SEVENTH AMENDMENT TO HOTEL MANAGEMENT AGREEMENT

THIS SEVENTH AMENDMENT is made effective as of the 1st day of January, 2007, by
and between ROYAL HOST MANAGEMENT, INC., a Delaware corporation (“Operator”);
and TRS LEASING, INC., a Virginia corporation (“TRS”), TRS SUBSIDIARY, LLC, a
Delaware limited liability company and SPPR TRS SUBSIDIARY, LLC, a Delaware
limited liability company (collectively, “TRS”); to that certain Hotel
Management Agreement (the “Management Agreement”), dated August 1, 2004, made by
and between Operator and other parties, and amended November 7, 2005, November
30, 2005, February 20, 2006, May 8, 2006, June 29, 2006, and December 28, 2006
with reference to the following facts:

A.    TRS has entered into the Management Agreement with Operator for the
purpose of engaging Operator to operate and manage certain hotels;

B.           The parties hereto desire that the Management Agreement be amended
as provided herein.

NOW, THEREFORE, for and in consideration of the mutual covenants, conditions,
stipulations, agreements and obligations hereinafter set forth and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, the parties hereto covenant and agree as
follows:

1.           All capitalized terms used herein shall have the same meaning as
ascribed to them in the Management Agreement. Where the terms of this Amendment
may conflict with the terms of the Management Agreement, the terms of this
Amendment shall control

 

2.

Section 1.01(a)(16) is amended in its entirety as follows:

“(16)(i) “Hotel Operating Account” shall mean the bank account opened and
maintained in Lessee’s name, or the name designated by Lessee, with a banking
institution selected by Lessee, from which disbursements shall be made pursuant
to the terms of this Agreement.

(ii) “Lessee Operating Account” shall mean the bank account opened and
maintained in Lessee’s name, or in a name designated by Lessee, with a banking
institution selected by Lessee, into which all income, receipts and proceeds
included in the definition of Gross Hotel Income (without exclusion of any of
the items excluded from the definition of such term) shall be deposited.”

 

3.

Section 1.01(a)(28)(ix) is amended in its entirety as follows:

“(28)(ix) All expenses for marketing and sales, including all expenses of
advertising, sales promotion and public relations activities at the Hotels,
exclusive of Operator’s marketing manager and similar administrative personnel
(which expenses shall be borne by Operator);”

 

4.

Section 1.01(a)(28)(xvi) is amended in its entirety as follows:

“(28)(xvi) All reasonable travel expenses of Operator’s supervisory personnel
(to the extent approved by Lessee) for visits to the Hotels in the performance
of their

duties hereunder, but not including travel between Operator’s main office in
Canada and Operator’s regional offices; and”

5.           Section 1.01(a)(28)(xvii) and Section 2.01(f) are amended to
replace the words “Base Fee” therein with “Basic Fee.”

 

6.

Section 1.01(a)(32) is amended in its entirety as follows:

“(32) “Operator’s Basic Fee” shall mean a monthly fee equal to a percentage of
Gross Hotel Income for a month determined as follows: (i) 4.25% of Gross Hotel
Income for the month for up to the first $75,000,000 of Gross Hotel Income for a
Fiscal Year, (ii) 4.00% of Gross Hotel Income for the month for Gross Hotel
Income exceeding $75,000,000 up to $100,000,000 for a Fiscal Year and (iii)
3.00% of Gross Hotel Income for the month for Gross Hotel Income exceeding
$100,000,000 for a Fiscal Year.”

 

7.

Section 1.01(a)(37) is amended to add the following sentence at the end thereto:

“Amounts initially included in Total Investment which are subsequently
reclassified to other balance sheet line items shall nonetheless remain included
in the determination of Total Investment for purposes of this Agreement and for
purposes of the amounts set forth on Exhibit C.”

 

8.

Section 2.01(a) is amended in its entirety as follows:

“(a)        The initial term of this Agreement shall commence on the date set
forth at the beginning of this Agreement and shall terminate at midnight on
December 31, 2011, subject to earlier termination as set forth herein. If (i)
Operator has achieved an average annual NOI of at least 10% of the Total
Investment during the four (4) Fiscal Years ending December 31, 2010 for all the
Hotels in the aggregate and (ii) no Event of Default by Operator shall have
occurred prior to December 31, 2011, the term of this Agreement shall
automatically be extended for five (5) years unless Operator notifies Lessee on
or prior to June 1, 2011 that Operator does not wish to extend the term hereof.
The initial term, as it may be extended hereunder, is referred to herein as the
“Operating Term.”

 

9.

Section 2.01(c) is amended to delete the word “Excess” therefrom.

10.         Section 2.01(d) is amended to replace the last paragraph thereto
with the following:

“In the event Lessee terminates this Agreement in accordance with this Section
2.01(d), Lessee shall pay Operator a termination fee equal to the greater of (i)
$3,600,000 less an amount equal to $100,000 multiplied by the number of months
after December 31, 2006 preceding the month the notice of termination is
delivered or (ii) 50% of the Operator’s Basic Fee paid to Operator during the 12
months prior to the notice of termination.”

 

11.

Section 2.01(e) is amended in its entirety as follows:

“(e) This Agreement may be terminated by Lessee upon a change of control of
Operator (as defined below) during the Operating Term. Said termination will be

exercised by delivery of written notice to the Operator, such notice to be
provided within thirty (30) days following the Lessee being made aware of the
event giving rise to the change of control and not less than thirty (30) days
prior to the effective date of termination which notice shall set forth the
effective date of termination; provided, in the event such written notice to
Operator is not provided in accordance with the terms of this sentence, the
Lessee shall be deemed to have waived any rights to terminate this Agreement
with respect to the particular change of control giving rise to the required
notice. For purposes hereof, a “change of control of Operator” shall be deemed
to have occurred if (i) either Greg Royer or Terrance Royer are not actively
managing the Hotels (directly, or indirectly through the Operator), (ii) Greg
Royer and Terrance Royer (or corporate or other entities directly or indirectly
controlled by Greg Royer or Terrance Royer individually or collectively with
their respective family members) do not in the aggregate own more than 50% of
the outstanding equity and voting interests in Operator, or (iii) either Greg
Royer or Terrance Royer die or become disabled (disability consisting of illness
or injury pursuant to which the person is unable to perform his active
management duties for a period of sixty consecutive days). Operator shall not be
entitled to a termination fee in such an event; provided if Lessee terminates
this Agreement by reason of a change of control of Operator that occurred due to
the death or disability of Greg Royer or Terrance Royer, then Lessee shall pay
Operator a termination fee in the amount described in Section 2.01(d) above.”

 

12.

Section 2.01(f) is amended in its entirety as follows:

“(f) Lessee may terminate this Agreement upon sixty days’ notice to Operator if
the United States tax laws change to allow a hotel REIT to self-manage its
properties. In the event Lessee terminates this Agreement in accordance with
this Section 2.01(f), Lessee shall pay Operator a termination fee equal to the
greater of (i) $3,600,000 less an amount equal to $100,000 multiplied by the
number of months after December 31, 2006 preceding the month the notice of
termination is delivered or (ii) 50% of the Operator’s Basic Fee paid to
Operator during the 12 months prior to the notice of termination.”

 

13.

Section 2.01 is amended to add the following new Section 2.01(g) as follows:

“(g) Except as provided in Section 2.01(d), Section 2.01(e) and Section 2.01(f),
Operator shall not be entitled to a termination fee in the event this Agreement
is terminated by Lessee.”

14.         Section 3.08 is amended to delete the fifth sentence thereof (which
provides that “25 properties per District Manager will be deemed appropriate”)
and adding the following sentence to Section 3.08:

“The base compensation of District Managers who are approved by Lessee shall be
treated as Operating Expenses pursuant to Section 1.01(a)(28); all other
compensation of the District Managers, including incentive and bonus
compensation, shall be the expense of the Operator.”

 

15.

Section 8.03 is amended to replace the third sentence thereof with the
following:

“All receipts and income, including without limitation, Gross Hotel Income shall
be promptly deposited in the Lessee Operating Account.”

 

16.

Section 17.01(a) is amended to add the following thereto:

“(10) Any of the Hotels receives a “failure” or its equivalent in any quality
inspection report from any of the Franchisors, if such deficiencies are within
Operator’s reasonable control, for two (2) successive inspections.”

17.       Section 17.01(b) is amended to add “(10)” to the items referenced in
the second sentence of such subsection, and by adding the following proviso at
the end of the second sentence:

“; provided, in the case of an event described in Section 17.01(a)(10), the
defaulting party shall cure such default by receipt of a favorable quality
inspection report upon the next inspection by the Franchisor.”

18.         Lessee hereby waives any Events of Default which have occurred prior
to January 1, 2007. Operator hereby reaffirms all representations and warranties
of the Operator contained in the Management Agreement as if such representations
and warranties were made as of January 1, 2007.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment effective as
of the date first set forth above in multiple counterparts, all of which shall
be deemed to be one and the same agreement.

 

ROYAL HOST MANAGEMENT, INC.

By:      /s/ Terrance Royer

 

Title:   President

TRS LEASING, INC.

By:      /s/ Donavon Heimes

 

Title:    Vice President and Treasurer

 

 

TRS SUBSIDIARY, LLC

By:      /s/ Donavon Heimes

 

Title:   Vice President and Treasurer

 

 

 

SPPR TRS SUBSIDIARY, LLC

By:      /s/ Donavon Heimes

 

Title:   Vice President and Treasurer