesses
    in similar markets.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Income
    Taxes</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company has elected to be taxed as a pass-through entity
    under subchapter S of the Internal Revenue Code, but intends to
    revoke the subchapter S election on the business day prior to
    the closing of a proposed offering of common shares to the
    public. The Company intends to elect to be taxed as a real
    estate investment trust (&#147;REIT&#148;) for federal income
    tax purposes commencing with a short taxable year beginning on
    the date of the revocation of the subchapter S election and
    ending on December&#160;31, 2009. The Company expects to have
    little or no taxable income prior to electing REIT status. To
    qualify as a REIT, the Company must meet certain organizational
    and operational requirements, including a requirement to
    distribute at least 90% of the Company&#146;s annual REIT
    taxable income to its shareholders (which is computed without
    regard to the dividends paid deduction or net capital gain and
    which does not necessarily equal net income as calculated in
    accordance with U.S.&#160;generally accepted accounting
    principals). As a REIT, the Company generally will not be
    subject to federal income tax to the extent it distributes
    qualifying dividends to its shareholders. If the Company fails
    to qualify as a REIT in any taxable year, it will be subject to
    federal income tax on its taxable income at regular corporate
    income tax rates and generally will not be permitted to qualify
    for treatment as a REIT for federal income tax purposes for the
    four taxable years following the year during which qualification
    is lost unless the Internal Revenue Service grants the Company
    relief under certain statutory provisions. Such an event could
    materially adversely affect the Company&#146;s net income and
    net cash available for distribution to shareholders. However,
    the Company intends to organize and operate in such a manner as
    to qualify for treatment as a REIT.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Share-based
    Compensation</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have adopted an equity incentive plan that provides for the
    grant of common share options, share awards, share appreciation
    rights, performance units, LTIP units and other equity-based
    awards. Equity-based compensation is recognized as an expense in
    the financial statements and measured at the fair value of the
    award
</DIV>
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    <BR>
    F-5
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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PEBBLEBROOK
    HOTEL TRUST<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    BALANCE SHEET&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>
<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
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<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    on the date of grant. The amount of the expense may be subject
    to adjustment in future periods depending on the specific
    characteristics of the equity-based award and the application of
    the accounting guidance.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    As of October&#160;7, 2009, the Company has not granted or
    issued any share based awards.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Organizational
    and Offering Costs</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company expenses organization costs as incurred and offering
    costs, which include selling commissions, will be deferred and
    charged to shareholders&#146; equity.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Recently
    Issued Accounting Standards</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In May 2009, the Financial Accounting Standards Board
    (&#147;FASB&#148;) issued an accounting standard that
    establishes general standards of accounting for and disclosure
    of events that occur after the balance sheet date but before
    financial statements are issued or are available to be issued.
    It requires the disclosure of the date through which an entity
    has evaluated subsequent events and the basis for that date. It
    also requires public entities to evaluate subsequent events
    through the date that the financial statements are issued. The
    adoption of this accounting standard did not have a material
    impact on the Company&#146;s financial statements.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In June 2009, the FASB issued an accounting standard that
    requires enterprises to perform a more qualitative approach to
    determining whether or not a variable interest entity will need
    to be consolidated. This evaluation will be based on an
    enterprise&#146;s ability to direct and influence the activities
    of a variable interest entity that most significantly impact its
    economic performance. It requires ongoing reassessments of
    whether an enterprise is the primary beneficiary of a variable
    interest entity. This accounting standard is effective for
    fiscal years beginning after November&#160;15, 2009. Early
    adoption is not permitted. The Company is currently evaluating
    the impact of this accounting standard.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    In June 2009, the FASB issued an accounting standard that made
    the FASB Accounting Standards Codification (the
    &#147;Codification&#148;) the source of authoritative GAAP
    recognized by the FASB to be applied by nongovernmental
    entities. Rules and interpretive releases of the SEC under
    authority of federal securities laws are also sources of
    authoritative GAAP for SEC registrants. The Codification will
    supersede all then-existing non-SEC accounting and reporting
    standards. All other nongrandfathered non-SEC accounting
    literature not included in the Codification will become
    nonauthoritative. This accounting standard is effective for
    financial statements issued for interim and annual periods
    ending after September&#160;15, 2009. Following the issuance of
    this accounting standard, the FASB will not issue new standards
    in the form of Statements, FASB Staff Positions, or Emerging
    Issues Task Force Abstracts. Instead, it will issue Accounting
    Standards Updates. The Board will not consider Accounting
    Standards Updates as authoritative in their own right.
    Accounting Standards Updates will serve only to update the
    Codification, provide background information about the guidance,
    and provide the bases for conclusions on the change(s) in the
    Codification. The adoption of this accounting standard did not
    have a significant impact on the Company&#146;s financial
    statements.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 2%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><I><FONT style="font-family: 'Times New Roman', Times">Non-controlling
    Interests</FONT></I></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company will form an operating partnership subsidiary (the
    OP) through which we will conduct substantially all of our
    operations and make substantially all of our investments. The
    Company will be the sole general partner in the OP. When
    acquiring hotel properties, the OP may issue limited partnership
    interests as full or partial consideration to hotel sellers.
    These limited partners will have redemption rights which will
    permit them to redeem their interests in exchange for cash or
    common shares at the option of the Company on a
    <FONT style="white-space: nowrap">one-for-one</FONT>
    basis.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    These limited partner interests in our OP will be considered
    non-controlling interests. Non-controlling interests are
    presented on the balance sheet as either shareholders equity or
    outside of shareholders equity depending upon specific
    provisions of the governing documents related to such an
    interest. Because our OP
</DIV>
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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-6
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PEBBLEBROOK
    HOTEL TRUST<BR>
    </FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">NOTES&#160;TO
    BALANCE SHEET&#160;&#151;&#160;(Continued)</FONT></B>
</DIV>

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    agreement will permit the settlement of the redemption feature
    for unregistered common shares and because we will control the
    actions and events necessary to issue the maximum number of
    shares that are required to be delivered at the redemption date,
    the non-controlling limited partner interests in our OP will be
    presented as a separate component of shareholder&#146;s equity
    on our balance sheet. The
    <FONT style="white-space: nowrap">per-unit</FONT>
    redemption value of these non-controlling interests will equal
    the closing share price on the last day of the reporting period.
    Our revenues, expenses and net income or loss will include
    amounts attributable to both the controlling and non-controlling
    interests. Amounts attributable to non-controlling interests
    will be deducted from net income or loss to arrive at net income
    or loss attributable to common shareholders on our statement of
    operations.
</DIV>


<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">3.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Shareholders&#146;
    Equity</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Under the Declaration of Trust of the Company, the total number
    of shares authorized for issuance is 1,000 common shares.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    At formation, the Company issued the sole shareholder of the
    Company 1,000 common shares at $1&#160;per share.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">4.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Initial
    Public Offering and Concurrent Private Placement</FONT></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company intends to offer for sale common shares through the
    filing of a registration statement on
    <FONT style="white-space: nowrap">Form&#160;S-11</FONT>
    and also expects to issue common shares in a concurrent private
    placement at the public offering price per share to its
    Chairman, President and Chief Executive Officer, Jon&#160;E.
    Bortz, and its Executive Vice President and Chief Financial
    Officer, Raymond D. Martz.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company will reimburse its sole shareholder for any
    <FONT style="white-space: nowrap">out-of-pocket</FONT>
    expenses to be incurred in connection with the organization of
    the Company and the proposed offering of common shares to the
    public. As of October&#160;7, 2009, organizational costs
    incurred by the shareholder were inconsequential. If the
    proposed offering is terminated, the Company will have no
    obligation to reimburse the shareholder for any organizational
    or offering costs.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="97%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">5.&#160;&#160;</FONT></B>
</TD>
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Subsequent
    Events</FONT></B>
</TD>
</TR>

</TABLE>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Company has evaluated the need for disclosures
    <FONT style="white-space: nowrap">and/or</FONT>
    adjustments resulting from subsequent events through
    November&#160;9, 2009, the date the financial statements were
    available to be issued. This evaluation did not result in any
    subsequent events that necessitated disclosures
    <FONT style="white-space: nowrap">and/or</FONT>
    adjustments.
</DIV>

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<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    F-7
</DIV><!-- END PAGE WIDTH -->
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<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 85%; margin-left: 7%"><!-- BEGIN PAGE WIDTH -->

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER><!-- callerid=999 iwidth=432 length=0 -->

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=432 length=0 -->

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    &#160;&#160;&#160;&#160;&#160;Until&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;,
    20&#160;&#160; (25&#160;days after the date of this prospectus),
    all dealers that effect transactions in our common shares,
    whether or not participating in this offering, may be required
    to deliver a prospectus. This is in addition to the
    dealers&#146; obligation to deliver a prospectus when acting as
    underwriters and with respect to their unsold allotments or
    subscriptions.
</DIV>


<DIV style="margin-top: 36pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 18pt">17,500,000 Shares</FONT></B>
</DIV>



<DIV style="margin-top: 36pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <IMG src="w75877a3w7587711.gif" alt="(PEBBLE BROOK HOTEL TRUST LOGO)"><B><FONT style="font-size: 18pt">
    </FONT></B>
</DIV>


<DIV style="margin-top: 36pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B><FONT style="font-size: 18pt">Common Shares</FONT></B>
</DIV>

<DIV style="margin-top: 135pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 20%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=432 length=90 -->

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>PROSPECTUS</B>
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 20%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=432 length=90 -->

<DIV style="margin-top: 135pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV><B><FONT style="font-size: 18pt">BofA
    Merrill Lynch</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV><B><FONT style="font-size: 18pt">Raymond
    James</FONT></B>
</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV><B><FONT style="font-size: 18pt">Wells
    Fargo Securities</FONT></B>
</DIV>


<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV><B><FONT style="font-size: 18pt">Calyon
    Securities (USA) Inc.</FONT></B>
</DIV>



<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV><B><FONT style="font-size: 18pt">RBC
    Capital Markets</FONT></B>
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">
&nbsp;
</DIV>
<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <B>December&#160;&#160;&#160;, 2009</B>
</DIV>


<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 1pt solid #000000"></CENTER><!-- callerid=999 iwidth=432 length=0 -->

<CENTER style="font-size: 1pt; width: 100%; border-bottom: 2pt solid #000000"></CENTER><!-- callerid=999 iwidth=432 length=0 -->
<!-- XBRL Pagebreak Begin -->

<P align="left" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 85%; margin-left: 7%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->
</DIV><!-- END PAGE WIDTH -->
<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">PART&#160;II.
    INFORMATION NOT REQUIRED IN PROSPECTUS</FONT></B>
</DIV>

<DIV style="margin-top: 8pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;31.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Other
    Expenses of Issuance and Distribution.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The following table sets forth the costs and expenses of the
    sale and distribution of the securities being registered, all of
    which are being borne by the Registrant.
</DIV>

<DIV style="margin-top: 4pt; font-size: 1pt">&nbsp;</DIV>


<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="87%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=02 type=lead -->
    <TD width="9%" align="right">&nbsp;</TD>	<!-- colindex=02 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=02 type=hang1 -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<!-- TableOutputBody -->
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    SEC registration fee
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    22,459
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    FINRA filing fee
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    40,750
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    NYSE fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    115,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Printing and engraving fees
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    150,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Legal fees and expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    950,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Accounting fees and expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    20,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Blue Sky fees and expenses (including legal fees)
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    10,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Miscellaneous expenses
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
<TD nowrap align="right" valign="bottom">
    91,791
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD style="border-top: 1px solid #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="background: #CCEEFF">
<TD nowrap align="left" valign="bottom">
<DIV style="text-indent: -10pt; margin-left: 10pt">
    Total
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="left" valign="bottom">
    $
</TD>
<TD nowrap align="right" valign="bottom">
    1,400,000
</TD>
<TD nowrap align="left" valign="bottom">
&nbsp;
</TD>
</TR>
<TR valign="bottom" style="font-size: 1pt">
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD style="border-top: 3px double #000000">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 12pt; margin-left: 0%; width: 10%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=48 -->

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="1%"></TD>
    <TD width="1%"></TD>
    <TD width="98%"></TD>
</TR>

<TR>
    <TD valign="top">
    * </TD>
    <TD></TD>
    <TD valign="bottom">
    To be filed by amendment.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    All expenses, except the Securities and Exchange Commission
    registration fee and FINRA filing fee, are estimated.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;32.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Sales
    to Special Parties.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On October&#160;6, 2009, we issued 1,000 common shares to
    Mr.&#160;Bortz in connection with the formation and initial
    capitalization of our company for an aggregate purchase price of
    $1,000. We will redeem the shares from Mr.&#160;Bortz for $1,000
    upon completion of this offering.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;33.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Recent
    Sales of Unregistered Securities.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have issued or agreed to issue the following securities that
    were not registered under the Securities Act of 1933, as amended
    (the &#147;Securities Act&#148;):
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    On October&#160;6, 2009, we issued 1,000 common shares to
    Mr.&#160;Bortz in connection with the formation and initial
    capitalization of our company for an aggregate purchase price of
    $1,000. We will redeem the shares from Mr.&#160;Bortz for $1,000
    upon completion of this offering.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The shares were issued in reliance on the exemption set forth in
    Section&#160;4(2) of the Securities Act and Rule&#160;506
    thereunder. Mr.&#160;Bortz is our Chairman, President and Chief
    Executive Officer and has represented to us that he is an
    &#147;accredited investor&#148; as defined in Rule&#160;501
    under the Securities Act.
</DIV>


<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We will sell 125,000 common shares to Mr.&#160;Bortz and 10,000
    common shares to Mr.&#160;Martz, our Executive Vice President
    and Chief Financial Officer, in a private placement concurrently
    with the closing of the offering at a price per share equal to
    the public offering price in the offering. The shares will be
    sold to Messrs. Bortz and Martz in reliance on the exemption set
    forth in Section&#160;4(2) of the Securities Act and Rule 506 of
    Regulation&#160;D thereunder. Each of Mr.&#160;Bortz and
    Mr.&#160;Martz has represented to us that he is an
    &#147;accredited investor&#148; as defined in Rule 501 under the
    Securities Act.
</DIV>


<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;34.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Indemnification
    of Trustees and Officers.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Maryland law permits a Maryland real estate investment trust to
    include in its declaration of trust a provision limiting the
    liability of its trustees and officers to the real estate
    investment trust and its shareholders for money damages except
    for liability resulting from (a)&#160;actual receipt of an
    improper benefit or profit in money, property or services or
    (b)&#160;active or deliberate dishonesty established by a final
    judgment as being material to the cause of action. Our
    declaration of trust contains a provision which limits the
    liability of our trustees and officers to the maximum extent
    permitted by Maryland law.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    II-1
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Our declaration of trust permits us and our bylaws obligate us,
    to the maximum extent permitted by Maryland law, to indemnify
    and to pay or reimburse reasonable expenses in advance of final
    disposition of a proceeding to (a)&#160;any present or former
    trustee or officer or (b)&#160;any individual who, while a
    trustee or officer and at our request, serves or has served
    another real estate investment trust, corporation, partnership,
    limited liability company, joint venture, trust, employee
    benefit plan or any other enterprise as a director, trustee,
    officer, member, manager or partner and who is made or is
    threatened to be made a party to the proceeding by reason of his
    or her service in any such capacity, from and against any claim
    or liability to which that individual may become subject or
    which that individual may incur by reason of his or her service
    in any such capacity and to pay or reimburse his or her
    reasonable expenses in advance of final disposition of a
    proceeding. Our declaration of trust and bylaws also permit us
    to indemnify and advance expenses to any person who served a
    predecessor of our company in any of the capacities described
    above and to any employee or agent of our company or a
    predecessor of our company. Maryland law requires us to
    indemnify a trustee or officer who has been successful, on the
    merits or otherwise, in the defense of any proceeding to which
    he is made a party by reason of his service in that capacity.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    The Maryland General Corporation Law permits a Maryland real
    estate investment trust to indemnify and advance expenses to its
    trustees, officers, employees and agents to the same extent as
    permitted for directors and officers of Maryland corporations.
    The MGCL permits a corporation to indemnify its present and
    former directors and officers, among others, against judgments,
    penalties, fines, settlements and reasonable expenses actually
    incurred by them in connection with any proceeding to which they
    may be a party by reason of their service in those or other
    capacities unless it is established that (a)&#160;the act or
    omission of the director or officer was material to the matter
    giving rise to the proceeding and (i)&#160;was committed in bad
    faith or (ii)&#160;was a result of active and deliberate
    dishonesty, (b)&#160;the director or officer actually received
    an improper personal benefit in money, property or services or
    (c)&#160;in the case of any criminal proceeding, the director or
    officer has reasonable cause to believe that the act or omission
    was unlawful. However, a Maryland corporation may not indemnify
    for an adverse judgment in a suit by or in the right if the
    corporation or if the director or officer was adjudged to be
    liable for an improper personal benefit, unless in either case a
    court orders indemnification and then only for expenses. In
    accordance with the Maryland General Corporation Law and our
    bylaws, our bylaws require us, as a condition to advancing
    expenses, to obtain (a)&#160;a written affirmation by the
    trustee or officer of his or her good faith belief that he or
    she has met the standard of conduct necessary for
    indemnification and (b)&#160;a written statement by or on his or
    her behalf to repay the amount paid or reimbursed by us if it
    shall ultimately be determined that the standard of conduct was
    not met.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We also expect to enter into indemnification agreements with our
    trustees and our executive officers providing for procedures for
    indemnification by us to the fullest extent permitted by law and
    advancements by us of certain expenses and costs relating to
    claims, suits or proceedings arising from their service to us.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We expect to obtain an insurance policy under which our trustees
    and executive officers will be insured, subject to the limits of
    the policy, against certain losses arising from claims made
    against such trustees and officers by reason of any acts or
    omissions covered under such policy in their respective
    capacities as trustees or officers, including certain
    liabilities under the Securities Act of 1933.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    We have been advised that the SEC has expressed the opinion that
    indemnification of trustees, officers or persons otherwise
    controlling a company for liabilities arising under the
    Securities Act of 1933 is against public policy and is therefore
    unenforceable.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;35.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Treatment
    of Proceeds from Shares&#160;Being Registered.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    None of the net proceeds will be credited to an account other
    than the appropriate capital share account.
</DIV>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;36.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Financial
    Statements and Exhibits.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;<I>Financial Statements.</I>&#160;&#160;See
    <FONT style="white-space: nowrap">page&#160;F-1</FONT>
    for an index of the financial statements included in the
    Registration Statement.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    II-2
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;<I>Exhibits.</I>&#160;&#160;The following exhibits are
    filed as part of, or incorporated by reference into, this
    registration statement on
    <FONT style="white-space: nowrap">Form&#160;S-11:</FONT>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=01 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=01 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=01 type=align1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="90%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Exhibit<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Number</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Exhibit Description</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    1
</TD>
<TD nowrap align="left" valign="top">
    .1**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Underwriting Agreement by and among Pebblebrook Hotel
    Trust, Pebblebrook Hotel, L.P. and the Underwriters named herein
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .1***
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Amended and Restated Declaration of Trust of Pebblebrook
    Hotel Trust
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .2***
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Bylaws of Pebblebrook Hotel Trust
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .3***
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Agreement of Limited Partnership of Pebblebrook Hotel,
    L.P.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    5
</TD>
<TD nowrap align="left" valign="top">
    .1**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Opinion of Venable LLP
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    8
</TD>
<TD nowrap align="left" valign="top">
    .1**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Tax opinion of Hunton&#160;&#038; Williams LLP
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .1***
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Pebblebrook Hotel Trust&#160;2009 Equity Incentive Plan
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .2***
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Change in Control Severance Agreement between
    Pebblebrook Hotel Trust and Jon&#160;E.&#160;Bortz
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .3***
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Change in Control Severance Agreement between
    Pebblebrook Hotel Trust and Raymond D. Martz
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .4***
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Indemnification Agreement between Pebblebrook Hotel
    Trust and its officers and trustees
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .5***
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Share Award Agreement for officers
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .6***
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Share Award Agreement for trustees
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .7**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of LTIP Unit Vesting Agreement
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .8**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Subscription Agreement
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    21
</TD>
<TD nowrap align="left" valign="top">
    .1**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    List of Subsidiaries of Pebblebrook Hotel Trust
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .1**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    KPMG LLP Consent
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .2**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Venable LLP Consent (included in Exhibit&#160;5.1)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .3**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Hunton&#160;&#038; Williams LLP Consent (included in
    Exhibit&#160;8.1)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    99
</TD>
<TD nowrap align="left" valign="top">
    .1**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Cydney C. Donnell to being named as a trustee
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    99
</TD>
<TD nowrap align="left" valign="top">
    .2**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Ron E. Jackson to being named as a trustee
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    99
</TD>
<TD nowrap align="left" valign="top">
    .3**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Martin H. Nesbitt to being named as a trustee
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    99
</TD>
<TD nowrap align="left" valign="top">
    .4**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Michael J. Schall to being named as a trustee
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    99
</TD>
<TD nowrap align="left" valign="top">
    .5**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Earl E. Webb to being named as a trustee
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    99
</TD>
<TD nowrap align="left" valign="top">
    .6**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Laura H. Wright to being named as a trustee
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV style="font-size: 12pt; margin-left: 0%; width: 10%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=48 -->

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="2%"></TD>
    <TD width="1%"></TD>
    <TD width="97%"></TD>
</TR>

<TR>
    <TD valign="top">
    ** </TD>
    <TD></TD>
    <TD valign="bottom">
    Filed herewith.</TD>
</TR>

</TABLE>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96%"></TD>
</TR>

<TR>
    <TD valign="top">
    *** </TD>
    <TD></TD>
    <TD valign="bottom">
    Previously filed.</TD>
</TR>

</TABLE>

<DIV style="margin-top: 12pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

<TR>
    <TD width="9%"></TD>
    <TD width="91%"></TD>
</TR>

<TR valign="top">
    <TD>
    <B><FONT style="font-family: 'Times New Roman', Times">Item&#160;37.<I>&#160;&#160;</I></FONT></B>
</TD>
    <TD>
    <B><I><FONT style="font-family: 'Times New Roman', Times">Undertakings.</FONT></I></B>
</TD>
</TR>

</TABLE>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (a)&#160;The undersigned registrant hereby undertakes to provide
    to the underwriters at the closing specified in the underwriting
    agreement certificates in such denominations and registered in
    such names as required by the underwriters to permit prompt
    delivery to each purchaser.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (b)&#160;Insofar as indemnification for liabilities arising
    under the Securities Act of 1933&#160;may be permitted to
    trustees, officers or controlling persons of the registrant
    pursuant to the foregoing provisions, or otherwise, the
    registrant has been advised that in the opinion of the
    Securities and Exchange Commission such indemnification is
    against public policy as expressed in the Act and is, therefore,
    unenforceable. In the event that a claim for indemnification
    against such liabilities (other than the payment by the
    registrant of expenses incurred or paid by a trustee, officer or
    controlling person of the registrant in the successful defense
    of any action, suit or proceeding) is asserted by such trustee,
    officer or controlling person in connection with the securities
    being registered, the registrant will, unless in the opinion of
    its counsel the matter has been settled by controlling
    precedent, submit to a court of appropriate jurisdiction the
    question whether such
</DIV>
<!-- XBRL Paragraph Pagebreak -->
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    II-3
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    indemnification by it is against public policy as expressed in
    the Act, and will be governed by the final adjudication of such
    issue.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (c)&#160;The undersigned Registrant hereby further undertakes
    that:
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (1)&#160;For purposes of determining any liability under the
    Securities Act of 1933, the information omitted from the form of
    prospectus filed as part of this registration statement in
    reliance under Rule&#160;430A and contained in a form of
    prospectus filed by the Registrant pursuant to
    Rule&#160;424(b)(1) or (4), or 497(h) under the Securities Act
    shall be deemed to be part of this registration statement as of
    the time it was declared effective.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 7%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    (2)&#160;For the purpose of determining any liability under the
    Securities Act of 1933, each post-effective amendment that
    contains a form of prospectus shall be deemed to be a new
    registration statement relating to the securities offered
    herein, and the offering of such securities at that time shall
    be deemed to be the initial bona fide offering thereof.
</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    II-4
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV style="margin-top: 18pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">SIGNATURES</FONT></B>
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the requirements of the Securities Act of 1933, the
    registrant certifies that it has reasonable grounds to believe
    that it meets all of the requirements for filing on
    <FONT style="white-space: nowrap">Form&#160;S-11</FONT>
    and has duly caused this Amendment No.&#160;3 to be signed on
    its behalf by the undersigned, thereunto duly authorized, in the
    City of Bethesda, State of Maryland on the 3rd day of December,
    2009.
</DIV>

<DIV style="margin-top: 24pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 49%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    PEBBLEBROOK HOTEL TRUST
</DIV>

<DIV style="margin-top: 48pt; font-size: 1pt">&nbsp;</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0">

<TR>
    <TD width="49%"></TD>
    <TD width="4%"></TD>
    <TD width="47%"></TD>
</TR>

<TR valign="top" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <TD>&nbsp;</TD>
    <TD>    By:&#160;
</TD>
    <TD align="left">
    <DIV style="display:inline; text-align:left;">/s/&#160;&#160;Jon
    E. Bortz</DIV>
</TD>
</TR>

</TABLE>

<DIV style="font-size: 2pt; margin-left: 53%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=999 iwidth=456 length=0 -->

<DIV align="left" style="margin-left: 53%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Jon E. Bortz
</DIV>

<DIV align="left" style="margin-left: 53%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Chairman of the Board, President and Chief<BR>
    Executive Officer
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 7%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    Pursuant to the requirements of the Securities Act of 1933, this
    Amendment No.&#160;3 has been signed below by the following
    person in the capacities and on the dates indicated.
</DIV>

<DIV style="margin-top: 6pt; font-size: 1pt">&nbsp;</DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="3%">&nbsp;</TD>	<!-- colindex=01 type=maindata -->
    <TD width="1%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="37%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=03 type=gutter -->
    <TD width="37%">&nbsp;</TD>	<!-- colindex=03 type=maindata -->
    <TD width="3%">&nbsp;</TD>	<!-- colindex=04 type=gutter -->
    <TD width="16%">&nbsp;</TD>	<!-- colindex=04 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Signature</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Title</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Date</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 12pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom" style="line-height: 12pt">
<TD colspan="3">
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
<TD>
&nbsp;
</TD>
</TR>
<TR valign="bottom">
<TD colspan="3" align="center" valign="top">
    <DIV style="display:inline; text-align:center; width:90%">/s/&#160;&#160;Jon
    E. Bortz</DIV><BR>
    <DIV style="font-size: 2pt; margin-left: 0%; width: 100%;  align: left; border-bottom: 1pt solid #000000"></DIV><!-- callerid=201 iwidth=183 length=0 -->Jon
    E. Bortz
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    Chairman of the Board, President, Chief Executive Officer and
    Trustee (Principal Executive Officer, Principal Financial
    Officer and Principal Accounting Officer)
</TD>
<TD>
&nbsp;
</TD>
<TD align="center" valign="top">
    December&#160;3, 2009
</TD>
</TR>
</TABLE>

<DIV align="left" style="margin-left: 0%; margin-right: 0%; text-indent: 0%; font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">

</DIV>
<!-- XBRL Pagebreak Begin -->

<P align="center" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
    <BR>
    II-5
</DIV><!-- END PAGE WIDTH -->
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="width: 87%; margin-left: 6%"><!-- BEGIN PAGE WIDTH -->
<!-- XBRL Pagebreak End -->

<DIV align="center" style="margin-left: 0%; margin-right: 0%; font-size: 10pt; font-family: Arial, Helvetica; color: #000000; background: #FFFFFF">

    <B><FONT style="font-family: 'Times New Roman', Times">EXHIBIT
    INDEX</FONT></B>
</DIV>

<DIV align="left"><FONT size="1">

</FONT></DIV>

<TABLE border="0" width="100%" align="center" cellpadding="0" cellspacing="0" style="font-size: 10pt; font-family: 'Times New Roman', Times; color: #000000; background: #FFFFFF">
<!-- Table Width Row BEGIN -->
<TR style="font-size: 1pt" valign="bottom">
    <TD width="1%" align="right">&nbsp;</TD>	<!-- colindex=01 type=lead -->
    <TD width="6%" align="right">&nbsp;</TD>	<!-- colindex=01 type=body -->
    <TD width="1%" align="left">&nbsp;</TD>	<!-- colindex=01 type=align1 -->
    <TD width="2%">&nbsp;</TD>	<!-- colindex=02 type=gutter -->
    <TD width="90%">&nbsp;</TD>	<!-- colindex=02 type=maindata -->
</TR>
<!-- Table Width Row END -->
<!-- TableOutputHead -->
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
    <B>Exhibit<BR>
    </B>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
&nbsp;
</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom" align="center">
<TD colspan="3" nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Number</B>
</DIV>
</TD>
<TD>
&nbsp;
</TD>
<TD nowrap align="center" valign="bottom">
<DIV style="border-bottom: 1px solid #000000; width: 1%; padding-bottom: 1px">
    <B>Exhibit Description</B>
</DIV>
</TD>
</TR>
<TR style="line-height: 3pt; font-size: 1pt">
<TD>&nbsp;
</TD>
</TR>
<!-- TableOutputBody -->
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    1
</TD>
<TD nowrap align="left" valign="top">
    .1**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Underwriting Agreement by and among Pebblebrook Hotel
    Trust, Pebblebrook Hotel, L.P. and the Underwriters named herein
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .1***
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Amended and Restated Declaration of Trust of Pebblebrook
    Hotel Trust
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .2***
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Bylaws of Pebblebrook Hotel Trust
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    3
</TD>
<TD nowrap align="left" valign="top">
    .3***
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Agreement of Limited Partnership of Pebblebrook Hotel,
    L.P.
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    5
</TD>
<TD nowrap align="left" valign="top">
    .1**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Opinion of Venable LLP
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    8
</TD>
<TD nowrap align="left" valign="top">
    .1**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Tax opinion of Hunton&#160;&#038; Williams LLP
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .1***
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Pebblebrook Hotel Trust&#160;2009 Equity Incentive Plan
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .2***
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Change in Control Severance Agreement between
    Pebblebrook Hotel Trust and Jon&#160;E.&#160;Bortz
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .3***
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Change in Control Severance Agreement between
    Pebblebrook Hotel Trust and Raymond D. Martz
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .4***
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Indemnification Agreement between Pebblebrook Hotel
    Trust and its officers and trustees
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .5***
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Share Award Agreement for officers
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .6***
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Share Award Agreement for trustees
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .7**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of LTIP Unit Vesting Agreement
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    10
</TD>
<TD nowrap align="left" valign="top">
    .8**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Form of Subscription Agreement
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    21
</TD>
<TD nowrap align="left" valign="top">
    .1**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    List of Subsidiaries of Pebblebrook Hotel Trust
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .1**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    KPMG LLP Consent
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .2**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Venable LLP Consent (included in Exhibit&#160;5.1)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    23
</TD>
<TD nowrap align="left" valign="top">
    .3**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Hunton&#160;&#038; Williams LLP Consent (included in
    Exhibit&#160;8.1)
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    99
</TD>
<TD nowrap align="left" valign="top">
    .1**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Cydney C. Donnell to being named as a trustee
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    99
</TD>
<TD nowrap align="left" valign="top">
    .2**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Ron E. Jackson to being named as a trustee
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    99
</TD>
<TD nowrap align="left" valign="top">
    .3**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Martin H. Nesbitt to being named as a trustee
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    99
</TD>
<TD nowrap align="left" valign="top">
    .4**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Michael J. Schall to being named as a trustee
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    99
</TD>
<TD nowrap align="left" valign="top">
    .5**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Earl E. Webb to being named as a trustee
</TD>
</TR>
<TR valign="bottom">
<TD nowrap align="left" valign="top">
&nbsp;
</TD>
<TD nowrap align="right" valign="top">
    99
</TD>
<TD nowrap align="left" valign="top">
    .6**
</TD>
<TD>
&nbsp;
</TD>
<TD align="left" valign="top">
    Consent of Laura H. Wright to being named as a trustee
</TD>
</TR>
</TABLE>

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    <TD width="97%"></TD>
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<TR>
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    ** </TD>
    <TD></TD>
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    Filed herewith.</TD>
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<DIV style="margin-top: 3pt; font-size: 1pt">&nbsp;</DIV>

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    *** </TD>
    <TD></TD>
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    Previously filed. </TD>
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<TYPE>EX-1.1
<SEQUENCE>2
<FILENAME>w75877a3exv1w1.htm
<DESCRIPTION>EX-1.1
<TEXT>
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;1.1</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<DIV style="width: 100%; border-bottom: 3px double #000000; font-size: 1px">&nbsp;</DIV>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">PEBBLEBROOK HOTEL TRUST
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">(a Maryland Real Estate Investment Trust)

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>&#091;</B><B>&#149;</B><B>&#093; </B>Common Shares of Beneficial Interest

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><U>PURCHASE AGREEMENT</U>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dated: <B>&#091;</B><B>&#149;</B><B>&#093;</B>, 2009
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<DIV style="width: 100%; border-bottom: 3px double #000000; font-size: 1px">&nbsp;</DIV>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">PEBBLEBROOK HOTEL TRUST

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">(a Maryland Real Estate Investment Trust)

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>&#091;</B><B>&#149;</B><B>&#093; </B>Common Shares of Beneficial Interest

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt">(Par Value $0.01 Per Share)

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>PURCHASE AGREEMENT</B>

</DIV>

<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>&#091;</B><B>&#149;</B><B>&#093;</B>, 2009
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Merrill Lynch, Pierce, Fenner &#038; Smith Incorporated<BR>
4 World Financial Center<BR>
New York, New York 10080

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Raymond James &#038; Associates, Inc.<BR>
880 Carillon Parkway<BR>
St. Petersburg, Florida 33716

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Wells Fargo Securities, LLC<BR>
375 Park Avenue<BR>
New York, New York 10152

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ladies and Gentlemen:

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pebblebrook Hotel Trust, a Maryland real estate investment trust (the &#147;Company&#148;) and
Pebblebrook Hotel, L.P., a Delaware limited partnership and the operating partnership of the
Company (in such capacity, the &#147;Operating Partnership&#148;), each confirms its agreement with Merrill
Lynch, Pierce, Fenner &#038; Smith Incorporated (&#147;Merrill Lynch&#148;), Raymond James &#038; Associates, Inc.
(&#147;Raymond James&#148;), Wells Fargo Securities, LLC (&#147;Wells Fargo&#148;) and each of the other Underwriters
named in Schedule&nbsp;A hereto (collectively, the &#147;Underwriters,&#148; which term shall also include any
underwriter substituted as hereinafter provided in Section&nbsp;10 hereof), for whom Merrill Lynch,
Raymond James and Wells Fargo are acting as representatives (in such capacity, the
&#147;Representatives&#148;), with respect to (i)&nbsp;the sale by the Company and the purchase by the
Underwriters, acting severally and not jointly, of the respective numbers of common shares of
beneficial interest, par value $0.01 per share, in the Company (the &#147;Common Shares&#148;) set forth in
Schedule&nbsp;A hereto and (ii)&nbsp;the grant by the Company to the Underwriters, acting severally and not
jointly, of the option described in Section 2(b) hereof to purchase all or any part of <B>&#091;</B><B>&#149;</B><B>&#093;</B>
additional Common Shares to cover overallotments, if any. The aforesaid <B>&#091;</B><B>&#149;</B><B>&#093; </B>Common Shares
(the &#147;Initial Securities&#148;) to be purchased by the Underwriters and all or any part of the <B>&#091;</B><B>&#149;</B><B>&#093;</B>
Common Shares subject to the option described in Section 2(b) hereof (the &#147;Option Securities&#148;) are
hereinafter called, collectively, the &#147;Securities.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company understands that the Underwriters propose to make a public offering of the
Securities as soon as the Representatives deem advisable after this Agreement has been executed and
delivered.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company and the Underwriters agree that up to <B>&#091;</B><B>&#149;</B><B>&#093; </B>of the Initial Securities to be
purchased by the Underwriters (the &#147;Reserved Securities&#148;) shall be reserved for sale by the
Underwriters to certain eligible employees and persons having business relationships with the
Company (the &#147;Invitees&#148;), as part
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">of the distribution of the Securities by the Underwriters, subject to the terms of this
Agreement, the applicable rules, regulations and interpretations of the Financial Industry
Regulatory Authority (&#147;FINRA&#148;) and all other applicable laws, rules and regulations. To the extent
that such Reserved Securities are not orally confirmed for purchase by Invitees by 9:00 a.m.
Eastern Time on the first business day after the date of this Agreement, such Reserved Securities
may be offered to the public as part of the public offering contemplated hereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has filed with the Securities and Exchange Commission (the &#147;Commission&#148;) a
registration statement on Form&nbsp;S-11 (No.&nbsp;333-162412), including the related preliminary prospectus
or prospectuses, covering the registration of the Securities under the Securities Act of 1933, as
amended (the &#147;1933 Act&#148;). Promptly after execution and delivery of this Agreement, the Company
will prepare and file a prospectus in accordance with the provisions of Rule&nbsp;430A (&#147;Rule&nbsp;430A&#148;) of
the rules and regulations of the Commission under the 1933 Act (the &#147;1933 Act Regulations&#148;) and
paragraph (b)&nbsp;of Rule&nbsp;424 (&#147;Rule&nbsp;424(b)&#148;) of the 1933 Act Regulations. The information included in
such prospectus that was omitted from such registration statement at the time it became effective
but that is deemed to be part of such registration statement at the time it became effective
pursuant to paragraph (b)&nbsp;of Rule&nbsp;430A is referred to as &#147;Rule&nbsp;430A Information.&#148; Each prospectus
used before such registration statement became effective, and any prospectus that omitted the Rule
430A Information, that was used after such effectiveness and prior to the execution and delivery of
this Agreement, is herein called a &#147;preliminary prospectus.&#148; Such registration statement,
including the amendments thereto, the exhibits and any schedules thereto, at the time it became
effective, and including the Rule&nbsp;430A Information, is herein called the &#147;Registration Statement.&#148;
Any registration statement filed pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the &#147;Rule&nbsp;462(b) Registration Statement,&#148; and after such filing the term
&#147;Registration Statement&#148; shall include the Rule 462(b) Registration Statement. The final
prospectus in the form first furnished to the Underwriters for use in connection with the offering
of the Securities is herein called the &#147;Prospectus.&#148; For purposes of this Agreement, all
references to the Registration Statement, any preliminary prospectus, the Prospectus or any
amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the
Commission pursuant to its Electronic Data Gathering, Analysis and Retrieval system, or any
successor system (&#147;EDGAR&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 1. <U>Representations and Warranties</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;<I>Representations and Warranties by the Company and the Operating Partnership. </I>The Company
and the Operating Partnership, jointly and severally, represent and warrant to each Underwriter as
of the date hereof, as of the Applicable Time referred to in Section&nbsp;1(a)(i) hereof, as of the
Closing Time referred to in Section 2(c) hereof, and as of each Date of Delivery (if any) referred
to in Section 2(b) hereof, and agrees with each Underwriter, as follows:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <U>Compliance with Registration Requirements</U>. Each of the Registration
Statement, any Rule 462(b) Registration Statement and any post-effective amendment thereto
has become effective under the 1933 Act and no stop order suspending the effectiveness of
the Registration Statement, any Rule 462(b) Registration Statement or any post-effective
amendment thereto has been issued under the 1933 Act and no proceedings for that purpose
have been instituted or are pending or, to the knowledge of the Company, are contemplated by
the Commission, and any request on the part of the Commission for additional information has
been complied with.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the respective times the Registration Statement, any Rule 462(b) Registration
Statement and any post-effective amendments thereto became effective and at the Closing Time
(and, if any Option Securities are purchased, at the applicable Date of Delivery), the
Registration Statement, the Rule 462(b) Registration Statement and any amendments and
supplements thereto
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">complied and will comply in all material respects with the requirements of the 1933 Act
and the 1933 Act Regulations and did not and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or necessary to
make the statements therein not misleading. Neither the Prospectus nor any amendments or
supplements thereto, at the time the Prospectus or any such amendment or supplement was
issued and at the Closing Time (and, if any Option Securities are purchased, at the
applicable Date of Delivery), included or will include an untrue statement of a material
fact or omitted or will omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of the Applicable Time (as defined below), neither (x)&nbsp;the Issuer General Use Free
Writing Prospectus(es) (as defined below) issued at or prior to the Applicable Time and the
Statutory Prospectus (as defined below) as of the Applicable Time and the information
included on Schedule&nbsp;F hereto, all considered together (collectively, the &#147;General
Disclosure Package&#148;), nor (y)&nbsp;any individual Issuer Limited Use Free Writing Prospectus,
when considered together with the General Disclosure Package, included any untrue statement
of a material fact or omitted to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not
misleading.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As used in this subsection and elsewhere in this Agreement:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Applicable Time&#148; means <B>&#091;</B><B>&#149;</B><B>&#093;</B>:00 <B>&#091;</B>a/p<B>&#093;</B>m (Eastern time) on <B>&#091;</B><B>&#149;</B><B>&#093;</B>, 2009 or such
other time as agreed by the Company and the Representatives.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Statutory Prospectus&#148; as of any time means the prospectus relating to the Securities
that is included in the Registration Statement immediately prior to that time.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Issuer Free Writing Prospectus&#148; means any &#147;issuer free writing prospectus,&#148; as defined
in Rule&nbsp;433 of the 1933 Act Regulations (&#147;Rule&nbsp;433&#148;), relating to the Securities that (i)&nbsp;is
required to be filed with the Commission by the Company, (ii)&nbsp;is a &#147;road show that is a
written communication&#148; within the meaning of Rule&nbsp;433(d)(8)(i) whether or not required to be
filed with the Commission or (iii)&nbsp;is exempt from filing pursuant to Rule&nbsp;433(d)(5)(i)
because it contains a description of the Securities or of the offering that does not reflect
the final terms, in each case in the form filed or required to be filed with the Commission
or, if not required to be filed, in the form required to be retained in the Company&#146;s
records pursuant to Rule&nbsp;433(g).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Issuer General Use Free Writing Prospectus&#148; means any Issuer Free Writing Prospectus
that is intended for general distribution to prospective investors (other than a Bona Fide
Electronic Road Show (as defined below)), as evidenced by its being specified in Schedule&nbsp;E
hereto.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&#147;Issuer Limited Use Free Writing Prospectus&#148; means any Issuer Free Writing Prospectus
that is not an Issuer General Use Free Writing Prospectus.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company has made available a &#147;<I>bona fide </I>electronic road show,&#148; as defined in Rule
433, in compliance with Rule&nbsp;433(d)(8)(ii) (the &#147;Bona Fide Electronic Road Show&#148;) such that
no filing of any &#147;road show&#148; (as defined in Rule&nbsp;433(h)) is required in connection with the
offering of the Securities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Issuer Free Writing Prospectus, as of its issue date and at all subsequent times
through the completion of the public offer and sale of the Securities or until any earlier
date that
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">the issuer notified or notifies the Representatives as described in Section&nbsp;3(e), did
not, does not and will not include any information that conflicted, conflicts or will
conflict with the information contained in the Registration Statement or the Prospectus and
any preliminary or other prospectus deemed to be a part thereof that has not been superseded
or modified.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The representations and warranties in this subsection shall not apply to statements in
or omissions from the Registration Statement, the Prospectus or any Issuer Free Writing
Prospectus made in reliance upon and in conformity with written information furnished to the
Company by any Underwriter through the Representatives expressly for use therein.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each preliminary prospectus (including the prospectus filed as part of the Registration
Statement as originally filed or as part of any amendment thereto) complied when so filed in
all material respects with the 1933 Act Regulations and each such preliminary prospectus and
the Prospectus delivered to the Underwriters for use in connection with this offering was
identical to the electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation&nbsp;S-T.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the time of filing the Registration Statement, any 462(b) Registration Statement and
any post-effective amendments thereto, at the earliest time thereafter that the Company or
another offering participant made a <I>bona fide </I>offer (within the meaning of Rule&nbsp;164(h)(2) of
the 1933 Act Regulations) of the Securities and at the date hereof, the Company was not and
is not an &#147;ineligible issuer,&#148; as defined in Rule&nbsp;405 of the 1933 Act Regulations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <U>Independent Accountants</U>. KPMG LLP, who has audited the financial
statements included in the Registration Statement is an independent registered public
accounting firm as required by the 1933 Act and the 1933 Act Regulations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <U>Financial Statements</U>. The financial statements included in the
Registration Statement, the General Disclosure Package and the Prospectus, together with the
related notes, are accurate in all material respects and present fairly the financial
position of the Company, at the date indicated; said financial statements have been prepared
in conformity with U.S. generally accepted accounting principles (&#147;GAAP&#148;) applied on a
consistent basis throughout the periods involved. The supporting schedules, if any, present
fairly in accordance with GAAP the information required to be stated therein. No other
financial statements are required to be set forth in the Registration Statement, the General
Disclosure Package or the Prospectus under the 1933 Act and the 1933 Act Regulations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <U>No Material Adverse Change in Business</U>. Since the respective dates as of
which information is given in the Registration Statement, the General Disclosure Package or
the Prospectus, except as otherwise stated therein, (A)&nbsp;there has been no material adverse
change in the condition, financial or otherwise, or in the earnings, business affairs,
business prospects, management, assets or properties of the Company and the Operating
Partnership considered as one enterprise, whether or not arising in the ordinary course of
business (a &#147;Material Adverse Effect&#148;), (B)&nbsp;there have been no transactions entered into by
the Company or the Operating Partnership, other than those in the ordinary course of
business, which are material with respect to the Company and the Operating Partnership
considered as one enterprise, and (C)&nbsp;there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its shares of beneficial interest.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <U>Good Standing of the Company</U>. The Company has been duly organized and is
validly existing as a real estate investment trust in good standing with the State
Department of
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Assessments and Taxation of Maryland (the &#147;SDAT&#148;) and has the requisite power and
authority to own, lease and operate its properties and to conduct its business as described
in the Registration Statement, the General Disclosure Package and the Prospectus and to
enter into and perform its obligations under this Agreement; and the Company is duly
qualified as a foreign trust to transact business and is in good standing in each other
jurisdiction in which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so to qualify or to
be in good standing would not result in a Material Adverse Effect. Complete and correct
copies of the declaration of trust and of the bylaws of the Company and all amendments
thereto have been made available to the Representatives and no changes thereto will be made
subsequent to the date hereof and prior to the Closing Time or, if applicable, each Date of
Delivery.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) <U>Good Standing of Subsidiaries</U>. The only &#147;subsidiary&#148; (as such term is
defined in Rule&nbsp;1-02 of Regulation&nbsp;S-X) of the Company is the Operating Partnership. The
Operating Partnership has been duly organized and is validly existing as a limited
partnership in good standing under the laws of the state of Delaware, has partnership power
and authority to own, lease and operate its properties and to conduct its business as
described in the Registration Statement, the General Disclosure Package and the Prospectus
and is duly qualified as a foreign partnership to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a Material Adverse Effect; except as
otherwise disclosed in the Registration Statement, the General Disclosure Package and the
Prospectus, the issued and outstanding equity interests of the Operating Partnership have
been duly authorized and validly issued, are fully paid and non-assessable and are owned by
the Company free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; none of the outstanding equity interests of the Operating Partnership were
issued in violation of the preemptive or similar rights of any securityholder of the
Operating Partnership. Except for the equity interests of the Operating Partnership, the
Company does not own, directly or indirectly, any shares of stock or any other equity or
long term debt securities of any corporation or have any equity interest in any firm,
partnership, joint venture, association or other entity.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) <U>Capitalization</U>. The authorized, issued and outstanding shares of
beneficial interest in the Company is as set forth in the Registration Statement, the
General Disclosure Package and the Prospectus in the column entitled &#147;Actual&#148; under the
caption &#147;Capitalization&#148; (except for subsequent issuances, if any, pursuant to this
Agreement or pursuant to reservations, agreements or benefit plans referred to in the
Registration Statement, the General Disclosure Package and the Prospectus). The issued and
outstanding shares of beneficial interest in the Company have been duly authorized and
validly issued and are fully paid and non-assessable; none of the outstanding shares of
beneficial interest in the Company was issued in violation of the preemptive or other
similar rights of any securityholder of the Company.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) <U>Authorization of Agreement</U>. This Agreement has been duly authorized,
executed and delivered by each of the Company and the Operating Partnership.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) <U>Authorization and Description of Securities</U>. The Securities to be
purchased by the Underwriters from the Company have been duly authorized for issuance and
sale to the Underwriters pursuant to this Agreement and, when issued and delivered by the
Company pursuant to this Agreement against payment of the consideration set forth herein,
will be validly issued and fully paid and non-assessable free and clear of any pledge, lien,
encumbrance, security interest or other claim created by the Company, and will be registered
pursuant to Section&nbsp;12 of
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">the Securities Exchange Act of 1934, as amended (the &#147;1934 Act&#148;); the Common Shares
conform to all statements relating thereto contained in the Registration Statement, the
General Disclosure Package and the Prospectus and such description conforms to the rights
set forth in the instruments defining the same; the certificates for the Securities, if any,
are in due and proper form; no holder of the Securities will be subject to personal
liability by reason of being such a holder; and the issuance of the Securities is not
subject to any statutory or contractual preemptive rights, resale rights, rights of first
refusal or other similar rights of any securityholder of the Company.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) <U>Absence of Defaults and Conflicts</U>. Neither the Company nor the Operating
Partnership is in violation of its declaration of trust, partnership agreement or bylaws, as
the case may be, or in default in the performance or observance of any obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease or other agreement or instrument to which the
Company or the Operating Partnership is a party or by which it or any of them may be bound,
or to which any of the property or assets of the Company or the Operating Partnership is
subject (collectively, &#147;Agreements and Instruments&#148;) except for such defaults that would not
result in a Material Adverse Effect; and the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein and in the
Registration Statement, the General Disclosure Package and the Prospectus (including the
issuance and sale of the Securities and the use of the proceeds from the sale of the
Securities as described therein under the caption &#147;Use of Proceeds&#148;) and compliance by the
Company and the Operating Partnership with their respective obligations hereunder have been
duly authorized by all necessary action and do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined below) under, or result in the creation or imposition
of any lien, charge or encumbrance upon any property or assets of the Company or the
Operating Partnership pursuant to, the Agreements and Instruments (except for such
conflicts, breaches, defaults or Repayment Events or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action result in any violation
of the provisions of the declaration of trust, partnership agreement, or bylaws, as the
case may be, of the Company or the Operating Partnership or any applicable law, statute,
rule, regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the Company or the
Operating Partnership or any of their assets, properties or operations. As used herein, a
&#147;Repayment Event&#148; means any event or condition which gives the holder of any note, debenture
or other evidence of indebtedness (or any person acting on such holder&#146;s behalf) the right
to require the repurchase, redemption or repayment of all or a portion of such indebtedness
by the Company or the Operating Partnership.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) <U>Absence of Proceedings</U>. There is no action, suit, proceeding, inquiry or
investigation before or brought by any court or governmental agency or body, domestic or
foreign, now pending, or, to the knowledge of the Company or the Operating Partnership,
threatened, against or affecting the Company or the Operating Partnership, which is required
to be disclosed in the Registration Statement (other than as disclosed therein), or which
might result in a Material Adverse Effect, or which might materially and adversely affect
the properties or assets thereof or the consummation of the transactions contemplated in
this Agreement or the performance by the Company or the Operating Partnership of their
respective obligations hereunder; the aggregate of all pending legal or governmental
proceedings to which the Company or the Operating Partnership is a party or of which any of
their respective property or assets is the subject which are not described in the
Registration Statement, the General Disclosure Package and the Prospectus, including
ordinary routine litigation incidental to the business, could not result in a Material
Adverse Effect.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xii) <U>Accuracy of Descriptions</U>. The descriptions in the Registration
Statement, the General Disclosure Package and the Prospectus, if any, of affiliate
transactions, contracts required to be described therein and other legal documents are true
and correct in all material respects, and there are no affiliate transactions, contracts or
other documents of a character required to be described in the Registration Statement, the
General Disclosure Package and the Prospectus, if any, or to be filed as exhibits to the
Registration Statement which are not described or filed as required. All agreements between
the Company and any other party expressly referenced in the Registration Statement, the
General Disclosure Package and the Prospectus are, or will be at the Closing Time, legal,
valid and binding obligations of the Company, enforceable against the Company in accordance
with their respective terms, except to the extent that enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors&#146;
rights generally and by general equitable principles.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiii) <U>Possession of Intellectual Property</U>. Each of the Company the Operating
Partnership owns or possesses, or can acquire on reasonable terms, adequate patents, patent
rights, licenses, inventions, copyrights, know-how (including trade secrets and other
unpatented and/or unpatentable proprietary or confidential information, systems or
procedures), trademarks, service marks, trade names or other intellectual property
(collectively, &#147;Intellectual Property&#148;) necessary to conduct its business as described in
the Registration Statement, the General Disclosure Package and the Prospectus, and neither
the Company nor the Operating Partnership has received any notice or is otherwise aware of
any infringement of or conflict with asserted rights of others with respect to any
Intellectual Property or of any facts or circumstances which would render any Intellectual
Property invalid or inadequate to protect the interest of the Company or the Operating
Partnership therein, and which infringement or conflict (if the subject of any unfavorable
decision, ruling or finding) or invalidity or inadequacy, singly or in the aggregate, would
result in a Material Adverse Effect.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xiv) <U>Absence of Further Requirements</U>. No filing with, or authorization,
approval, consent, license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the performance by the Company
or the Operating Partnership of their respective obligations hereunder, in connection with
the offering, issuance or sale of the Securities hereunder or the consummation of the
transactions contemplated by this Agreement, except such as have been already obtained or as
may be required under the 1933 Act or the 1933 Act Regulations or state securities laws or
as may be required by FINRA.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xv) <U>Absence of Manipulation</U>. None of the Company, the Operating Partnership
or any affiliate of the Company or the Operating Partnership has taken, nor will the
Company, the Operating Partnership or any affiliate of the Company or the Operating
Partnership take, directly or indirectly, any action which is designed to or which has
constituted or which would be expected to cause or result in stabilization or manipulation
of the price of any security of the Company to facilitate the sale or resale of the
Securities.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvi) <U>Possession of Licenses and Permits</U>. Each of the Company and the
Operating Partnership possesses such permits, licenses, approvals, consents and other
authorizations issued by the appropriate federal, state, local or foreign regulatory
agencies or bodies necessary to conduct their business as described in the Registration
Statement, the General Disclosure Package and the Prospectus (collectively, &#147;Governmental
Licenses&#148;), except where the failure so to possess would not, singly or in the aggregate,
result in a Material Adverse Effect; each of the Company and the Operating Partnership is in
compliance with the terms and conditions of all such Governmental Licenses, except where the
failure so to comply would not, singly or in the aggregate, result in a Material Adverse
Effect; all of the Governmental Licenses are valid and in
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">full force and effect, except where the invalidity of such Governmental Licenses or the
failure of such Governmental Licenses to be in full force and effect would not, singly or in
the aggregate, result in a Material Adverse Effect; and neither the Company nor the
Operating Partnership has received any notice of proceedings relating to the revocation or
modification of any such Governmental Licenses which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a Material Adverse
Effect.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xvii) <U>Property</U>. Neither the Company nor the Operating Partnership owns any
real property.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xviii) <U>Investment Company Act</U>. The Company is not, and upon the issuance and
sale of the Securities as herein contemplated and the application of the net proceeds
therefrom as described in the Registration Statement, the General Disclosure Package and the
Prospectus will not be, an &#147;investment company&#148; as such term is defined in the Investment
Company Act of 1940, as amended (the &#147;1940 Act&#148;).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xix) <U>Environmental Laws</U>. Except as described in the Registration Statement,
the Disclosure Package and the Prospectus and except as would not, singly or in the
aggregate, result in a Material Adverse Effect, (A)&nbsp;neither the Company nor the Operating
Partnership is in violation of any federal, state, local or foreign statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the environment (including,
without limitation, ambient air, surface water, groundwater, land surface or subsurface
strata) or wildlife, including, without limitation, laws and regulations relating to the
release or threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products, asbestos-containing
materials or mold (collectively, &#147;Hazardous Materials&#148;) or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of Hazardous
Materials (collectively, &#147;Environmental Laws&#148;), (B)&nbsp;each of the Company and the Operating
Partnership has all permits, authorizations and approvals required under any applicable
Environmental Laws and is in compliance with their requirements, (C)&nbsp;there are no pending or
threatened administrative, regulatory or judicial actions, suits, demands, demand letters,
claims, liens, notices of noncompliance or violation, investigation or proceedings relating
to any Environmental Law against the Company or the Operating Partnership and (D)&nbsp;there are
no events or circumstances that would reasonably be expected to form the basis of an order
for clean-up or remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company or the Operating Partnership
relating to Hazardous Materials or any Environmental Laws.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xx) <U>Registration Rights</U>. There are no persons with registration rights or
other similar rights to have any securities registered pursuant to the Registration
Statement or otherwise registered by the Company under the 1933 Act .
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxi) <U>Accounting Controls and Disclosure Controls</U>. Each of the Company and the
Operating Partnership maintains a system of internal accounting controls sufficient to
provide reasonable assurances that (A)&nbsp;transactions are executed in accordance with
management&#146;s general or specific authorization; (B)&nbsp;transactions are recorded as necessary
to permit preparation of financial statements in conformity with GAAP and to maintain
accountability for assets; (C)&nbsp;access to assets is permitted only in accordance with
management&#146;s general or specific authorization; and (D)&nbsp;the recorded accountability for
assets is compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. Except as
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">described in the Registration Statement, the General Disclosure Package and the
Prospectus, since the date of the Company&#146;s formation, there has been (1)&nbsp;no material
weakness in the Company&#146;s internal control over financial reporting (whether or not
remediated) and (2)&nbsp;no change in the Company&#146;s internal control over financial reporting
that has materially affected, or is reasonably likely to materially affect, the Company&#146;s
internal control over financial reporting. Each of the Company and the Operating
Partnership maintains disclosure controls and procedures that are effective to perform the
functions for which they were established and are designed to ensure that information
required to be disclosed by the Company in the reports that it files or submits under the
1934 Act is recorded, processed, summarized and reported, within the time periods specified
in the Commission&#146;s rules and forms, and is accumulated and communicated to the Company&#146;s
management, including its principal executive officer or officers and principal financial
officer or officers, as appropriate, to allow timely decisions regarding disclosure.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxii) <U>Compliance with the Sarbanes-Oxley Act. </U>The Company has taken all
necessary actions to ensure that, upon the effectiveness of the Registration Statement, it
will be in compliance with all applicable provisions of the Sarbanes-Oxley Act of 2002 and
all rules and regulations promulgated thereunder or implementing the provisions thereof (the
&#147;Sarbanes-Oxley Act&#148;) which the Company is required to comply with as of the effectiveness
of the Registration Statement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxiii) <U>Tax Returns and Payment of Taxes</U>. All United States federal income tax
returns of the Company and the Operating Partnership required by law to be filed have been
filed and all taxes shown by such returns or otherwise assessed, which are due and payable,
have been paid, except assessments against which appeals have been or will be promptly taken
in good faith and as to which adequate reserves have been provided and will be maintained
except in any case in which the failure to so file tax returns or pay such taxes would not
result in a Material Adverse Effect. Each of the Company and the Operating Partnership has
filed all other tax returns that are required to have been filed by them pursuant to
applicable foreign, state, local or other law except insofar as the failure to file such
returns would not result in a Material Adverse Effect, and have paid all taxes due pursuant
to such returns or pursuant to any assessment received by the Company and the Operating
Partnership, except for such taxes, if any, as are being contested in good faith and as to
which adequate reserves have been provided and will be maintained and except insofar as the
failure to pay such taxes and assessments would not result in a Material Adverse Effect.
All such returns, if any, are true, correct and complete in all material respects and were
prepared in compliance with applicable law.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxiv) <U>Insurance</U>. Each of the Company and the Operating Partnership carries or
is entitled to the benefits of insurance, with financially sound and reputable insurers, in
such amounts and covering such risks as the Company believes is generally maintained by
companies of established repute engaged in the same or similar business, and all such
insurance is in full force and effect. The Company has no reason to believe that it or the
Operating Partnership will not be able (A)&nbsp;to renew its existing insurance coverage as and
when such policies expire or (B)&nbsp;to obtain comparable coverage from similar institutions as
may be necessary or appropriate to conduct its business as now conducted and at a cost that
would not result in a Material Adverse Effect. Neither the Company nor the Operating
Partnership has been denied any insurance coverage which it has sought or for which it has
applied.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxv) <U>Statistical and Market-Related Data</U>. The statistical and market-related
data included in the Registration Statement, the General Disclosure Package and the
Prospectus are based on or derived from sources that the Company believes to be reliable and
accurate.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxvi) <U>REIT Qualification</U>. Commencing with the Company&#146;s short taxable year
ending December&nbsp;31, 2009, the Company will be organized and will operate in a manner so as
to qualify as a real estate investment trust (a &#147;REIT&#148;) under Sections&nbsp;856 through 860 of
the Internal Revenue Code of 1986, as amended (the &#147;Code&#148;), and the Company will elect to be
taxed as a REIT under the Code effective for its short taxable year ending December&nbsp;31,
2009. The proposed method of operation of the Company as described in the Registration
Statement, the General Disclosure Package and the Prospectus will enable the Company to meet
the requirements for qualification and taxation as a REIT under the Code for its taxable
years ending December&nbsp;31, 2009 and thereafter.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxvii) <U>Operating Partnership</U>. The Operating Partnership will be classified as
a partnership for purposes of the Code and will not be treated as a publicly traded
partnership, association or corporation.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxviii) <U>Foreign Corrupt Practices Act</U>. Neither the Company nor, to the
knowledge of the Company, any trustee, officer, agent, employee, affiliate or other person
acting on behalf of the Company or the Operating Partnership is aware of or has taken any
action, directly or indirectly, that would result in a violation by any of such persons of
the Foreign Corrupt Practices Act of 1977, as amended, and the rules and regulations
thereunder (the &#147;FCPA&#148;), including, without limitation, making use of the mails or any means
or instrumentality of interstate commerce corruptly in furtherance of an offer, payment,
promise to pay or authorization of the payment of any money, or other property, gift,
promise to give, or authorization of the giving of anything of value to any &#147;foreign
official&#148; (as such term is defined in the FCPA) or any foreign political party or official
thereof or any candidate for foreign political office, in contravention of the FCPA and the
Company and, to the knowledge of the Company, its affiliates have conducted their businesses
in compliance with the FCPA and have instituted and maintain policies and procedures
designed to ensure, and which are reasonably expected to continue to ensure, continued
compliance therewith.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxix) <U>Money Laundering Laws</U>. The operations of each of the Company and the
Operating Partnership has been conducted at all times in compliance with applicable
financial recordkeeping and reporting requirements of the Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the
rules and regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency (collectively, the
&#147;Money Laundering Laws&#148;) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Company or the
Operating Partnership with respect to the Money Laundering Laws is pending or, to the
knowledge of the Company, threatened.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxx) <U>OFAC</U>. Neither the Company nor, to the knowledge of the Company, any
trustee, officer, agent, employee, affiliate or person acting on behalf of the Company or
the Operating Partnership is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (&#147;OFAC&#148;); and the Company
will not directly or indirectly use the proceeds of the offering, or lend, contribute or
otherwise make available such proceeds to the Operating Partnership, joint venture partner
or other person or entity, for the purpose of financing the activities of any person
currently subject to any U.S. sanctions administered by OFAC.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxxi) <U>Partnership Agreement</U>. The Agreement of Limited Partnership of the
Operating Partnership (the &#147;Partnership Agreement&#148;), has been duly and validly authorized by
the
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">Company, in its capacity as sole General Partner of the Operating Partnership, and at
the Closing Time will be duly executed and delivered by the Company, as general partner, and
will be a valid and binding agreement, enforceable in accordance with its terms, except to
the extent that enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors&#146; rights generally and by general equitable
principles.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxxii) <U>Listing of Securities</U>. The Securities have been approved for listing on
the New York Stock Exchange, subject to official notice of issuance
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxxiii) <U>Finder&#146;s Fees</U>. The Company has not incurred any liability for any
finder&#146;s fees or similar payments in connection with the transactions herein contemplated,
except as may otherwise exist with respect to the Underwriters pursuant to this Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxxiv) <U>Certain Relationships</U>. No relationship, direct or indirect, exists
between or among the Company or the Operating Partnership, on the one hand, and the
trustees, officers, shareholders or partners of the Company or the Operating Partnership, on
the other hand, which is required by the rules of FINRA to be described in the Registration
Statement, the General Disclosure Package or the Prospectus which is not so described. The
Company has not, directly or indirectly, including through the Operating Partnership,
extended credit, arranged to extend credit, or renewed any extension of credit, in the form
of a personal loan, to or for any trustee or executive officer of the Company or the
Operating Partnership, or to or for any family member or affiliate of any trustee or
executive officer of the Company or the Operating Partnership.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxxv) <U>Authorization of Common Shares in Concurrent Offering</U>. The 135,000
Common Shares (the &#147;Concurrent Shares&#148;) to be sold to Mr.&nbsp;Jon E. Bortz, the Company&#146;s
Chairman, President and Chief Executive Officer, and Raymond D. Martz, the Company&#146;s
Executive Vice President and Chief Financial Officer, in a private offering concurrent with
the offering of the Securities as described in the Registration Statement, the General
Disclosure Package and the Prospectus (the &#147;Concurrent Offering&#148;), pursuant to private
placement subscription agreements (the &#147;Concurrent Offering Private Placement Subscription
Agreements&#148;), dated as of the date of this Agreement, between the Company on the one hand,
and Mr.&nbsp;Bortz and Mr.&nbsp;Martz, respectively, on the other, have been duly authorized for
issuance and sale, and when issued and delivered by the Company pursuant to the Concurrent
Offering Private Placement Subscription Agreements, will be validly issued and fully paid
and non-assessable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxxvi) <U>Concurrent Offering Private Placement Purchase Agreement</U>. The
Concurrent Offering Private Placement Subscription Agreements have been duly authorized,
executed and delivered by the Company and constitute valid and binding agreements of the
Company, enforceable against the Company in accordance with their terms, except to the
extent that enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditors&#146; rights generally and by general equitable
principles.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xxxvii) <U>Reserved Securities Sales</U>. The Company has not offered, or caused the
Representatives to offer, Reserved Securities to any person with the specific intent to
unlawfully influence (A)&nbsp;a customer or supplier of the Company or any of its affiliates to
alter the customer&#146;s or supplier&#146;s level or type of business with any such entity or (B)&nbsp;a
trade journalist or publication to write or publish favorable information about the Company
or any of its affiliates, or their respective businesses or products.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;<I>Officers&#146; Certificates</I>. Any certificate signed by any officer of the Company or the
Operating Partnership delivered to the Representatives or to counsel for the Underwriters shall be
deemed a representation and warranty by the Company or the Operating Partnership, as the case may
be, to each Underwriter as to the matters covered thereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 2. <U>Sale and Delivery to Underwriters; Closing</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;<I>Initial Securities</I>. On the basis of the representations and warranties herein contained
and subject to the terms and conditions herein set forth, the Company agrees to sell to each
Underwriter, severally and not jointly, and each Underwriter, severally and not jointly, agrees to
purchase from the Company at the price per share set forth in Schedule&nbsp;C, the number of Initial
Securities set forth in Schedule&nbsp;A opposite the name of such Underwriter, plus any additional
number of Initial Securities which such Underwriter may become obligated to purchase pursuant to
the provisions of Section&nbsp;10 hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;<I>Option Securities</I>. In addition, on the basis of the representations and warranties herein
contained and subject to the terms and conditions herein set forth, the Company hereby grants an
option to the Underwriters, severally and not jointly, to purchase up to the number of Option
Securities set forth in Schedule&nbsp;B, at the price per share set forth in Schedule&nbsp;C, less an amount
per share equal to any dividends or distributions declared by the Company and payable on the
Initial Securities but not payable on the Option Securities. The option hereby granted will expire
30&nbsp;days after the date hereof and may be exercised in whole or in part from time to time only for
the purpose of covering overallotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Representatives to the Company setting
forth the number of Option Securities as to which the several Underwriters are then exercising the
option and the time and date of payment and delivery for such Option Securities. Any such time and
date of delivery (a &#147;Date of Delivery&#148;) shall be determined by the Representatives, but shall not
be later than seven full business days after the exercise of said option, nor in any event prior to
the Closing Time, as hereinafter defined. If the option is exercised as to all or any portion of
the Option Securities, each of the Underwriters, acting severally and not jointly, will purchase
that proportion of the total number of Option Securities then being purchased which the number of
Initial Securities set forth in Schedule&nbsp;A opposite the name of such Underwriter bears to the total
number of Initial Securities, subject in each case to such adjustments as the Representatives in
their discretion shall make to eliminate any sales or purchases of fractional shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;<I>Payment</I>. Payment of the purchase price for, and delivery of the Initial Securities shall
be made at the offices of Sidley Austin <FONT style="font-variant: SMALL-CAPS">llp</FONT>, 787 Seventh Avenue, New York, NY 10019, or at
such other place as shall be agreed upon by the Representatives and the Company, at 9:00 A.M.
(Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M. (Eastern time) on any
given day) business day after the date hereof (unless postponed in accordance with the provisions
of Section&nbsp;10), or such other time not later than ten business days after such date as shall be
agreed upon by the Representatives and the Company (such time and date of payment and delivery
being herein called the &#147;Closing Time&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In addition, in the event that any or all of the Option Securities are purchased by the
Underwriters, payment of the purchase price for, and delivery of such Option Securities shall be
made at the above-mentioned offices, or at such other place as shall be agreed upon by the
Representatives and the Company, on each Date of Delivery as specified in the notice from the
Representatives to the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Payment shall be made to the Company by wire transfer of immediately available funds to a bank
account designated by the Company against delivery to the Representatives for the respective
accounts of the Underwriters of the Securities to be purchased by them. It is understood that each
Underwriter has authorized Merrill Lynch, for its account, to accept delivery of, receipt for, and
make payment of the purchase price for, the Initial Securities and the Option Securities, if any,
which it has agreed to purchase.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Merrill Lynch, Raymond James and Wells Fargo, each individually and not as representative of
the Underwriters, may (but shall not be obligated to) make payment of the purchase price for the
Initial Securities or the Option Securities, if any, to be purchased by any Underwriter whose funds
have not been received by the Closing Time or the relevant Date of Delivery, as the case may be,
but such payment shall not relieve such Underwriter from its obligations hereunder.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;<I>Conditional Payment to the Underwriters</I>. In addition to the underwriting discount
reflected in the price per share to the Underwriters referenced in Section 2(a) or 2(b), as the
case may be, the Company agrees to pay to Merrill Lynch, for the account of the Underwriters, an
amount equal to the product of the amount per share set forth on Schedule&nbsp;C multiplied by the
number of Securities purchased by the Underwriters pursuant to this Agreement (the &#147;Conditional
Payment&#148;), at such time as the Company has completed the purchase of assets in accordance with its
investment strategy described in the Prospectus with an aggregate purchase price (including the
amount of any outstanding indebtedness assumed or incurred by the Company) at least equal to the
net proceeds received by the Company from the sale of the Securities (after deducting the full
underwriting discount payable to the Underwriters in accordance with Sections&nbsp;2(a), 2(b) and 2(c)
hereof and the other offering expenses described in Part&nbsp;II to the Registration Statement). The
Conditional Payment shall be payable by the Company to the Underwriters by wire transfer of
immediately available funds to a bank account designated by Merrill Lynch no later than the date
which is five (5)&nbsp;business days after the date the Company purchases the asset or assets that
causes the Company to meet or exceed the aggregate purchase price described above.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;<I>Denominations; Registration</I>. Certificates for the Initial Securities and the Option
Securities, if any, shall be in such denominations and registered in such names as the
Representatives may request in writing at least one full business day before the Closing Time or
the relevant Date of Delivery, as the case may be. The certificates for the Initial Securities and
the Option Securities, if any, will be made available for examination and packaging by the
Representatives in The City of New York not later than 10:00&nbsp;A.M. (Eastern time) on the business
day prior to the Closing Time or the relevant Date of Delivery, as the case may be.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 3. <U>Covenants of the Company and the Operating Partnership</U>. The Company and
the Operating Partnership, jointly and severally, covenant with each Underwriter as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;<I>Compliance with Securities Regulations and Commission Requests</I>. The Company, subject to
Section&nbsp;3(b), will comply with the requirements of Rule&nbsp;430A, and will notify the Representatives
immediately, and confirm the notice in writing, (i)&nbsp;when any post-effective amendment to the
Registration Statement shall become effective, or any supplement to the Prospectus or any amended
Prospectus shall have been filed, (ii)&nbsp;of the receipt of any comments from the Commission, (iii)&nbsp;of
any request by the Commission for any amendment to the Registration Statement or any amendment or
supplement to the Prospectus or any document incorporated by reference therein or for additional
information, (iv)&nbsp;of the issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or of any order preventing or suspending the use of any preliminary
prospectus, or of the suspension of the qualification of the Securities for offering or sale in any
jurisdiction, or of the initiation or threatening of any proceedings for any of such purposes or of
any examination pursuant to Section 8(e) of the 1933 Act concerning the Registration Statement and
(v)&nbsp;if the Company becomes the subject of a proceeding under Section&nbsp;8A of the 1933 Act in
connection with the offering of the Securities. The Company will effect the filings required under
Rule&nbsp;424(b), in the manner and within the time period required by Rule 424(b) (without reliance on
Rule&nbsp;424(b)(8)), and will take such steps as it deems necessary to ascertain promptly whether the
form of prospectus transmitted for filing under Rule 424(b) was received for filing by the
Commission and, in the event that it was not, it will promptly file such prospectus. The Company
will make every reasonable effort to prevent the issuance of any stop order and, if any stop order
is issued, to obtain the lifting thereof at the earliest possible moment.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;<I>Filing of Amendments and Exchange Act Documents</I>. The Company will give the
Representatives notice of its intention to file or prepare any amendment to the Registration
Statement (including any filing under Rule&nbsp;462(b)) or any amendment, supplement or revision to
either the prospectus included in the Registration Statement at the time it became effective or to
the Prospectus, and will furnish the Representatives with copies of any such documents a reasonable
amount of time prior to such proposed filing or use, as the case may be, and will not file or use
any such document to which the Representatives or counsel for the Underwriters shall object. The
Company has given the Representatives notice of any filings made pursuant to the 1934 Act or the
rules and regulations of the Commission under the 1934 Act (the &#147;1934 Act Regulations&#148;) within 48
hours prior to the execution of this Agreement; the Company will give the Representatives notice of
its intention to make any such filing from the Applicable Time to the Closing Time and will furnish
the Representatives with copies of any such documents a reasonable amount of time prior to such
proposed filing, as the case may be, and will not file or use any such document to which the
Representatives or counsel for the Underwriters shall object.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;<I>Delivery of Registration Statements</I>. The Company has furnished or will deliver to the
Representatives and counsel for the Underwriters, without charge, signed copies of the Registration
Statement as originally filed and of each amendment thereto (including exhibits filed therewith)
and signed copies of all consents and certificates of experts, and will also deliver to the
Representatives, without charge, a conformed copy of the Registration Statement as originally filed
and of each amendment thereto (without exhibits) for each of the Underwriters. The copies of the
Registration Statement and each amendment thereto furnished to the Underwriters will be identical
to the electronically transmitted copies thereof filed with the Commission pursuant to EDGAR,
except to the extent permitted by Regulation&nbsp;S-T.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;<I>Delivery of Prospectuses</I>. The Company has delivered to each Underwriter, without charge,
as many copies of each preliminary prospectus as such Underwriter reasonably requested, and the
Company hereby consents to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to each Underwriter, without charge, during the period when the Prospectus is
required to be delivered (or but for the exception afforded by Rule&nbsp;172 would be required to be
delivered) under the 1933 Act, such number of copies of the Prospectus (as amended or supplemented)
as such Underwriter may reasonably request. The Prospectus and any amendments or supplements
thereto furnished to the Underwriters will be identical to the electronically transmitted copies
thereof filed with the Commission pursuant to EDGAR, except to the extent permitted by Regulation
S-T.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;<I>Continued Compliance with Securities Laws</I>. The Company will comply with the 1933 Act and
the 1933 Act Regulations so as to permit the completion of the distribution of the Securities as
contemplated in this Agreement and in the Prospectus. If at any time when a prospectus is required
(or but for the exception afforded by Rule&nbsp;172 would be required) by the 1933 Act to be delivered
in connection with sales of the Securities, any event shall occur or condition shall exist as a
result of which it is necessary, in the opinion of counsel for the Underwriters or for the Company,
to amend the Registration Statement or amend or supplement the Prospectus in order that the
Prospectus will not include any untrue statements of a material fact or omit to state a material
fact necessary in order to make the statements therein not misleading in the light of the
circumstances existing at the time it is delivered to a purchaser, or if it shall be necessary, in
the opinion of such counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act
Regulations, the Company will promptly prepare and file with the Commission, subject to Section
3(b), such amendment or supplement as may be necessary to correct such statement or omission or to
make the Registration Statement or the Prospectus comply with such requirements, and the Company
will furnish to the Underwriters such number of copies of such amendment or supplement as the
Underwriters may reasonably request. If at any time following issuance of an Issuer Free Writing
Prospectus there occurred or occurs an event or development as a result of
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">which such Issuer Free Writing Prospectus conflicted or would conflict with the information
contained in the Registration Statement relating to the Securities or included or would include an
untrue statement of a material fact or omitted or would omit to state a material fact necessary in
order to make the statements therein, in the light of the circumstances, prevailing at that
subsequent time, not misleading, the Company will promptly notify the Representatives and will
promptly amend or supplement, at its own expense, such Issuer Free Writing Prospectus to eliminate
or correct such conflict, untrue statement or omission.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;<I>Blue Sky Qualifications</I>. The Company will use its best efforts, in cooperation with the
Underwriters, to qualify the Securities for offering and sale under the applicable securities laws
of such states and other jurisdictions (domestic or foreign) as the Representatives may designate
and to maintain such qualifications in effect for a period of not less than one year from the later
of the effective date of the Registration Statement and any Rule 462(b) Registration Statement;
provided, however, that the Company shall not be obligated to file any general consent to service
of process or to qualify as a foreign trust or as a dealer in securities in any jurisdiction in
which it is not so qualified or to subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;<I>Rule&nbsp;158</I>. The Company will timely file such reports pursuant to the 1934 Act as are
necessary in order to make generally available to its securityholders as soon as practicable an
earnings statement for the purposes of, and to provide to the Underwriters the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;<I>Use of Proceeds</I>. The Company will use the net proceeds received by it from the sale of
the Securities in the manner specified in the Prospectus under &#147;Use of Proceeds.&#148;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;<I>Listing</I>. The Company will use its best efforts to effect the listing of the Common Shares
(including the Securities) on the New York Stock Exchange.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;<I>Books and Records; Accounting Controls and Disclosure Controls</I>. Each of the Company and
the Operating Partnership will maintain and keep accurate books and records reflecting their assets
and will maintain a system of internal accounting controls sufficient to provide reasonable
assurances that: (A)&nbsp;transactions are executed in accordance with management&#146;s general or
specific authorization; (B)&nbsp;transactions are recorded as necessary to permit preparation of
financial statements in conformity with GAAP and to maintain accountability for assets; (C)&nbsp;access
to assets is permitted only in accordance with management&#146;s general or specific authorization; and
(D)&nbsp;the recorded accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company and the Operating Partnership will employ disclosure controls and procedures that
are effective to perform the functions for which they were established and designed to ensure that
information required to be disclosed by the Company in the reports that it files or submits under
the 1934 Act is recorded, processed, summarized and reported, within the time periods specified in
the Commission&#146;s rules and forms, and is accumulated and communicated to the Company&#146;s management,
including its principal executive officer or officers and principal financial officer or officers,
as appropriate, to allow timely decisions regarding disclosure.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;<I>REIT Qualification</I>. The Company will use its best efforts to qualify and to elect to
qualify as a REIT, effective as of the first day of its short taxable year ending December&nbsp;31, 2009
and thereafter will use its best efforts to continue to meet the requirements to qualify as a REIT
under the Code until the Board of Trustees of the Company determines that it is no longer in the
best interests of the Company to qualify as a REIT.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;<I>Compliance with the Sarbanes-Oxley Act</I>. The Company will take all necessary steps to
comply with the provisions of the Sarbanes-Oxley Act which will become applicable to the Company
after the effectiveness of the Registration Statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;<I>Restriction on Sale of Securities</I>. During a period of 180&nbsp;days from the date of the
Prospectus, the Company will not, without the prior written consent of the Representatives,
directly or indirectly (i)&nbsp;offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or warrant for the sale
of, or lend or otherwise transfer or dispose of any Common Shares or any securities convertible
into or exercisable or exchangeable for or repayable with Common Shares, whether owned as of the
date hereof or hereafter acquired or with respect to which such person has or hereafter acquires
the power of disposition, or file, or cause to be filed, any registration statement under the 1933
Act with respect to any of the foregoing (collectively, the &#147;Lock-Up Securities&#148;) or (ii)&nbsp;enter
into any swap or any other agreement or any transaction that transfers, in whole or in part,
directly or indirectly, the economic consequence of ownership of the Lock-Up Securities, whether
any such swap, agreement or transaction is to be settled by delivery of Common Shares or other
securities, in cash or otherwise. The foregoing sentence shall not apply to (A)&nbsp;the Concurrent
Shares issued by the Company in the Concurrent Offering (B)&nbsp;the Securities to be sold hereunder,
(C)&nbsp;any Common Shares issued pursuant to the Company&#146;s 2009 Equity Incentive Plan or dividend
reinvestment plan in each case, as described in the Registration Statement, the General Disclosure
Package and the Prospectus and (D)&nbsp;Common Shares issued in connection with the acquisition of
property or assets or upon conversion of securities issued in connection with the acquisition of
any property or assets, in an amount not to exceed an aggregate of 1,765,000 Common Shares.
Notwithstanding the foregoing, if (1)&nbsp;during the last 17&nbsp;days of the 180-day restricted period the
Company issues an earnings release or material news or a material event relating to the Company
occurs or (2)&nbsp;prior to the expiration of the 180-day restricted period, the Company announces that
it will release earnings results or becomes aware that material news or a material event will occur
during the 16-day period beginning on the last day of the 180-day restricted period, the
restrictions imposed in this clause (m)&nbsp;shall continue to apply until the expiration of the 18-day
period beginning on the issuance of the earnings release or the occurrence of the material news or
material event, unless the Representatives waive in writing, such extension. The Company will
provide the Representatives and each individual subject to the restricted periods pursuant to the
lockup letters described in Section 5(j) with prior notice of any such announcement that gives rise
to an extension of the restricted periods.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n)&nbsp;<I>Reporting Requirements</I>. The Company, during the period when a prospectus is required (or
but for the exception in Rule&nbsp;172 would be required) to be delivered under the 1933 Act, will file
all documents required to be filed with the Commission pursuant to the 1934 Act within the time
periods required by the 1934 Act and the 1934 Act Regulations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o)&nbsp;<I>Issuer Free Writing Prospectuses</I>. The Company represents and agrees that, unless it
obtains the prior consent of the Representatives, and each Underwriter represents and agrees that,
unless it obtains the prior consent of the Company and the Representatives, it has not made and
will not make any offer relating to the Securities that would constitute an &#147;issuer free writing
prospectus,&#148; as defined in Rule&nbsp;433, or that would otherwise constitute a &#147;free writing
prospectus,&#148; as defined in Rule&nbsp;405, required to be filed with the Commission. Any such free
writing prospectus consented to by the Company and the Representatives is hereinafter referred to
as a &#147;Permitted Free Writing Prospectus.&#148; The Company represents that it has treated or agrees
that it will treat each Permitted Free Writing Prospectus as an &#147;issuer free writing prospectus,&#148;
as defined in Rule&nbsp;433, and has complied and will comply with the requirements of Rule&nbsp;433
applicable to any Permitted Free Writing Prospectus, including timely filing with the Commission
where required, legending and record keeping.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 4. <U>Payment of Expenses</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;<I>Expenses</I>. The Company and/or the Operating Partnership will pay or cause to be paid all
expenses incident to the performance of their obligations under this Agreement, including (i)&nbsp;the
preparation, printing and filing of the Registration Statement (including financial statements and
exhibits) as originally filed and of each amendment thereto, (ii)&nbsp;the preparation, printing and
delivery to the Underwriters of this Agreement and such other documents as may be required in
connection with the offering, purchase, sale, issuance or delivery of the Securities, (iii)&nbsp;the
preparation, issuance and delivery of the certificates for the Securities to the Underwriters,
including any stock or other transfer taxes and any stamp or other duties payable upon the sale,
issuance or delivery of the Securities to the Underwriters, (iv)&nbsp;the fees and disbursements of the
Company&#146;s and the Operating Partnership&#146;s counsel, accountants and other advisors, (v)&nbsp;the
qualification of the Securities under securities laws in accordance with the provisions of Section
3(f) hereof, including filing fees and the reasonable fees and disbursements of counsel for the
Underwriters in connection therewith and in connection with the preparation of the Blue Sky Survey
and any supplement thereto, (vi)&nbsp;the printing and delivery to the Underwriters of copies of each
preliminary prospectus, any Permitted Free Writing Prospectus and of the Prospectus and any
amendments or supplements thereto and any costs associated with electronic delivery of any of the
foregoing by the Underwriters to investors, (vii)&nbsp;the preparation, printing and delivery to the
Underwriters of copies of the Blue Sky Survey and any supplement thereto, (viii)&nbsp;the fees and
expenses of any transfer agent or registrar for the Securities, (ix)&nbsp;the costs and expenses of the
Company relating to investor presentations on any &#147;road show&#148; undertaken in connection with the
marketing of the Securities, including without limitation, expenses associated with the production
of road show slides and graphics, fees and expenses of any consultants engaged in connection with
the road show presentations, travel and lodging expenses of the representatives and officers of the
Company and any such consultants, and the cost of aircraft and other transportation chartered in
connection with the road show, (x)&nbsp;the filing fees incident to, and the reasonable fees and
disbursements of counsel to the Underwriters in connection with, the review by FINRA of the terms
of the sale of the Securities, (xi)&nbsp;the fees and expenses incurred in connection with the listing
of the Securities on the New York Stock Exchange, (xii)&nbsp;all costs and expenses of the Underwriters,
including the fees and disbursements of counsel for the Underwriters, in connection with matters
related to the Reserved Securities which are designated by the Company for sale to Invitees and
(xiii)&nbsp;the costs and expenses (including without limitation any damages or other amounts payable in
connection with legal or contractual liability) associated with the reforming of any contracts for
sale of the Securities made by the Representatives caused by a breach of the representation
contained in the third paragraph of Section&nbsp;1(a)(i).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;<I>Termination of Agreement</I>. If this Agreement is terminated by the Representatives in
accordance with the provisions of Section&nbsp;5, Section&nbsp;9(a)(i) or Section&nbsp;11 hereof, the Company
shall reimburse the Underwriters for all of their out-of-pocket expenses, including the reasonable
fees and disbursements of counsel for the Underwriters.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 5. <U>Conditions of Underwriters&#146; Obligations</U>. The obligations of the several
Underwriters hereunder are subject to the accuracy of the representations and warranties of the
Company and the Operating Partnership contained in Section&nbsp;1 hereof or in certificates of any
officer of the Company or of the Company as general partner of the Operating Partnership delivered
pursuant to the provisions hereof, to the performance by the Company and the Operating Partnership
of their respective covenants and other obligations hereunder, and to the following further
conditions:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;<I>Effectiveness of Registration Statement</I>. The Registration Statement, including any Rule
462(b) Registration Statement, has become effective and at the Closing Time no stop order
suspending the effectiveness of the Registration Statement shall have been issued under the 1933
Act or proceedings therefor initiated or threatened by the Commission, and any request on the part
of the
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Commission for additional information shall have been complied with to the reasonable satisfaction of counsel
to the Underwriters. A prospectus containing the Rule&nbsp;430A Information shall have been filed with
the Commission in the manner and within the time frame required by Rule 424(b) without reliance on
Rule&nbsp;424(b)(8) or a post-effective amendment providing such information shall have been filed and
declared effective in accordance with the requirements of Rule&nbsp;430A.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;<I>Opinion of Counsel for the Company and the Operating Partnership</I>. At the Closing Time,
the Representatives shall have received the favorable opinions, dated as of the Closing Time, of
Hunton &#038; Williams LLP and Venable LLP, counsel for the Company and the Operating Partnership, in
form and substance satisfactory to counsel for the Underwriters, together with signed or reproduced
copies of such letter for each of the other Underwriters to the effect set forth in Exhibits A-1,
A-2, A-3 and Exhibit&nbsp;B hereto, respectively.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;<I>Opinion of Counsel for the Underwriters</I>. At the Closing Time, the Representatives shall
have received the favorable opinion, dated as of the Closing Time, of Sidley Austin <FONT style="font-variant: SMALL-CAPS">llp</FONT>,
counsel for the Underwriters, together with signed or reproduced copies of such letter for each of
the other Underwriters with respect to such matters as the Representatives shall reasonably
request. In giving such opinion such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the law of the State of New York and the federal law of the United States,
upon the opinions of counsel satisfactory to the Representatives.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;<I>Company Officers&#146; Certificate</I>. At the Closing Time, there shall not have been, since the
date hereof or since the respective dates as of which information is given in the Registration
Statement, the Prospectus or the General Disclosure Package, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs, business prospects,
management, assets or properties of the Company and the Operating Partnership considered as one
enterprise, whether or not arising in the ordinary course of business, and the Representatives
shall have received a certificate of the President of the Company and of the Chief Financial
Officer of the Company dated as of the Closing Time, to the effect that (i)&nbsp;there has been no such
material adverse change, (ii)&nbsp;the representations and warranties in Section 1(a) hereof are true
and correct with the same force and effect as though expressly made at and as of the Closing Time,
(iii)&nbsp;the Company has complied with all agreements and satisfied all conditions on its part to be
performed or satisfied at or prior to the Closing Time, and (iv)&nbsp;no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings for that purpose
have been instituted or are pending or, to their knowledge, contemplated by the Commission.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;<I>Operating Partnership Officers&#146; Certificate. </I>The Representatives shall have received a
certificate of the President and of the Chief Financial Officer of the Company, as general partner
of the Operating Partnership, dated as of the Closing Time, to the effect that (i)&nbsp;the
representations and warranties in Section 1(a) applicable to the Operating Partnership are true and
correct with the same force and effect as though expressly made at and as of the Closing Time and
(ii)&nbsp;the Operating Partnership has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the Closing Time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f)&nbsp;<I>Accountant&#146;s Comfort Letter</I>. At the time of the execution of this Agreement, the
Representatives shall have received from KPMG LLP a letter dated such date, in form and substance
satisfactory to the Representatives, together with signed or reproduced copies of such letter for
each of the other Underwriters containing statements and information of the type ordinarily
included in accountants&#146; &#147;comfort letters&#148; to underwriters with respect to the financial statements
and certain financial information contained in the Registration Statement, the General Disclosure
Package and the Prospectus.
</DIV>

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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g)&nbsp;<I>Bring-down Comfort Letter</I>. At the Closing Time, the Representatives shall have received
from KPMG LLP a letter, dated as of the Closing Time, to the effect that they reaffirm the
statements made in the letter furnished pursuant to subsection (f)&nbsp;of this Section, except that the
specified cut-off date for the procedures referred to shall be a date not more than three business
days prior to the Closing Time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h)&nbsp;<I>Approval of Listing</I>. At the Closing Time, the Securities shall have been approved for
listing on the New York Stock Exchange, subject only to official notice of issuance.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i)&nbsp;<I>No Objection</I>. FINRA shall have confirmed that it has not raised any objection with
respect to the fairness and reasonableness of the underwriting terms and arrangements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j)&nbsp;<I>Lock up Agreements</I>. At the date of this Agreement, the Representatives shall have
received an agreement substantially in the form of Exhibit&nbsp;C hereto signed by the persons listed on
Schedule&nbsp;D hereto and such agreements shall be in full force and effect.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k)&nbsp;<I>Conditions to Purchase of Option Securities</I>. In the event that the Underwriters exercise
their option provided in Section 2(b) hereof to purchase all or any portion of the Option
Securities, the representations and warranties of the Company and the Operating Partnership
contained herein and the statements in any certificates furnished by the Company and the Operating
Partnership hereunder shall be true and correct as of each Date of Delivery and, at the relevant
Date of Delivery, the Representatives shall have received:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <U>Company Officers&#146; Certificate</U>. A certificate, dated such Date of Delivery,
of the President of the Company and of the Chief Financial Officer of the Company confirming
that the certificate delivered at the Closing Time pursuant to Section 5(d) hereof remains
true and correct as of such Date of Delivery.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <U>Operating Partnership Officers&#146; Certificate</U>. A certificate, dated such
Date of Delivery, of the President and of the Chief Financial Officer of the Company, as
general partner of the Operating Partnership, confirming that the certificate delivered at
the Closing Time pursuant to Section 5(e) hereof remains true and correct as of such Date of
Delivery.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) <U>Opinion of Counsel for the Company and the Operating Partnership</U>. The
opinions of Hunton &#038; Williams LLP and Venable LLP, counsel for the Company and the Operating
Partnership, dated such Date of Delivery, relating to the Option Securities to be purchased
on such Date of Delivery and otherwise to the same effect as the form of opinions set forth
in Exhibits A-1, A-2, A-3 and B hereto.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) <U>Opinion of Counsel for the Underwriters</U>. The favorable opinion of Sidley
Austin <FONT style="font-variant: SMALL-CAPS">llp</FONT>, counsel for the Underwriters, dated such Date of Delivery, relating to
the Option Securities to be purchased on such Date of Delivery and otherwise to the same
effect as the opinion required by Section 5(c) hereof.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <U>Bring-down Comfort Letter</U>. A letter from KPMG LLP, in form and substance
satisfactory to the Representatives and dated such Date of Delivery, substantially in the
same form and substance as the letter furnished to the Representatives pursuant to Section
5(f) hereof, except that the &#147;specified date&#148; in the letter furnished pursuant to this
paragraph shall be a date not more than three days prior to such Date of Delivery.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l)&nbsp;<I>Additional Documents</I>. At the Closing Time and at each Date of Delivery counsel for the
Underwriters shall have been furnished with such documents and opinions as they may require for the
purpose of enabling them to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the representations or warranties, or
the fulfillment of any of the conditions, herein contained; and all proceedings taken by the
Company in connection with the issuance and sale of the Securities as herein contemplated shall be
satisfactory in form and substance to the Representatives and counsel for the Underwriters.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m)&nbsp;<I>Termination of Agreement</I>. If any condition specified in this Section shall not have been
fulfilled when and as required to be fulfilled, this Agreement, or, in the case of any condition to
the purchase of Option Securities on a Date of Delivery which is after the Closing Time, the
obligations of the several Underwriters to purchase the relevant Option Securities, may be
terminated by the Representatives by notice to the Company at any time at or prior to the Closing
Time or such Date of Delivery, as the case may be, and such termination shall be without liability
of any party to any other party except as provided in Section&nbsp;4 and except that Sections&nbsp;1, 6, 7
and 8 shall survive any such termination and remain in full force and effect.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 6. <U>Indemnification</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;<I>Indemnification of Underwriters by the Company and the Operating Partnership</I>. The Company
and the Operating Partnership, jointly and severally, agree to indemnify and hold harmless each
Underwriter, its affiliates, as such term is defined in Rule 501(b) under the 1933 Act (each, an
&#147;Affiliate&#148;), its selling agents and each person, if any, who controls any Underwriter within the
meaning of Section&nbsp;15 of the 1933 Act or Section&nbsp;20 of the 1934 Act as follows:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, arising out of any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement (or any amendment thereto), including the Rule&nbsp;430A
Information or the omission or alleged omission therefrom of a material fact required to be
stated therein or necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact included in any
preliminary prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package
or the Prospectus (or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) against any and all loss, liability, claim, damage and expense whatsoever, as
incurred, to the extent of the aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or threatened, or
of any claim whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section 6(d) below) any such
settlement is effected with the written consent of the Company;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) against any and all expense whatsoever, as incurred (including the fees and
disbursements of counsel chosen by the Representatives), reasonably incurred in
investigating, preparing or defending against any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or omission, or any such alleged untrue
statement or omission, to the extent that any such expense is not paid under (i)&nbsp;or (ii)
above;
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>provided</U>, <U>however</U>, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue statement or omission
or alleged untrue statement or omission made in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through the Representatives expressly for
use in the Registration Statement (or any amendment thereto), including the Rule&nbsp;430A Information,
or any preliminary prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package
or the Prospectus (or any amendment or supplement thereto).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;<I>Indemnification of Company, Operating Partnership, Trustees and Officers</I>. Each
Underwriter severally agrees to indemnify and hold harmless the Company, the Operating Partnership,
their trustees, each of their officers who signed the Registration Statement, and each person, if
any, who controls either the Company or the Operating Partnership within the meaning of Section&nbsp;15
of the 1933 Act or Section&nbsp;20 of the 1934 Act, against any and all loss, liability, claim, damage
and expense described in the indemnity contained in subsection (a)&nbsp;of this Section, as incurred,
but only with respect to untrue statements or omissions, or alleged untrue statements or omissions,
made in the Registration Statement (or any amendment thereto), including the Rule&nbsp;430A Information
or any preliminary prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package
or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with
written information furnished to the Company by such Underwriter through the Representatives
expressly for use therein. The Company and the Operating Partnership hereby acknowledge that the
only information that the Underwriters have furnished to the Company expressly for use in the
Registration Statement (or any amendment thereto), including the Rule&nbsp;430A Information, or any
preliminary prospectus, any Issuer Free Writing Prospectus, the General Disclosure Package or the
Prospectus (or any amendment or supplement thereto) are the statements set forth in the fifth
paragraph, the second sentence of the seventeenth paragraph, the eighteenth paragraph, the
nineteenth paragraph and the twentieth paragraph under the caption &#147;Underwriting&#148; in the
Prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;<I>Actions against Parties; Notification</I>. Each indemnified party shall give notice as
promptly as reasonably practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an indemnifying party
shall not relieve such indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement. In the case of parties
indemnified pursuant to Section 6(a) above, counsel to the indemnified parties shall be selected by
the Representatives, and, in the case of parties indemnified pursuant to Section 6(b) above,
counsel to the indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; <U>provided</U>,
<U>however</U>, that counsel to the indemnifying party shall not (except with the consent of the
indemnified party) also be counsel to the indemnified party. In no event shall the indemnifying
parties be liable for fees and expenses of more than one counsel (in addition to any local counsel)
separate from their own counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior written consent of
the indemnified parties, settle or compromise or consent to the entry of any judgment with respect
to any litigation, or any investigation or proceeding by any governmental agency or body, commenced
or threatened, or any claim whatsoever in respect of which indemnification or contribution could be
sought under this Section&nbsp;6 or Section&nbsp;7 hereof (whether or not the indemnified parties are actual
or potential parties thereto), unless such settlement, compromise or consent (i)&nbsp;includes an
unconditional release of each indemnified party from all liability arising out of such litigation,
investigation, proceeding or claim and (ii)&nbsp;does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of any indemnified party.
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;<I>Settlement without Consent if Failure to Reimburse</I>. If at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party for fees and expenses
of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature
contemplated by Section&nbsp;6(a)(ii) effected without its written consent if (i)&nbsp;such settlement is
entered into more than 45&nbsp;days after receipt by such indemnifying party of the aforesaid request,
(ii)&nbsp;such indemnifying party shall have received notice of the terms of such settlement at least 30
days prior to such settlement being entered into and (iii)&nbsp;such indemnifying party shall not have
reimbursed such indemnified party in accordance with such request prior to the date of such
settlement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e)&nbsp;<I>Indemnification for Reserved Securities</I>. In connection with the offer and sale of the
Reserved Securities, the Company and the Operating Partnership agree to indemnify and hold harmless
the Underwriters, their Affiliates and selling agents and each person, if any, who controls any
Underwriter within the meaning of either Section&nbsp;15 of the 1933 Act or Section&nbsp;20 of the 1934 Act,
from and against any and all loss, liability, claim, damage and expense (including, without
limitation, any legal or other expenses reasonably incurred in connection with defending,
investigating or settling any such action or claim), as incurred, (i)&nbsp;arising out of the violation
of any applicable laws or regulations of foreign jurisdictions where Reserved Securities have been
offered; (ii)&nbsp;arising out of any untrue statement or alleged untrue statement of a material fact
contained in any prospectus wrapper or other material prepared by or with the consent of the
Company for distribution to Invitees in connection with the offering of the Reserved Securities or
caused by any omission or alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading; (iii)&nbsp;caused by the failure of
any Invitee to pay for and accept delivery of Reserved Securities which have been orally confirmed
for purchase by any Invitee by 9:00 a.m. Eastern Time on the first business day after the date of
the Agreement; or (iv)&nbsp;related to, or arising out of or in connection with, the offering of the
Reserved Securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 7. <U>Contribution</U>. If the indemnification provided for in Section&nbsp;6 hereof is
for any reason unavailable to or insufficient to hold harmless an indemnified party in respect of
any losses, liabilities, claims, damages or expenses referred to therein, then each indemnifying
party shall contribute to the aggregate amount of such losses, liabilities, claims, damages and
expenses incurred by such indemnified party, as incurred, (i)&nbsp;in such proportion as is appropriate
to reflect the relative benefits received by the Company and the Operating Partnership on the one
hand and the Underwriters on the other hand from the offering of the Securities pursuant to this
Agreement or (ii)&nbsp;if the allocation provided by clause (i)&nbsp;is not permitted by applicable law, in
such proportion as is appropriate to reflect not only the relative benefits referred to in clause
(i)&nbsp;above but also the relative fault of the Company and the Operating Partnership on the one hand
and of the Underwriters on the other hand in connection with the statements or omissions which
resulted in such losses, liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The relative benefits received by the Company and the Operating Partnership on the one hand
and the Underwriters on the other hand in connection with the offering of the Securities pursuant
to this Agreement shall be deemed to be in the same respective proportions as the total net
proceeds from the offering of the Securities pursuant to this Agreement (before deducting expenses)
received by the Company and the Operating Partnership and the total underwriting discount received
by the Underwriters, in each case as set forth on the cover of the Prospectus bear to the aggregate
initial public offering price of the Securities as set forth on the cover of the Prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The relative fault of the Company and the Operating Partnership on the one hand and the
Underwriters on the other hand shall be determined by reference to, among other things, whether any
such untrue or alleged untrue statement of a material fact or omission or alleged omission to state
a material fact relates to information supplied by the Company, the Operating Partnership or by the
Underwriters
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">and the parties&#146; relative intent, knowledge, access to information and opportunity to correct
or prevent such statement or omission.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Company, the Operating Partnership and the Underwriters agree that it would not be just
and equitable if contribution pursuant to this Section&nbsp;7 were determined by pro rata allocation
(even if the Underwriters were treated as one entity for such purpose) or by any other method of
allocation which does not take account of the equitable considerations referred to above in this
Section&nbsp;7. The aggregate amount of losses, liabilities, claims, damages and expenses incurred by
an indemnified party and referred to above in this Section&nbsp;7 shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding the provisions of this Section&nbsp;7, no Underwriter shall be required to
contribute any amount in excess of the amount by which the underwriting commissions received by
such Underwriter in connection with the Securities underwritten by it and distributed to the public
exceeds the amount of any damages which such Underwriter has otherwise been required to pay by
reason of any such untrue or alleged untrue statement or omission or alleged omission.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the
1933 Act) shall be entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of this Section&nbsp;7, each person, if any, who controls an Underwriter within the
meaning of Section&nbsp;15 of the 1933 Act or Section&nbsp;20 of the 1934 Act and each Underwriter&#146;s
Affiliates and selling agents shall have the same rights to contribution as such Underwriter, and
each trustee of the Company, each officer of the Company who signed the Registration Statement, and
each person, if any, who controls the Company or the Operating Partnership within the meaning of
Section&nbsp;15 of the 1933 Act or Section&nbsp;20 of the 1934 Act shall have the same rights to contribution
as the Company and the Operating Partnership. The Underwriters&#146; respective obligations to
contribute pursuant to this Section&nbsp;7 are several in proportion to the number of Initial Securities
set forth opposite their respective names in Schedule&nbsp;A hereto and not joint.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 8. <U>Representations, Warranties and Agreements to Survive</U>. All
representations, warranties and agreements contained in this Agreement or in certificates of
officers of the Company or the Operating Partnership submitted pursuant hereto, shall remain
operative and in full force and effect regardless of (i)&nbsp;any investigation made by or on behalf of
any Underwriter or its Affiliates or selling agents, any person controlling any Underwriter, its
officers or directors, any person controlling the Company or the Operating Partnership and (ii)
delivery of and payment for the Securities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 9. <U>Termination of Agreement</U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;<I>Termination; General</I>. The Representatives may terminate this Agreement, by notice to the
Company, at any time at or prior to the Closing Time (i)&nbsp;if in the sole judgment of the
Representatives there has been, since the time of execution of this Agreement or since the
respective dates as of which information is given in the Registration Statement, the General
Disclosure Package or the Prospectus, any material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs, business prospects, management, assets or
properties of the Company and the Operating Partnership considered as one enterprise, whether or
not arising in the ordinary course of business, or (ii)&nbsp;if there has occurred any material adverse
change in the financial markets in the United States or the international financial markets, any
outbreak of hostilities or escalation thereof or other calamity or crisis or any
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">change or development involving a prospective change in national or international political,
financial or economic conditions, in each case the effect of which is such as to make it, in the
sole judgment of the Representatives, impracticable or inadvisable to market the Securities or to
enforce contracts for the sale of the Securities, or (iii)&nbsp;if trading in any securities of the
Company has been suspended or materially limited by the Commission or the New York Stock Exchange,
or if trading generally on the New York Stock Exchange or in the Nasdaq Global Select Market has
been suspended or materially limited, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices have been required, by any of said exchanges or by such system or by
order of the Commission, FINRA or any other governmental authority, or (iv)&nbsp;a material disruption
has occurred in commercial banking or securities settlement or clearance services in the United
States, or (v)&nbsp;if a banking moratorium has been declared by either Federal or New York authorities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;<I>Liabilities</I>. If this Agreement is terminated pursuant to this Section, such termination
shall be without liability of any party to any other party except as provided in Section&nbsp;4 hereof,
and provided further that Sections&nbsp;1, 6, 7 and 8 shall survive such termination and remain in full
force and effect.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 10. <U>Default by One or More of the Underwriters</U>. If one or more of the
Underwriters shall fail at the Closing Time or a Date of Delivery to purchase the Securities which
it or they are obligated to purchase under this Agreement (the &#147;Defaulted Securities&#148;), the
Representatives shall have the right, within 24 hours thereafter, to make arrangements for one or
more of the non-defaulting Underwriters, or any other underwriters, to purchase all, but not less
than all, of the Defaulted Securities in such amounts as may be agreed upon and upon the terms
herein set forth; if, however, the Representatives shall not have completed such arrangements
within such 24-hour period, then:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) if the number of Defaulted Securities does not exceed 10% of the number of
Securities to be purchased on such date, each of the non-defaulting Underwriters shall be
obligated, severally and not jointly, to purchase the full amount thereof in the proportions
that their respective underwriting obligations hereunder bear to the underwriting
obligations of all non-defaulting Underwriters, or
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 2%">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) if the number of Defaulted Securities exceeds 10% of the number of Securities to
be purchased on such date, this Agreement (or, with respect to any Date of Delivery which
occurs after the Closing Time, the obligation of the Underwriters to purchase and of the
Company to sell the Option Securities to be purchased and sold on such Date of Delivery)
shall terminate without liability on the part of any non-defaulting Underwriter or the
Company or the Operating Partnership.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;No action taken pursuant to this Section shall relieve any defaulting Underwriter from
liability in respect of its default.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In the event of any such default which does not result in a termination of this Agreement or,
in the case of a Date of Delivery which is after the Closing Time, which does not result in a
termination of the obligation of the Underwriters to purchase and the Company to sell the relevant
Option Securities, as the case may be, either (i)&nbsp;the Representatives or (ii)&nbsp;the Company shall
have the right to postpone the Closing Time or the relevant Date of Delivery, as the case may be,
for a period not exceeding seven days in order to effect any required changes in the Registration
Statement or Prospectus or in any other documents or arrangements. As used herein, the term
&#147;Underwriter&#148; includes any person substituted for an Underwriter under this Section&nbsp;10.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->24<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 11. <U>Default by the Company</U>. If the Company shall fail at the Closing Time or
at the Date of Delivery to sell the number of Securities that it is obligated to sell hereunder,
then this Agreement shall terminate without any liability on the part of any nondefaulting party;
provided, however, that the provisions of Sections&nbsp;1, 4, 6, 7 and 8 shall remain in full force and
effect. No action taken pursuant to this Section shall relieve the Company from liability, if any,
in respect of such default.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 12. <U>Tax Disclosure</U>. Notwithstanding any other provision of this Agreement,
from the commencement of discussions with respect to the transactions contemplated hereby, the
Company and the Operating Partnership (and each employee, representative or other agent of the
Company) may disclose to any and all persons, without limitation of any kind, the tax treatment and
tax structure (as such terms are used in Sections&nbsp;6011, 6111 and 6112 of the Code and the Treasury
Regulations promulgated thereunder) of the transactions contemplated by this Agreement and all
materials of any kind (including opinions or other tax analyses) that are provided relating to such
tax treatment and tax structure.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 13. <U>Notices</U>. All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if mailed or transmitted by any standard form
of telecommunication. Notices to the Underwriters shall be directed to Merrill Lynch, Pierce,
Fenner &#038; Smith Incorporated at One Bryant Park, New York, New York 10036, Facsimile: (646)
855-3073, attention of Syndicate Department, with a copy to Merrill Lynch, Pierce, Fenner &#038; Smith
Incorporated, One Bryant Park, New York, New York 10036, Facsimile: (212)&nbsp;230-8730, attention of
ECM Legal, to Raymond James at 880 Carillon Parkway, St. Petersburg. Florida 33716, attention of
General Counsel, Equity Capital Markets and to Wells Fargo at 375 Park Avenue, New York, New York
10152, attention of Equity Syndicate Department; notices to the Company shall be directed to it at
<B>&#091;</B><B>&#149;</B><B>&#093;</B>, attention of <B>&#091;</B><B>&#149;</B><B>&#093;</B>; and notices to the Operating Partnership shall be directed to it
at <B>&#091;</B><B>&#149;</B><B>&#093;</B>, attention of <B>&#091;</B><B>&#149;</B><B>&#093;</B>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 14. <U>No Advisory or Fiduciary Relationship</U>. Each of the Company and the
Operating Partnership acknowledge and agree that (a)&nbsp;the purchase and sale of the Securities
pursuant to this Agreement, including the determination of the public offering price of the
Securities and any related discounts and commissions, is an arm&#146;s-length commercial transaction
between the Company and the Operating Partnership, on the one hand, and the several Underwriters,
on the other hand, (b)&nbsp;in connection with the offering contemplated hereby and the process leading
to such transaction each Underwriter is and has been acting solely as a principal and is not the
agent or fiduciary of the Company or the Operating Partnership, or its stockholders, creditors,
employees or any other party, (c)&nbsp;no Underwriter has assumed or will assume an advisory or
fiduciary responsibility in favor of the Company or the Operating Partnership with respect to the
offering contemplated hereby or the process leading thereto (irrespective of whether such
Underwriter has advised or is currently advising the Company or the Operating Partnership on other
matters) and no Underwriter has any obligation to the Company or the Operating Partnership with
respect to the offering contemplated hereby except the obligations expressly set forth in this
Agreement, (d)&nbsp;the Underwriters and their respective affiliates may be engaged in a broad range of
transactions that involve interests that differ from those of the Company or the Operating
Partnership, and (e)&nbsp;the Underwriters have not provided any legal, accounting, regulatory or tax
advice with respect to the offering contemplated hereby and the Company and the Operating
Partnership have consulted their own legal, accounting, regulatory and tax advisors to the extent
they deemed appropriate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 15. <U>Integration</U>. This Agreement supersedes all prior agreements and
understandings (whether written or oral) between the Company, the Operating Partnership and the
Underwriters, or any of them, with respect to the subject matter hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 16. <U>Parties</U>. This Agreement shall each inure to the benefit of and be binding
upon the Underwriters, the Company, the Operating Partnership and their respective successors.
Nothing expressed or mentioned in this Agreement is intended or shall be construed to give any
person, firm or
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->25<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">corporation, other than the Underwriters, the Company, the Operating Partnership and their
respective successors and the controlling persons and officers and trustees referred to in Sections
6 and 7 and their heirs and legal representatives, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision herein contained. This Agreement and all
conditions and provisions hereof are intended to be for the sole and exclusive benefit of the
Underwriters, the Company, the Operating Partnership and their respective successors, and said
controlling persons and officers and trustees and their heirs and legal representatives, and for
the benefit of no other person, firm or corporation. No purchaser of Securities from any
Underwriter shall be deemed to be a successor by reason merely of such purchase.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 17. <U>Trial by Jury</U>. Each of the Company (on its behalf and, to the extent
permitted by applicable law, on behalf of its stockholders and affiliates) and the Operating
Partnership and each of the Underwriters hereby irrevocably waives, to the fullest extent permitted
by applicable law, any and all right to trial by jury in any legal proceeding arising out of or
relating to this Agreement or the transactions contemplated hereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 18. <U>GOVERNING LAW</U>. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 19. <U>TIME</U>. TIME SHALL BE OF THE ESSENCE OF THIS AGREEMENT. EXCEPT AS
OTHERWISE SET FORTH HEREIN, SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 20. <U>Counterparts</U>. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;SECTION 21. <U>Effect of Headings</U>. The Section headings herein are for convenience only
and shall not affect the construction hereof.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->26<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If the foregoing is in accordance with your understanding of our agreement, please sign and
return to the Company and the Operating Partnership a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement between the Underwriters,
the Company and the Operating Partnership in accordance with its terms.
</DIV>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="48%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">Very truly yours,
<BR>
<BR>
PEBBLEBROOK HOTEL TRUST<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">PEBBLEBROOK HOTEL, L.P.<BR>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;By Pebblebrook Hotel Trust, its general partner<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">CONFIRMED AND ACCEPTED,<BR>

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
as of the date first above written:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">MERRILL LYNCH, PIERCE, FENNER &#038; SMITH
INCORPORATED
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="60%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Authorized Signatory
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">RAYMOND JAMES &#038; ASSOCIATES, INC.</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Authorized Signatory
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">WELLS FARGO SECURITIES, LLC</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">By</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
Authorized Signatory
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">For themselves and as Representatives of the other Underwriters named in Schedule&nbsp;A hereto.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->27<!-- /Folio -->
</DIV>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-5.1
<SEQUENCE>3
<FILENAME>w75877a3exv5w1.htm
<DESCRIPTION>EX-5.1
<TEXT>
<HTML>
<HEAD>
<TITLE>exv5w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
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<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;5.1</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="31%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="21%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="21%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="21%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><IMG src="w75877a3w7587712.gif" alt="(VENABLE LLP LOGO)">
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">750 E. Pratt Street, Suite&nbsp;900<br>
Baltimore, Maryland 21202
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Telephone 410-244-7400<br>
Fascimile 410-244-7742
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">www.venable.com</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">December&nbsp;3, 2009
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pebblebrook Hotel Trust<BR>
10319 Westlake Drive, Suite&nbsp;112<BR>
Bethesda, MD 20817

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Re: &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Registration Statement on Form S-11 (Registration No.&nbsp;333-162412)</U>
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Ladies and Gentlemen:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have served as Maryland counsel to Pebblebrook Hotel Trust, a Maryland real estate
investment trust (the &#147;Company&#148;), in connection with certain matters of Maryland law relating to
the initial public offering by the Company of up to 20,125,000 (the &#147;Shares&#148;) common shares of
beneficial interest, $.01 par value per share, of the Company (including up to 2,625,000 Shares
which the underwriters have the option to purchase solely to cover over-allotments), covered by the
above-referenced Registration Statement, and all amendments thereto (the &#147;Registration Statement&#148;),
filed by the Company with the United States Securities and Exchange Commission (the &#147;Commission&#148;)
under the Securities Act of 1933, as amended (the &#147;1933 Act&#148;).
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with our representation of the Company, and as a basis for the opinion
hereinafter set forth, we have examined originals, or copies certified or otherwise identified to
our satisfaction, of the following documents (hereinafter collectively referred to as the
&#147;Documents&#148;):
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;The Registration Statement and the related form of prospectus included therein in the form
in which it was transmitted to the Commission under the 1933 Act;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;The Declaration of Trust of the Company, as amended (the &#147;Declaration of Trust&#148;), certified
by the State Department of Assessments and Taxation of Maryland (the &#147;SDAT&#148;);
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;The Bylaws of the Company, certified as of the date hereof by an officer of the Company;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;A certificate of the SDAT as to the good standing of the Company, dated as of a recent
date;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;Resolutions adopted by the Board of Trustees of the Company (the &#147;Board&#148;), or a duly
authorized committee thereof, relating to, among other matters, the sale, issuance and registration
of the Shares (the &#147;Resolutions&#148;), certified as of the date hereof by an officer of the Company;
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><IMG src="w75877a3w7587713.gif" alt="(VENABLE LLP LOGO)">

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pebblebrook Hotel Trust<BR>
December&nbsp;3, 2009<BR>
Page 2

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;A certificate executed by an officer of the Company, dated as of the date hereof; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;Such other documents and matters as we have deemed necessary or appropriate to express the
opinion set forth below, subject to the assumptions, limitations and qualifications stated herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In expressing the opinion set forth below, we have assumed the following:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;Each individual executing any of the Documents, whether on behalf of such individual or
another person, is legally competent to do so.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;Each individual executing any of the Documents on behalf of a party (other than the
Company) is duly authorized to do so.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;Each of the parties (other than the Company) executing any of the Documents has duly and
validly executed and delivered each of the Documents to which such party is a signatory, and such
party&#146;s obligations set forth therein are legal, valid and binding and are enforceable in
accordance with all stated terms.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;All Documents submitted to us as originals are authentic. The form and content of all
Documents submitted to us as unexecuted drafts do not differ in any respect relevant to this
opinion from the form and content of such Documents as executed and delivered. All Documents
submitted to us as certified or photostatic copies conform to the original documents. All
signatures on all Documents are genuine. All public records reviewed or relied upon by us or on
our behalf are true and complete. All representations, warranties, statements and information
contained in the Documents are true and complete. There has been no oral or written modification
of or amendment to any of the Documents, and there has been no waiver of any provision of any of
the Documents, by action or omission of the parties or otherwise.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;The Shares will not be issued or transferred in violation of the restrictions on transfer
and ownership contained in Article&nbsp;VII of the Declaration of Trust.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based upon the foregoing, and subject to the assumptions, limitations and qualifications
stated herein, it is our opinion that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;The Company is a real estate investment trust duly formed and existing under and by virtue
of the laws of the State of Maryland and is in good standing with the SDAT.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. The issuance of the Shares has been duly authorized and, when and if delivered against
payment therefor in accordance with the Registration Statement, the
</DIV>

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</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><IMG src="w75877a3w7587713.gif" alt="(VENABLE LLP LOGO)">

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pebblebrook Hotel Trust<BR>
December&nbsp;3, 2009<BR>
Page 3

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Resolutions and any other resolutions adopted by the Board or a duly authorized pricing committee
thereof relating thereto, the Shares will be validly issued, fully paid and nonassessable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing opinion is limited to the laws of the State of Maryland and we do not express
any opinion herein concerning any other law. We express no opinion as to the applicability or
effect of federal or state securities laws, including the securities laws of the State of Maryland,
or as to federal or state laws regarding fraudulent transfers. To the extent that any matter as to
which our opinion is expressed herein would be governed by the laws of any jurisdiction other than
the State of Maryland, we do not express any opinion on such matter. The opinion expressed herein
is subject to the effect of any judicial decision which may permit the introduction of parol
evidence to modify the terms or the interpretation of agreements.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The opinion expressed herein is limited to the matters specifically set forth herein and no
other opinion shall be inferred beyond the matters expressly stated. We assume no obligation to
supplement this opinion if any applicable law changes after the date hereof or if we become aware
of any fact that might change the opinion expressed herein after the date hereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This opinion is being furnished to you for submission to the Commission as an exhibit to the
Registration Statement. We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the use of the name of our firm therein. In giving this consent, we
do not admit that we are within the category of persons whose consent is required by Section&nbsp;7 of
the 1933 Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">Very truly yours,

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">/s/ Venable LLP

</DIV>




<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-8.1
<SEQUENCE>4
<FILENAME>w75877a3exv8w1.htm
<DESCRIPTION>EX-8.1
<TEXT>
<HTML>
<HEAD>
<TITLE>exv8w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;8.1</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="70%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" valign="top">HUNTON &#038; WILLIAMS LLP</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" valign="top">RIVERFRONT PLAZA, EAST TOWER</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" valign="top">951 EAST BYRD STREET</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="left" valign="top">RICHMOND, VIRGINIA 23219-4074</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">TEL &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;804 <B>&#149;</B> 788 <B>&#149;</B> 8200</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">FAX &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;804 <B>&#149;</B> 788 <B>&#149;</B> 8218</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">December&nbsp;3, 2009
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pebblebrook Hotel Trust<BR>
10319 Westlake Drive, Suite&nbsp;112<BR>
Bethesda, Maryland 20817

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>Pebblebrook Hotel Trust</U><BR>
<U>Qualification as</U><BR>
<U>Real Estate Investment Trust</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Ladies and Gentlemen:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have acted as counsel to Pebblebrook Hotel Trust, a Maryland real estate investment trust
(the &#147;Company&#148;), in connection with the preparation of a Form S-11 registration statement (File No.
333-162412) filed with the Securities and Exchange Commission on October&nbsp;9, 2009, as amended
through the date hereof (the &#147;Registration Statement&#148;), with respect to the offer and sale (the
&#147;Offering&#148;) of up to 20,125,000 common shares of beneficial interest, par value $0.01 per share, of
the Company. You have requested our opinion regarding certain U.S. federal income tax matters in
connection with the Offering.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">In giving this opinion letter, we have examined the following:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Registration Statement and the prospectus (the &#147;Prospectus&#148;) filed as part of the
Registration Statement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Company&#146;s Declaration of Trust filed on October&nbsp;2, 2009 with the Department of
Assessments and Taxation of the State of Maryland, and the Articles of Amendment and
Restatement (the &#147;Amended Articles&#148;), in the form attached as an exhibit to the Registration
Statement;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Company&#146;s Bylaws (the &#147;Bylaws&#148;), in the form attached as an exhibit to the Registration
Statement;</TD>
</TR>

</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pebblebrook Hotel Trust<BR>
December&nbsp;3, 2009<BR>
Page 2

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Agreement of Limited Partnership of Pebblebrook Hotel, L.P., a Delaware limited
partnership (the &#147;Operating Partnership Agreement&#148;), in the form attached as an exhibit to the
Registration Statement; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="1%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>such other documents as we have deemed necessary or appropriate for purposes of this opinion.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the opinions rendered below, we have assumed, with your consent, that:
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">1. each of the documents referred to above is authentic, if an original, or is accurate, if a copy;
and has not been amended;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">2. the Amended Articles, the Bylaws and the Operating Partnership Agreement will be executed,
delivered, adopted, and filed, as applicable, in a form substantially similar to the forms filed as
exhibits to the Registration Statement;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">3. during its taxable year ending December&nbsp;31, 2009, and future taxable years, the Company will
operate in a manner that will make the factual representations contained in a certificate, dated
the date hereof and executed by a duly appointed officer of the Company (the &#147;Officer&#146;s
Certificate&#148;), true for such years;
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">4. the Company will not make any amendments to its organizational documents after the date of this
opinion that would affect its qualification as a real estate investment trust (a &#147;REIT&#148;) for any
taxable year; and
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">5. no action will be taken by the Company after the date hereof that would have the effect of
altering the facts upon which the opinions set forth below are based.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the opinions rendered below, we also have relied upon the correctness of
the factual representations contained in the Officer&#146;s Certificate. No facts have come to our
attention that would cause us to question the accuracy and completeness of such factual
representations. Furthermore, where such factual representations involve terms defined in the
Internal Revenue Code of 1986, as amended (the &#147;Code&#148;), the Treasury regulations thereunder (the
&#147;Regulations&#148;), published rulings of the Internal Revenue Service (the &#147;Service&#148;), or other
relevant authority, we have reviewed with the individuals making such representations the relevant
provisions of the Code, the applicable Regulations and published administrative interpretations
thereof.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pebblebrook Hotel Trust<BR>
December&nbsp;3, 2009<BR>
Page 3

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Based solely on the documents and assumptions set forth above, the representations set forth
in the Officer&#146;s Certificate, the discussion in the Prospectus under the caption &#147;Material Federal
Income Tax Considerations&#148; (which is incorporated herein by reference), we are of the opinion that:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%">(a)&nbsp;commencing with its short taxable year beginning on the business day prior to the
closing of the Offering and ending on December&nbsp;31, 2009, the Company will be organized
in conformity with the requirements for qualification and taxation as a REIT pursuant
to sections 856 through 860 of the Code, and the Company&#146;s proposed method of
operation will enable it to satisfy the requirements for qualification and taxation as
a REIT under the Code for its taxable year ending December&nbsp;31, 2009 and thereafter;
and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 1%">(b)&nbsp;the descriptions of the law and the legal conclusions in the Prospectus under the
caption &#147;Material Federal Income Tax Considerations&#148; are correct in all material
respects.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will not review on a continuing basis the Company&#146;s compliance with the documents or
assumptions set forth above, or the representations set forth in the Officer&#146;s Certificate.
Accordingly, no assurance can be given that the actual results of the Company&#146;s operations for any
given taxable year will satisfy the requirements for qualification and taxation as a REIT.
Although we have made such inquiries and performed such investigations as we have deemed necessary
to fulfill our professional responsibilities as counsel, we have not undertaken an independent
investigation of all of the facts referred to in this letter or the Officer&#146;s Certificate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing opinions are based on current provisions of the Code, the Regulations, published
administrative interpretations thereof, and published court decisions. The Service has not issued
Regulations or administrative interpretations with respect to various provisions of the Code
relating to REIT qualification. No assurance can be given that the law will not change in a way
that will prevent the Company from qualifying as a REIT.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing opinions are limited to the U.S. federal income tax matters addressed herein,
and no other opinions are rendered with respect to other U.S. federal tax matters or to any issues
arising under the tax laws of any other country, or any state or locality. We undertake no
obligation to update the opinions expressed herein after the date of this letter. This opinion
letter speaks only as of the date hereof. Except as provided in the next paragraph, this opinion
letter may not be distributed, quoted in whole or in part or otherwise reproduced in any document,
or filed with any governmental agency without our express written consent.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We hereby consent to the filing of this opinion as an exhibit to the Registration Statement.
We also consent to the references to Hunton &#038; Williams LLP under the captions
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pebblebrook Hotel Trust<BR>
December&nbsp;3, 2009<BR>
Page 4

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&#147;Material Federal Income Tax Considerations&#148; and &#147;Legal Matters&#148; in the Prospectus. In giving this
consent, we do not admit that we are in the category of persons whose consent is required by
Section&nbsp;7 of the Securities Act of 1933, as amended, or the rules and regulations promulgated
thereunder by the Securities and Exchange Commission.
</DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="48%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Very truly yours,</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Hunton &#038; Williams LLP</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">07796/10510&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>5
<FILENAME>w75877a3exv10w7.htm
<DESCRIPTION>EX-10.7
<TEXT>
<HTML>
<HEAD>
<TITLE>exv10w7</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;10.7</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>LONG TERM INCENTIVE PLAN<BR>
UNIT VESTING AGREEMENT</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Under the Pebblebrook Hotel Trust<BR>
2009 Equity Incentive Plan<BR>
(Officers and Employees)</B>

</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="30%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="25%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Name of Grantee:</B></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>No. of LTIP Units:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV></B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Grant Date:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV></B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Final Acceptance Date:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV></B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV></B>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pursuant to the Pebblebrook Hotel Trust 2009 Equity Incentive Plan (the &#147;Plan&#148;) as amended
through the date hereof and the Agreement of Limited Partnership, dated <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2009 (the
&#147;Partnership Agreement&#148;), of Pebblebrook Hotel, L.P., a Delaware limited partnership (the
&#147;Partnership&#148;), Pebblebrook Hotel Trust, a Maryland real estate investment trust and the general
partner of the Partnership (the &#147;Company&#148;), and for the provision of services to or for the benefit
of the Partnership in a partner capacity or in anticipation of being a partner, hereby grants to
the Grantee named above an Other Equity-Based Award (as defined in the Plan) (an &#147;Award&#148;) in the
form of, and by causing the Partnership to issue to the Grantee named above, a number of LTIP Units
(as defined in the Partnership Agreement) specified above having the rights, voting powers,
restrictions, limitations as to distributions, qualifications and terms and conditions of
redemption and conversion set forth herein and in the Partnership Agreement. Upon acceptance of
this Long Term Incentive Plan Unit Vesting Agreement (this &#147;Agreement&#148;), the Grantee shall receive,
effective as of the Closing Date (as defined below), the number of LTIP Units specified above,
subject to the restrictions and conditions set forth herein and in the Partnership Agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>1.&nbsp;</B><U><B>Acceptance of Agreement</B></U>. The Grantee shall have no rights with respect to this
Agreement unless he or she shall have accepted this Agreement prior to the close of business on the
Final Acceptance Date specified above by (i)&nbsp;signing and delivering to the Partnership a copy of
this Agreement and (ii)&nbsp;unless the Grantee is already a Limited Partner (as defined in the
Partnership Agreement), signing, as a Limited Partner, and delivering to the Partnership a
counterpart signature page to the Partnership Agreement (attached hereto as <U>Annex A</U>). Upon
acceptance of this Agreement by the Grantee, the Partnership Agreement shall be amended to reflect
the issuance to the Grantee of the LTIP Units so accepted, effective as of the Closing Date.
Thereupon, the Grantee shall have all the rights of a Limited Partner of the Partnership with
respect to the number of LTIP Units specified above, as set forth in the Partnership Agreement,
subject, however, to the restrictions and conditions specified in <U>Section&nbsp;2</U> below.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>2.&nbsp;</B><U><B>Restrictions and Conditions</B></U>.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;The records of the Partnership evidencing the LTIP Units granted herein shall bear an
appropriate legend, as determined by the Partnership in its sole discretion, to the effect that
such LTIP Units are subject to restrictions as set forth herein and in the Partnership Agreement.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;LTIP
Units granted herein may not be sold, transferred, pledged,
exchanged, hypothecated or otherwise
encumbered or disposed of by the Grantee prior to vesting.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;Subject to the provisions of Section&nbsp;4, any LTIP Units subject to this Award that have not
become vested on or before the date that the Grantee&#146;s employment with the Company and its
Affiliates terminates shall be forfeited as of the date that such employment terminates.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>3.&nbsp;</B><U><B>Vesting of LTIP Units</B></U>. The restrictions and conditions in <U>Section&nbsp;2</U> of
this Agreement shall lapse with respect to the number of LTIP Units specified below on the Vesting
Dates specified below, so long as the Grantee remains an employee of the Company or an Affiliate
(as defined in the Plan) from the Closing Date until such Vesting Date or Dates.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>LTIP Units Vested</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Vesting Dates</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 20&#95;&#95;&#95;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 20&#95;&#95;&#95;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 20&#95;&#95;&#95;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 20&#95;&#95;&#95;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 20&#95;&#95;&#95;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Subsequent to such Vesting Date or Dates, the LTIP Units on which all restrictions and
conditions have lapsed shall no longer be deemed restricted.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>4.&nbsp;</B><U><B>Acceleration of Vesting in Special Circumstances</B></U>. All restrictions on all LTIP
Units subject to this Award shall be deemed waived by the Committee (as defined in the Plan) and
all LTIP Units granted hereby shall automatically become fully vested on the date specified below
if the Grantee remains in the continuous employ of the Company or an Affiliate on such date:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;the date that the Grantee&#146;s employment with the Company and its Affiliates ends on account
of the Grantee&#146;s termination of employment by the Company without Cause (as defined below);
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;the date that the Grantee&#146;s employment ends on account of the Grantee&#146;s death or total and
permanent disability (as defined in Section&nbsp;22(e)(3) of the Internal Revenue Code of 1986, as
amended (the &#147;Code&#148;)); or
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;on the date of a Change in Control (as defined in the Plan).
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For purposes of the Award, the term &#147;Cause&#148; means that the Board concludes, in good faith and
after reasonable investigation, that (i)&nbsp;the Grantee has been charged by the United States or a
State or political subdivision thereof with conduct which is a felony under the laws of the United
States or any State or political subdivision thereof; (ii)&nbsp;the Grantee engaged in conduct relating
to the Company constituting material breach of fiduciary duty, willful misconduct (including acts
of employment discrimination or sexual harassment) or fraud; (iii)&nbsp;the Grantee breached his
obligations or covenants under Section&nbsp;4 of the Grantee&#146;s Change in Control Severance Agreement in
any material respect; or (iv)&nbsp;the Grantee materially failed to follow a proper directive of the
Board within the scope of the Grantee&#146;s duties (which shall be capable of being performed by the
Grantee with reasonable effort) after written notice from the Board specifying the performance
required and the Grantee&#146;s failure to perform within thirty days after such notice. No act or
failure to act on the Grantee&#146;s part shall be deemed &#147;willful&#148; unless done, or omitted to be done,
by the Grantee not in good faith or if the result thereof would be unethical or illegal.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>5.&nbsp;</B><U><B>Merger-Related Action</B></U>. In contemplation of and subject to the consummation of a
consolidation or merger or sale of all or substantially all of the assets of the Company in which
outstanding common shares are exchanged for securities, cash, or other property of an unrelated
corporation or business entity or in the event of a liquidation of the Company (in each case, a
&#147;Transaction&#148;), the Board of Trustees of the Company, or the board of trustees or directors of any
corporation assuming the obligations of the Company (the &#147;Acquiror&#148;), may, in its discretion, take
any one or more of the following actions, as to the outstanding LTIP Units subject to this Award:
(i)&nbsp;provide that such LTIP Units shall be assumed or equivalent awards shall be substituted, by the
acquiring or succeeding entity (or an affiliate thereof), and/or (ii)&nbsp;upon prior written notice to
the LTIP Unitholders (as defined in the Partnership Agreement) of not less than 30&nbsp;days, provide
that such LTIP Units shall terminate immediately prior to the consummation of the Transaction. The
right to take such actions (each, a &#147;Merger-Related Action&#148;) shall be subject to the following
limitations and qualifications:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;if all LTIP Units awarded to the Grantee hereunder are eligible, as of the time of the
Merger-Related Action, for conversion into Common Units (as defined and in accordance with the
Partnership Agreement) and the Grantee is afforded the opportunity to effect such conversion and
receive, in consideration for the Common Units into which his LTIP Units shall have been converted,
the same kind and amount of consideration as other holders of Common Units in connection with the
Transaction, then Merger-Related Action of the kind specified in (i)&nbsp;or (ii)&nbsp;above shall be
permitted and available to the Company and the Acquiror;
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;if some or all of the LTIP Units awarded to the Grantee hereunder are not, as of the time
of the Merger-Related Action, so eligible for conversion into Common Units (in accordance with the
Partnership Agreement), and the acquiring or succeeding entity is itself, or has a subsidiary which
is organized as a partnership or limited liability company (consisting of a so-called &#147;UPREIT&#148; or
other structure substantially similar in purpose or effect to that of the Company and the
Partnership), then Merger-Related Action of the kind specified in clause (i)&nbsp;of this Section&nbsp;5
above must be taken by the Acquiror with respect to all LTIP Units subject to this
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Award which are not so convertible at the time, whereby all such LTIP Units covered by this Award
shall be assumed by the acquiring or succeeding entity, or equivalent awards shall be substituted
by the acquiring or succeeding entity, and the acquiring or succeeding entity shall preserve with
respect to the assumed LTIP Units or any securities to be substituted for such LTIP Units, as far
as reasonably possible under the circumstances, the distribution, special allocation, conversion
and other rights set forth in the Partnership Agreement for the benefit of the LTIP Unitholders;
and
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;if some or all of the LTIP Units awarded to the Grantee hereunder are not, as of the time
of the Merger-Related Action, so eligible for conversion into Common Units (in accordance with the
Partnership Agreement), and after exercise of reasonable commercial efforts the Company or the
Acquiror is unable to treat the LTIP Units in accordance with <U>Section&nbsp;5(b)</U>, then
Merger-Related Action of the kind specified in clause (ii)&nbsp;of this Section&nbsp;5 above must be taken by
the Company or the Acquiror, in which case such action shall be subject to a provision that the
settlement of the terminated award of LTIP Units which are not convertible into Common Units
requires a payment of the same kind and amount of consideration payable in connection with the
Transaction to a holder of the number of Common Units into which the LTIP Units to be terminated
could be converted or, if greater, the consideration payable to holders of the number of common
shares into which such Common Units could be exchanged (including the right to make elections as to
the type of consideration) if the Transaction were of a nature that permitted a revaluation of the
Grantee&#146;s capital account balance under the terms of the Partnership Agreement, as determined by
the Committee in good faith in accordance with the Plan.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>6.&nbsp;</B><U><B>Distributions</B></U>. Distributions on the LTIP Units shall be paid currently to the
Grantee in accordance with the terms of the Partnership Agreement. The right to distributions set
forth in this <U>Section&nbsp;6</U> shall be deemed a Dividend Equivalent Right for purposes of the
Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>7.&nbsp;</B><U><B>Incorporation of Plan</B></U>. Notwithstanding anything herein to the contrary, this
Agreement shall be subject to and governed by all the terms and conditions of the Plan.
Capitalized terms used in this Agreement shall have the meaning specified in the Plan, unless a
different meaning is specified herein.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>8.&nbsp;</B><U><B>Covenants</B></U>. The Grantee hereby covenants as follows:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a)&nbsp;So long as the Grantee holds any LTIP Units, the Grantee shall disclose to the Partnership
in writing such information as may be reasonably requested with respect to ownership of LTIP Units
as the Partnership may deem reasonably necessary to ascertain and to establish compliance with
provisions of the Code applicable to the Partnership or to comply with requirements of any other
appropriate taxing authority.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b)&nbsp;The Grantee hereby agrees to make an election under Section 83(b) of the Code with respect
to the LTIP Units awarded hereunder, and has delivered with this Agreement a completed, executed
copy of the election form attached hereto as <U>Annex B</U>. The Grantee agrees to file the
election (or to permit the Partnership to file such election on the Grantee&#146;s behalf) within thirty
(30)&nbsp;days after the Closing Date with the IRS Service Center at which such Grantee
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">files his personal income tax returns, and to file a copy of such election with the Grantee&#146;s U.S.
federal income tax return for the taxable year in which the LTIP Units are awarded to the Grantee.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c)&nbsp;The Grantee hereby agrees that it does not have the intention to dispose of the LTIP Units
subject to this Award within two years of receipt of such LTIP Units. The Partnership and the
Grantee hereby agree to treat the Grantee as the owner of the LTIP Units from the Grant Date. The
Grantee hereby agrees to take into account the distributive share of Partnership income, gain,
loss, deduction, and credit associated with the LTIP Units in computing the Grantee&#146;s income tax
liability for the entire period during which the Grantee has the LTIP Units.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d)&nbsp;The Grantee hereby recognizes that the IRS has proposed regulations under Sections&nbsp;83 and
704 of the Code that may affect the proper treatment of the LTIP Units for federal tax purposes.
In the event that those proposed regulations are finalized, the Grantee hereby agrees to cooperate
with the Partnership in amending this Agreement and the Partnership Agreement, and to take such
other action as may be required, to conform to such regulations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>9.&nbsp;</B><U><B>Transferability</B></U>. This Agreement is personal to the Grantee, is non-assignable and
is not transferable in any manner, by operation of law or otherwise, other than by will or the laws
of descent and distribution, without the prior written consent of the Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>10.&nbsp;</B><U><B>Amendment</B></U>. The Grantee acknowledges that the Plan may be amended or terminated in
accordance with <U>Article&nbsp;XV</U> thereof and that this Agreement may be amended or canceled by
the Committee, on behalf of the Partnership, for the purpose of satisfying changes in law or for
any other lawful purpose, provided that no such action shall adversely affect the Grantee&#146;s rights
under this Agreement without the Grantee&#146;s written consent. The provisions of <U>Section&nbsp;5</U> of
this Agreement applicable to the termination of the LTIP Units covered by this Award in connection
with a Transaction (as defined in <U>Section&nbsp;5</U> of this Agreement) shall apply, <I>mutatis mutandi</I>
to amendments, discontinuance or cancellation pursuant to this <U>Section&nbsp;10</U> or the Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>11.&nbsp;</B><U><B>No Obligation to Continue Employment</B></U>. Neither the Company nor any affiliate of
the Company is obligated by or as a result of the Plan or this Agreement to continue the Grantee in
employment and neither the Plan nor this Agreement shall interfere in any way with the right of the
Company or any affiliate of the Company to terminate the employment of the Grantee at any time.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>12.&nbsp;</B><U><B>Notices</B></U><B>. </B>Notices hereunder shall be mailed or delivered to the Partnership at its
principal place of business and shall be mailed or delivered to the Grantee at the address on file
with the Partnership or, in either case, at such other address as one party may subsequently
furnish to the other party in writing.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>13.&nbsp;</B><U><B>Governing Law</B></U><B>. </B>This Agreement shall be governed by, and construed in accordance
with, the laws of the State of Delaware, applied without regard to conflict of law principles. The
parties agree that any action or proceeding arising directly, indirectly or
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt">otherwise in connection with, out of , related to or from this Agreement, any breach hereof or any
action covered hereby, shall be resolved within the State of Delaware and the parties hereto
consent and submit to the jurisdiction of the federal and state courts located within the District
of Delaware. The parties hereto further agree that any such action or proceeding brought by either
party to enforce any right, assert any claim, obtain any relief whatsoever in connection with this
Agreement shall be brought by such party exclusively in federal or state courts located within the
District of Delaware.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>14.&nbsp;</B><U><B>Closing Date</B></U><B>. </B>As used herein, &#147;Closing Date&#148; shall mean the date of closing of
the initial public offering of common shares of beneficial interest of Pebblebrook Hotel Trust.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">&#091;Remainder of page left blank intentionally&#093;
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

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<DIV style="font-family: 'Times New Roman',Times,serif">




<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="58%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>PEBBLEBROOK HOTEL TRUST</B><BR>
&nbsp;&nbsp;&nbsp;&nbsp;a Maryland real estate investment trust<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">Date:&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>

<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>

<TABLE width="100%" border="0" cellspacing="0" cellpadding="0" style="font-size: 10pt">
<TR>
    <TD width="58%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="35%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left"><B>PEBBLEBROOK HOTEL, L.P.</B><BR>
&nbsp;&nbsp;&nbsp;&nbsp;a Delaware limited partnership<BR>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">By:&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: px solid #000000" align="left"> <B>PEBBLEBROOK HOTEL TRUST,</B>
&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;&nbsp;&nbsp;&nbsp;general partner&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="2" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
<TR>
    <TD valign="top" align="left">&nbsp;</TD>
    <TD colspan="3" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD valign="top">&nbsp;&nbsp;</TD>
    <TD colspan="2" style="border-bottom: 1px solid #000000" align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Name:&nbsp;&nbsp;</TD>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR><TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD valign="top">Title:&nbsp;&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left">Date:&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR>
    <TD colspan="5">&nbsp;</TD>
</TR>
</TABLE>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The foregoing agreement is hereby accepted and the terms and conditions thereof hereby agreed
to by the Grantee.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Grantee&#146;s Signature</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Grantee&#146;s name and address:</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>ANNEX A</B></U>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>FORM OF LIMITED PARTNER SIGNATURE PAGE</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Grantee desiring to become one of the within named Limited Partners of Pebblebrook Hotel,
L.P. (the &#147;Partnership&#148;), hereby becomes a party to the Agreement of Limited Partnership (the
&#147;Partnership Agreement&#148;) of Pebblebrook Hotel, L.P. by and among Pebblebrook Hotel Trust, as
general partner (the &#147;General Partner&#148;), and the Limited Partners, effective as of the Closing Date
(as defined in the Long Term Incentive Plan Unit Vesting Agreement, dated <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, among the
Grantee, the Partnership, and the General Partner). The Grantee agrees to be bound by the
Partnership Agreement. The Grantee also agrees that this signature page may be attached to, and
hereby authorizes the General Partner to attach this signature page to, any counterpart of the
Partnership Agreement.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="55%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Date: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature of Limited Partner</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Limited Partner&#146;s name and address:</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U><B>ANNEX B</B></U>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>ELECTION TO INCLUDE IN GROSS INCOME IN YEAR OF<BR>
TRANSFER OF PROPERTY PURSUANT TO SECTION 83(b)<BR>
OF THE INTERNAL REVENUE CODE</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned hereby makes an election pursuant to Section 83(b) of the Internal Revenue
Code with respect to the property described below and supplies the following information in
accordance with the regulations promulgated thereunder:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The name, address and taxpayer identification number of the undersigned are:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Name: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> (the &#147;Taxpayer&#148;)</TD>
</TR>

</TABLE>
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="7%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="45%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Address:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="15%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="26%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" nowrap>Social security number:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Description of property with respect to which the election is being made:</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The election is being made with respect to <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> LTIP Units in Pebblebrook
Hotel, L.P. (the &#147;Partnership&#148;).</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The date on which the LTIP Units were transferred is <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> &#95;&#95;&#95;, 20. The taxable
year to which this election relates is calendar year 20&#95;&#95;&#95;.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Nature of restrictions to which the LTIP Units are subject:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The LTIP Units are subject to a substantial risk of forfeiture
and are nontransferable on the date of transfer.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The Taxpayer&#146;s LTIP Units vest and become transferable based on
the Taxpayer&#146;s continued employment.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The fair market value at the time of transfer (determined without regard to any
restrictions other than restrictions which by their terms will never lapse) of the LTIP
Units with respect to which this election is being made was $0 per LTIP Unit.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The amount paid by the Taxpayer for the LTIP Units was $0 per LTIP Unit.<BR></TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>A copy of this statement has been furnished to the Partnership and to its general
partner, Pebblebrook Hotel Trust.</TD>
</TR>

</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="55%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Dated: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U> &#95;&#95;&#95;, 20&#95;&#95;&#95;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature of the Taxpayer</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Taxpayer&#146;s name and address:</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The undersigned hereby consents to the making, by the undersigned&#146;s spouse, of the foregoing
election pursuant to Section 83(b) of the Internal Revenue Code.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="55%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Dated: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature of the Taxpayer&#146;s Spouse</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Spouse&#146;s name and address:</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Schedule to Section&nbsp;83(b) Election-Vesting Provisions of LTIP Units</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The LTIP Units are subject to time-based vesting with 20% vesting on
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 20&#95;&#95;&#95;, 20% vesting
on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 20&#95;&#95;&#95;, 20% vesting on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 20&#95;&#95;&#95;, 20% vesting on <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 20&#95;&#95;&#95;, and 20% vesting on
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 20&#95;&#95;&#95;, subject to acceleration in the event of certain extraordinary transactions or
termination of the Taxpayer&#146;s employment for cause in certain circumstances. Unvested LTIP Units
are subject to forfeiture in the event of the termination of the Taxpayer&#146;s employment with
Pebblebrook Hotel Trust or its affiliates in certain circumstances.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>



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<DOCUMENT>
<TYPE>EX-10.8
<SEQUENCE>6
<FILENAME>w75877a3exv10w8.htm
<DESCRIPTION>EX-10.8
<TEXT>
<HTML>
<HEAD>
<TITLE>exv10w8</TITLE>
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<BODY bgcolor="#FFFFFF">
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<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><B>Exhibit&nbsp;10.8</B>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SUBSCRIPTION AGREEMENT</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pebblebrook Hotel Trust<BR>
10319 Westlake Drive, Suite&nbsp;112<BR>
Bethesda, Maryland 20817

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dear Sirs:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with a proposed purchase of common shares of beneficial interest, $0.01 par
value per share (the <I>&#147;Shares&#148;</I>), of Pebblebrook Hotel Trust, a Maryland real estate investment trust
(the <I>&#147;Company&#148;</I>), from the Company, the undersigned (the <I>&#147;Investor&#148;</I>) hereby confirms and certifies
that:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;Upon the terms and subject to the conditions set forth in this Subscription Agreement, the
Investor irrevocably subscribes for and agrees to purchase from the Company the number and amount
of Shares set forth on the signature page of this Subscription Agreement (the &#147;<I>Investor&#146;s Shares</I>&#148;)
at a price per share equal to the public offering price per share in the Company&#146;s underwritten
initial public offering (the &#147;<I>Offering</I>&#148;) (the &#147;<I>Purchase Price</I>&#148;). The Investor understands and
agrees that the Company reserves the right to accept or reject the Investor&#146;s subscription for the
Shares for any reason or for no reason, in whole or in part, at any time prior to its acceptance by
the Company, and the same shall be deemed to be accepted by the Company only when this Subscription
Agreement is signed by a duly authorized person by or on behalf of the Company; the Company may do
so in counterpart form. The Investor understands and agrees that there is no minimum amount of
Shares required to be sold by the Company in the Offering. In the event of rejection of the
Investor&#146;s entire subscription by the Company or the termination of this Subscription Agreement in
accordance with the immediately preceding sentence, the Investor&#146;s payment hereunder will be
returned promptly to the Investor, and this Subscription Agreement shall have no force or effect.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.&nbsp;The Investor agrees to deliver the Purchase Price for the Investor&#146;s Shares by wire
transfer or check payable to the Company on the closing date of the Offering.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.&nbsp;The Investor represents and warrants that it is an &#147;accredited investor&#148; within the meaning
of Rule 501(a) of Regulation&nbsp;D under the Securities Act of 1933, as amended (the &#147;<I>Securities Act</I>&#148;),
as noted on <I>Schedule&nbsp;A </I>(Eligibility Representations of the Investor), which is attached hereto and
incorporated by reference herein and made a part of this Subscription Agreement, and it is
purchasing the Investor&#146;s Shares only on its own behalf and not for the account of any other person
or entity.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.&nbsp;The Investor understands that the Investor&#146;s Shares are being offered in a transaction not
involving any public offering within the United States within the meaning of the Securities Act and
that the Shares have not been registered under the Securities Act or the securities laws of any
jurisdiction and, unless so registered, may not be sold except (a)&nbsp;to the Company or a subsidiary
thereof, (b)&nbsp;pursuant to a registration statement that has been declared effective under the
Securities Act or (c)&nbsp;pursuant to an exemption from the registration requirements of the Securities
Act, and subject to compliance with any applicable securities laws of any jurisdiction. The
Investor understands and agrees that the transfer agent for the Shares will not be required to
accept for registration of transfer any of the Shares acquired by it, except upon presentation of
evidence satisfactory to the Company and the transfer agent that the foregoing restrictions on
transfer have been complied with. The Investor acknowledges that the Company and the transfer agent
for the Shares reserve the right, prior to any offer, sale or other transfer of the Shares, to
require the delivery of an opinion of counsel, certifications and/or other information satisfactory
to the Company and the transfer agent for the Shares that the foregoing restrictions have been
complied with.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5.&nbsp;The Investor acknowledges that it has received such information as the Investor deems
necessary in order to make an investment decision with respect to the Investor&#146;s Shares. The
Investor and his advisor(s), if any, have had the right to ask questions of and receive answers
from the Company and its officers and trustees, and to obtain such information concerning the terms
and conditions of the offering of the Investor&#146;s Shares as the Investor and his advisor(s), if any,
deem relevant to making an investment decision with respect to the Investor&#146;s Shares. The Investor
represents and agrees that the prior to the Investor&#146;s agreement to purchase the Investor&#146;s Shares,
the Investor and his advisor(s), if any, have asked such questions, received such answers and
obtained such information as the Investor and its advisor(s), if any, deem relevant to making an
investment decision with respect to the Investor&#146;s Shares.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->1<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.&nbsp;The Investor represents and warrants that the Investor has such knowledge and experience in
financial and business matters as to be capable of evaluating the merits and risks of an investment
in the Shares, and the Investor is able to bear the economic risk of such investment and can afford
the complete loss of such investment. The Investor is aware that there are substantial risks
incident to the purchase of the Shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.&nbsp;The Investor represents and warrants that (a)&nbsp;the Investor is acquiring the Shares for its
own account for investment purposes and not with a view to, or for offer or sale in connection
with, any distribution in violation of the Securities Act, and (b)&nbsp;the Investor is aware of the
restrictions on transfer contained in the Company&#146;s Amended and Restated Declaration of Trust
relating to the Shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8.&nbsp;The Investor is an &#147;affiliate&#148; (as defined in Rule&nbsp;144 of the Securities Act) of the
Company.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9.&nbsp;The Investor is at least 21&nbsp;years of age and the Investor has adequate means of providing
for all his current and foreseeable needs and personal contingencies and has no need for liquidity
in this investment.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10.&nbsp;The Investor acknowledges that the Company, the Company&#146;s counsel and others will rely on
the acknowledgments, understandings, agreements, representations and warranties contained in this
Subscription Agreement. The Investor agrees to promptly notify the Company if any of the
acknowledgments, understandings, agreements, representations and warranties set forth herein change
or are no longer accurate.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;11.&nbsp;The Investor represents and warrants that the execution, delivery and performance of this
Subscription Agreement by the Investor are within the powers of the Investor, have been duly
authorized and will not constitute or result in a breach or default under or conflict with any
order, ruling or regulation of any court or other tribunal or of any governmental commission or
agency, or any agreement or other undertaking, to which the Investor is a party or by which the
Investor is bound. The signature on this Subscription Agreement is genuine, and the Investor has
legal competence and capacity to execute the same, and this Subscription Agreement constitutes a
legal, valid and binding obligation of the Investor, enforceable in accordance with its terms.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;12.&nbsp;Neither this Subscription Agreement nor any rights that may accrue to the Investor may be
transferred or assigned.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;13.&nbsp;The Company is entitled to rely upon this Subscription Agreement and is irrevocably
authorized to produce this Subscription Agreement or a copy hereof to any interested party in any
administrative or legal proceeding or official inquiry with respect to the matters covered hereby.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>THIS SUBSCRIPTION AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF MARYLAND, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS THAT WOULD
OTHERWISE REQUIRE THE APPLICATION OF THE LAW OF ANY OTHER STATE.</B>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->2<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">
<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>IN WITNESS WHEREOF</B>, the Investor has caused this Subscription Agreement to be executed as of the
date set forth below.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="45%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="55%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Signature of Investor
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature of Joint Investor, if applicable</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Name of Investor. <B>Please indicate name and capacity of
person signing above if the investor is other than a
natural person.</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name of Joint Investor, if applicable.
<B>Please indicate name and capacity of
person signing above if the joint
investor is other than a natural person.</B></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom" style="font-size:1pt">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Name in which Shares are to be registered (if different)
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U><U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2009</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left">The Investor&#146;s State of residence is: <font style="font-size: 3pt; margin-top: 0pt; width: 74%; border-bottom: 1px solid #000000">&nbsp;</font></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">If there are <I>joint investors</I>, please check one:</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Wingdings">&#111;</FONT> Joint Tenants with Rights of Survivorship</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Wingdings">&#111;</FONT> Tenants-in-Common</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR><TD align="left" valign="top">&nbsp;</TD></TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="Wingdings">&#111;</FONT> Community Property</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Investor&#146;s Tax ID No. or E.I.N.
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Joint Investor&#146;s Tax ID No. or E.I.N.</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Business Address&#151;Street
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Mailing Address&#151;Street (if different)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top" style="border-top: 1px solid #000000"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">City &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
State&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;
 Zip
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">City &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;State&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;


 Zip
</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Attn.:
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</U>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Attn.:
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</U>
</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Telephone No.:
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</U>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Telephone No.:
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</U></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Facsimile No.:
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</U></DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Facsimile No.:
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</U></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Email:
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</U>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Email:
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</U>
</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">Number of Shares Subscribed For:
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Subscription Amount: $
<U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;</U></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">You must pay the full Subscription Amount pursuant to the instructions provided by the Company.
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SCHEDULE A</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>ELIGIBILITY REPRESENTATIONS OF THE INVESTOR</B>

</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><B>A.</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><B>ACCREDITED INVESTOR STATUS (PLEASE CHECK ALL THAT APPLY)</B>:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="4%" nowrap align="left">1.</TD>
    <TD width="4%"><FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD> I am a trustee or executive officer of the Company.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%"><FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD> I am a natural person and have a net worth, either alone or with my spouse,
of more than $1,000,000.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%"><FONT face="Wingdings">&#111;</FONT>&nbsp;</TD>
    <TD> I am a natural person and had income in excess of $200,000 during each of the
previous two years and reasonably expect to have income in excess of $200,000 during
the current year, or joint income with my spouse in excess of $300,000 during each of
the previous two years and reasonably expect to have joint income in excess of $300,000
during the current year.</TD>
</TR>

</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">



<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>IN WITNESS WHEREOF</B>, Pebblebrook Hotel Trust has accepted this Subscription Agreement as of the date
set forth below.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="48%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD>
    <TD width="46%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" align="left" valign="top"><b>PEBBLEBROOK HOTEL TRUST</b></TD>
</TR>
<TR>
<TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">By:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 6pt">
<TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Name:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 6pt">
<TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Title:</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Date: <U>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</U>, 2009
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->5<!-- /Folio -->
</DIV>



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21.1
<SEQUENCE>7
<FILENAME>w75877a3exv21w1.htm
<DESCRIPTION>EX-21.1
<TEXT>
<HTML>
<HEAD>
<TITLE>exv21w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><U>Exhibit&nbsp;21.1</U>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><U>List of Subsidiaries of Pebblebrook Hotel Trust</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Pebblebrook Hotel, L.P.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>



</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>8
<FILENAME>w75877a3exv23w1.htm
<DESCRIPTION>EX-23.1
<TEXT>
<HTML>
<HEAD>
<TITLE>exv23w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 18pt">EXHIBIT 23.1
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">Consent of Independent Registered Public Accounting Firm
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Board of Trustees<BR>
Pebblebrook Hotel Trust:

</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">We consent to the use of our report included herein and to the reference to our firm under the
heading &#147;Experts&#148; in the prospectus.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 18pt">/s/ KPMG LLP
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">McLean, Virginia</div>

<DIV align="left"><FONT size="1">

</FONT></DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 0pt">December&nbsp;3, 2009
</DIV>
<DIV align="left"><FONT size="1">

</FONT></DIV>


<P align="center" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->
</DIV>




</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.1
<SEQUENCE>9
<FILENAME>w75877a3exv99w1.htm
<DESCRIPTION>EX-99.1
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w1</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif">




<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><U><B>EXHIBIT 99.1</B></U>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CONSENT OF PERSON TO BE NAMED TRUSTEE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As required by Rule&nbsp;438 under the Securities Act of 1933, as amended, the undersigned hereby
consents to being named in the Registration Statement on Form S-11 (together with any amendments or
supplements, the &#147;Registration Statement&#148;) for Pebblebrook Hotel Trust as a person who has agreed
to serve as a trustee of Pebblebrook Hotel Trust beginning immediately after the closing of the
offering.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="53%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="39%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Cydney C. Donnell</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="white-space: nowrap">Print Name:</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Cydney C. Donnell</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">December&nbsp;2, 2009</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.2
<SEQUENCE>10
<FILENAME>w75877a3exv99w2.htm
<DESCRIPTION>EX-99.2
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w2</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><U><B>EXHIBIT 99.2</B></U>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CONSENT OF PERSON TO BE NAMED TRUSTEE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As required by Rule&nbsp;438 under the Securities Act of 1933, as amended, the undersigned hereby
consents to being named in the Registration Statement on Form S-11 (together with any amendments or
supplements, the &#147;Registration Statement&#148;) for Pebblebrook Hotel Trust as a person who has agreed
to serve as a trustee of Pebblebrook Hotel Trust beginning immediately after the closing of the
offering.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="53%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="39%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Ron E. Jackson</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="white-space: nowrap">Print Name:</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Ron E. Jackson</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">December&nbsp;2, 2009</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.3
<SEQUENCE>11
<FILENAME>w75877a3exv99w3.htm
<DESCRIPTION>EX-99.3
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w3</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><U><B>EXHIBIT 99.3</B></U>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CONSENT OF PERSON TO BE NAMED TRUSTEE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As required by Rule&nbsp;438 under the Securities Act of 1933, as amended, the undersigned hereby
consents to being named in the Registration Statement on Form S-11 (together with any amendments or
supplements, the &#147;Registration Statement&#148;) for Pebblebrook Hotel Trust as a person who has agreed
to serve as a trustee of Pebblebrook Hotel Trust beginning immediately after the closing of the
offering.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="53%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="39%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Martin H. Nesbitt</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="white-space: nowrap">Print Name:</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Martin H. Nesbitt</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">December&nbsp;2, 2009</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.4
<SEQUENCE>12
<FILENAME>w75877a3exv99w4.htm
<DESCRIPTION>EX-99.4
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w4</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><U><B>EXHIBIT 99.4</B></U>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CONSENT OF PERSON TO BE NAMED TRUSTEE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As required by Rule&nbsp;438 under the Securities Act of 1933, as amended, the undersigned hereby
consents to being named in the Registration Statement on Form S-11 (together with any amendments or
supplements, the &#147;Registration Statement&#148;) for Pebblebrook Hotel Trust as a person who has agreed
to serve as a trustee of Pebblebrook Hotel Trust beginning immediately after the closing of the
offering.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="53%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="39%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Michael J. Schall</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="white-space: nowrap">Print Name:</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Michael J. Schall</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">December&nbsp;2, 2009</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.5
<SEQUENCE>13
<FILENAME>w75877a3exv99w5.htm
<DESCRIPTION>EX-99.5
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w5</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><U><B>EXHIBIT 99.5</B></U>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CONSENT OF PERSON TO BE NAMED TRUSTEE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As required by Rule&nbsp;438 under the Securities Act of 1933, as amended, the undersigned hereby
consents to being named in the Registration Statement on Form S-11 (together with any amendments or
supplements, the &#147;Registration Statement&#148;) for Pebblebrook Hotel Trust as a person who has agreed
to serve as a trustee of Pebblebrook Hotel Trust beginning immediately after the closing of the
offering.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="53%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="39%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Earl E. Webb</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="white-space: nowrap">Print Name:</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Earl E. Webb</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">December&nbsp;2, 2009</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

</BODY>
</HTML>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99.6
<SEQUENCE>14
<FILENAME>w75877a3exv99w6.htm
<DESCRIPTION>EX-99.6
<TEXT>
<HTML>
<HEAD>
<TITLE>exv99w6</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt"><U><B>EXHIBIT 99.6</B></U>
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>CONSENT OF PERSON TO BE NAMED TRUSTEE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As required by Rule&nbsp;438 under the Securities Act of 1933, as amended, the undersigned hereby
consents to being named in the Registration Statement on Form S-11 (together with any amendments or
supplements, the &#147;Registration Statement&#148;) for Pebblebrook Hotel Trust as a person who has agreed
to serve as a trustee of Pebblebrook Hotel Trust beginning immediately after the closing of the
offering.
</DIV>
<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="53%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="39%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Signature:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Laura H. Wright</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><FONT style="white-space: nowrap">Print Name:</FONT>
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Laura H. Wright</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Date:
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">December&nbsp;2, 2009</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>




</BODY>
</HTML>
</TEXT>
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<SEQUENCE>15
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