Exhibit 10.65

MANAGEMENT AGREEMENT

This Management Agreement (“Agreement”) is made effective as of the last date on
which it is signed by one of the parties (the “Effective Date”), by and between
[________] , a [Delaware limited liability company], whose principal place of
business is 405 Park Avenue, New York, NY 10022 (hereinafter referred to as
“Owner”), and AMERICAN REALTY CAPITAL HOSPITALITY GRACE PORTFOLIO, LLC, a
Delaware limited liability company, whose principal place of business is 405
Park Avenue, New York, NY 10022 (hereinafter referred to as “Manager”). Although
this Agreement is a binding contract as of the Effective Date, its Term (defined
below) shall not commence, and the parties’ respective obligations incident to
the day-to-day management of any Hotel (defined below) shall not commence, until
the later to occur of (1) the approval of this Agreement by the holder of the
Mortgage (defined below) (or such holder’s servicer or other agent) as required
under the terms of the Mortgage; and (2) the successful closing of the purchase
and sale of such Hotel by Property Owner, which such later occurring date will
be documented in a writing from Owner to Manager at least 30 days in advance
(the “Management Commencement Date”). If the Management Commencement Date with
respect to any Hotel does not occur on or before [_____] [_], [___], then this
Agreement shall automatically terminate with respect to that Hotel with no
liability to either party.

RECITATIONS

WHEREAS, Owner is the operating lessee of that certain hotel more fully
described in Exhibit A attached hereto (the “Hotel”), which is leased pursuant
to the lease (the “Lease”) between Owner and [___________], which is the owner
of the Hotel (“Property Owner”); and

WHEREAS, subject to the terms and provisions of this Agreement, Owner desires to
have Manager manage and operate the Hotel; and

WHEREAS, Manager is willing to perform such services as agent of and for the
account of the Owner in accordance with the terms hereof.

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

ARTICLE I
CERTAIN DEFINITIONS

Section 1.1    Accounting Period. The term Accounting Period as used in this
Agreement shall mean each of twelve (12) accounting periods of one (1) calendar
month occurring each Fiscal Year.

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Section 1.2    Affiliate. The term Affiliate as used in this Agreement shall
mean (i) any Person directly or indirectly controlling, controlled by, or under
common control with such Person, (ii) any officer, director, manager, member, or
general partner of such Person, or (iii) any Person who is an officer, director,
manager, member, general partner, or trustee of any Person described in clauses
(i) and (ii) of this sentence. For purposes of this definition, the term
“controls,” “is controlled by,” or “is under common control with” shall mean the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a person or entity, whether through the ownership
of voting securities, by contract, or otherwise.

Section 1.3    Base Management Fee. The term Base Management Fee as used in this
Agreement shall have the meaning set forth in Section 9.1 hereof.

Section 1.4    Consumer Price Index. The term Consumer Price Index as used in
this Agreement shall mean the “Consumer Price Index” published by the Bureau of
Labor Statistics of the United States Department of Labor, U.S. City Average,
All Items for Urban Consumers (1982-1984 = 100) (CPI-U).

Section 1.5    FF&E.    The term FF&E as used in this Agreement shall mean
furniture, furnishings, wall coverings, floor coverings, window treatments,
fixtures and hotel equipment and vehicles.

Section 1.6    Fiscal Year. The term Fiscal Year shall mean a Calendar Fiscal
Year starting on January 1 and ending on December 31 or portion thereof
depending upon the Management Commencement Date (as defined in Section 1.11
hereof) and the applicable termination date (as determined under Section 11.1
hereof).

Section 1.7    GAAP. The term GAAP shall mean those accounting principles,
conventions, rules, procedures, and practices, consistently applied, affecting
all aspects of recording and reporting financial transactions which are
generally accepted and applied to the hospitality industry by major
international independent accounting firms.

Section 1.8    Gross Operating Revenues. The term Gross Operating Revenues as
used in this Agreement shall mean all receipts, revenues, income and proceeds of
sales of every kind received by Manager directly or indirectly from the
operation of the Hotel including without limitation, amounts collected that had
previously been written off as uncollectible accounts all determined in
accordance with GAAP. Gross Operating Revenues shall exclude all sales and
excise taxes and any similar taxes collected as direct taxes payable to taxing
authorities; gratuities or service charges collected for payment to and paid to
employees; credit or refunds to guests; proceeds of insurance, save and except
for proceeds of insurance with respect to use and occupancy or business
interruption insurance; proceeds of sales of real estate and/or FF&E; proceeds
of refinancings; proceeds of condemnation; and any amounts written off as
uncollectible accounts.

Section 1.9    Gross Operating Profit. The term Gross Operating Profit as used
in this Agreement shall mean the excess, during each Fiscal Year (and
proportionately for any period less

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than a Fiscal Year), of Gross Operating Revenues over expenses and deductions
incurred in the operation of the Hotel by Manager in fulfilling its duties
hereunder during such period, determined in accordance with GAAP and the
accounting system established by the Uniform System (except as modified by this
Agreement and where GAAP and the Uniform System conflict, GAAP shall control).
In arriving at Gross Operating Profit, all expenses shall be proper deductions
from Gross Operating Revenues insofar as they relate to the operation of the
Hotel including all franchise fees, license fees, and direct out-of-pocket
charges of employees of Manager or its Affiliates as well as corporate charges
(as described below and to the extent set forth in the Annual Business Plan);
provided, however, in arriving at Gross Operating Profit, there shall be no
deduction for the Base Management Fees, Incentive Fee or any of the following
fixed charges: property taxes, property insurance, capital leases, reserve for
replacements and debt service and/or lease payments.

Out-of-pocket costs and corporate charges include, but are not limited to the
following:

(a)
travel costs for corporate staff traveling specifically on behalf of or for the
benefit of the Hotel;

(b)
express mail and regular postage for items sent specifically to or on behalf of
the Hotel, which would include accounts payable checks, weekly invoices and
accounting information to and from the Hotel, payroll checks and reports from
ADP and other documents necessary for the efficient operation of the Hotel;

(c)
telephone and fax costs specifically for the Hotel, tracked on an individual
call basis;

(d)
costs of photocopying specifically for the Hotel, tracked electronically by
copier code;

(e)
certain corporate charges, which are billed on a consolidated or group basis to
all hotels operated by Manager and are allocated to the individual hotels,
including but not limited to:

(i)    Smith Travel Research reports;
(ii)    Human Resource forms, including employment applications,
                pamphlets, newsletters, employee manuals and other employment
                related forms;
(iii)    costs for envelopes and check stock for accounts payable allocated
                on an actual check processed basis;
(iv)    ADP payroll processing costs billed on a per active employee
                contract basis;
(v)    record storage charges for the Hotel, which is based on mandatory
                record     retention schedules;
(vi)    prorated share of the costs for regional and national conferences
                attended by employee(s) of the Hotel.

All of the items set forth in items (a)-(e) above shall be reimbursable to the
Manager solely to the extent approved in the Annual Business Plan and, for the
items in (e) above, to the extent set forth in a separate schedule of corporate
charges in such Annual Business Plan.

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Section 1.10    Incentive Fee. The term Incentive Fee as used in this Agreement
shall have the meaning set forth in Section 9.2 hereof.

Section 1.11    Management Commencement Date.     The term Management
Commencement Date as used in this Agreement shall have the meaning set forth in
the preamble hereof.

Section 1.12    Net Operating Income. The term Net Operating Income as used in
this Agreement shall mean Gross Operating Profit less the Base Management Fees,
property taxes, insurance, capital leases, reserve for replacements and/or lease
payments.

Section 1.13    Operating Funds. The term Operating Funds as used in this
Agreement shall have the meaning set forth in Section 6.2 hereof.         

Section 1.14    Person.     The term Person as used in this Agreement shall mean
any individual, partnership (whether general or limited and whether domestic or
foreign), limited liability company, corporation, trust, estate, association,
custodian, nominee, or other entity.

Section 1.15    RevPAR. The term RevPAR as used in this Agreement shall mean
revenue per available room.

Section 1.16    STR Report.    The term STR Report as used in this Agreement
shall mean the RevPAR Index included in the STR Report produced by Smith Travel
Research or, if Smith Travel Research no longer is in existence at any time
during the Term, the substantially similar report of the successor of Smith
Travel Research or such other industry resource that is equally as reputable as
Smith Travel Research will be substituted, in order to obtain substantially the
same result as would be obtained if Smith Travel Research has not ceased to be
in existence.

Section 1.17    Target Net Operating Income. The term Target Net Operating
Income as used in this Agreement shall mean Net Operating Income agreed to by
Manager and Owner in the annual budgeting process which will be utilized to
determine Manager’s Incentive Fee in accordance with Section 9.2. If the Manager
and Owner cannot agree on Target Net Operating Income, then the Target Net
Operating Income for that fiscal year shall be the budgeted Net Operating
Income.

Section 1.18    Uniform System. The term Uniform System as used in this
Agreement shall mean the Uniform System of Accounts for Hotels, “Tenth Revised
Edition”, 2006, as revised and adopted by the Hotel Association of New York
City, Inc., from time to time, and as modified by applicable provisions of this
Agreement.

Other terms are defined in the Recitations and the further provisions of this
Agreement, and shall have the respective meanings there ascribed to them.

ARTICLE II
ENGAGEMENT OF MANAGER AND

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COMMENCEMENT OF MANAGEMENT OF THE HOTEL

Section 2.1    Engagement of Manager to Manage Hotel. Owner hereby appoints
Manager as Owner’s exclusive agent, subject to the terms of this Agreement, to
supervise, direct and control the management and operation of the Hotel, and
Manager hereby undertakes and agrees to perform, as the agent of and for the
account of Owner, all of the services and to comply with all of the provisions
of this Agreement, upon all of the terms and conditions hereinafter set forth
and agrees to devote the necessary amount of attention and energies to ensure
the diligent performance of its responsibilities hereunder. In performing the
services and duties set forth in this Agreement, Manager shall provide services
of at least the same quality and standards provided by Manager or any of its
Affiliates for any other hotels managed by Manager or any of its Affiliates.
Manager shall have no right or authority, express or implied, to commit or
otherwise obligate Owner or Property Owner in any manner whatsoever except to
the extent specifically provided herein or specifically authorized in writing by
Owner.

Section 2.2    [Intentionally omitted].

Section 2.3    Owner’s Properties. (a) Owner and Manager acknowledge that
Property Owner or Owner retains title and ownership of the Hotel, and (subject
to the provisions of this Agreement) Owner has the right to exclusively control
the Hotel (and any other related assets that may be held from time to time by
Property Owner or Owner, respectively) and that Manager will not acquire title
to, ownership or control of, any interest in or any rights whatsoever in or with
respect to the Hotel (or such other assets), or any income, receipts, proceeds
or revenues deriving from any of the foregoing except as expressly authorized
herein. If for any reason Manager acquires title or ownership to any interest in
the Hotel (or to the income, receipts, proceeds or revenues deriving therefrom),
all such items shall be held in trust by Manager for the benefit of Owner and
promptly turned over to Owner.

(b)    During the Term, and at all times thereafter, subject to applicable law,
all customer files and guest lists attributable to the Hotel (collectively,
“Owner’s Materials”) shall be and remain the property of Owner. Manager hereby
acknowledges that it has no right, title or interest in or to Owner’s Materials,
other than in performing its obligations hereunder, and agrees, in each instance
subject to applicable law (i) not to claim any such interest, (ii) other than
disclosure to the officers and directors of Manager, and the employees of the
Hotel, as necessary for fulfillment of such employees’ employment obligations,
not to disclose or distribute Owner’s Materials to any third person except as
required by applicable law, (iii) not to use Owner’s Materials for any purpose
other than in connection with operation of the Hotel, and (iv) upon the
expiration or earlier termination of this Agreement, to cease all use of Owner’s
Materials and to return to Owner all copies of Owner’s Materials in its
possession, and to otherwise comply with the terms and conditions of this
Agreement, including, without limitation, Section 11.4 hereof. During the Term,
subject to applicable law, Owner’s Materials shall be immediately available for
inspection by Owner upon notice to Manager at Manager’s principal business
office.

Section 2.4    Manager’s Right to Assign its Rights and Obligations. Any right
or obligation of Manager under this Agreement may be assigned by Manager to a
hotel management company

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approved by Owner (“Sub-Manager”). Upon any such assignment, references herein
to “Manager” shall be deemed to refer to Sub-Manager except to the extent that
such a reference does not make sense (the parties’ intent being that although
the Manager will remain ultimately responsible hereunder, Sub-Manager will
undertake as many of Manager’s obligations and responsibilities as is feasible;
Manager shall be the final arbiter of whether a particular reference to Manager
does not include Sub-Manager).

ARTICLE III
OPERATION OF THE HOTEL
AFTER THE MANAGEMENT COMMENCEMENT DATE

Section 3.1    Authority of Manager. On and after the Management Commencement
Date, the Manager shall have the exclusive authority and duty to direct,
supervise, manage and operate the Hotel in an efficient and economical manner
and to determine the programs and policies to be followed in connection
therewith, all in accordance with the provisions of this Agreement and the
approved Annual Business Plan (or the Annual Business Plan being used pursuant
to Article VIII hereof). Subject to the provisions of this Agreement, Manager
shall have the authority and duty to:

A.    Subject to Section 3.3 hereof, recruit, employ, relocate, pay, supervise,
and discharge all employees and personnel necessary for the operation of the
Hotel. Included in the foregoing shall be the determination of all personnel
policies.

B.    Establish all prices, price schedules, rates and rate schedules, rents,
lease charges, concession charges, all within the parameters of the approved
Annual Business Plan (or the Annual Business Plan being used pursuant to Article
VIII hereof); provided, “trade-outs” in excess of one thousand dollars ($1,000)
per Accounting Period shall require the prior written approval of Owner.

C.    Administer leases, license and concession agreements for all public space
at the Hotel, including rooftop leases and licenses, cell tower leases and
licenses and egress and ingress agreements, stores, office space and lobby
space. Manager shall also negotiate and enter into, in the name of Owner and
executed by Manager on behalf of Owner any such lease, license or concession
(excluding rooftop leases and licenses, cell tower leases and licenses and
egress and ingress agreements) subject to the prior written approval of Owner.
Manager acknowledges that Owner shall be responsible for negotiation and
execution of all rooftop leases and licenses, cell tower leases and licenses and
egress and ingress agreements.

D.    Negotiate and enter into, on behalf of the Owner, service contracts and
licenses required in the ordinary course of business in operating the Hotel;
provided, however, any contract shall require the prior written approval of
Owner if such contract (i) cannot be terminated, without cause and without the
payment of any termination fee or similar payment, upon thirty (30) days prior
written notice or (ii) requires payments to, or from, the Hotel in excess of
$25,000 per year.

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E.
Notify Owner promptly of (i) any lawsuits, arbitration proceedings, condemnation
proceedings or other governmental orders or actions, or any threat thereof, (ii)
any non-compliance with or violation of applicable law, (iii) any material
physical damage to the Hotel or FF&E or (iv) any other events or material
information becoming known to Manager which might adversely affect the Hotel,
Owner, or Property Owner.

F.
At Owner’s cost, keep the Hotel, including, without limitation, sidewalks,
signs, parking lots and landscaping, in a safe, clean, and sightly condition and
institute and effectuate a preventative maintenance program.

G.
Use commercially reasonable efforts to comply with (and monitor Owner’s and
Property Owner’s compliance with) all applicable laws, all terms, conditions and
obligations of Owner and/or Property Owner under all mortgages, loan agreements
(including any cash management provisions contained therein), other contracts
and restrictive covenants and reciprocal easement agreements (or similar
instruments encumbering the Hotel), including, without limitation, the franchise
agreement and promptly advise Owner of any violations thereof or defaults
thereunder.

H.
Notify Owner and applicable insurance carriers in the manner required by the
applicable policy of any fire or other casualties occurring in, on or about the
Hotel and any damage to the Hotel and file customary loss and other reports in
connection therewith. Notify applicable general liability insurance carriers and
Owner promptly of any personal injury or property damage occurring to or claimed
by any guest of the Hotel or third party on or with respect to the Hotel of
which Manager has knowledge and promptly forward to the carrier any legal
documents served upon Manager relating to potential liability, with copies to
Owner of all such documents.

I.
To the extent within Manager’s control, comply with all present and future laws,
ordinances, orders, rules, regulations and requirements of all federal, state
and local jurisdictions and of the local board of fire underwriters having
jurisdiction in the county in which the Hotel is located or any other body
exercising functions similar to the foregoing or any appropriate insurance
carriers; provided that (i) Owner has approved any action necessary for such
compliance, if Owner’s approval is required hereunder and Owner has approved the
expenditure of any funds necessary for such compliance and (ii) if such
compliance requires the actions or approval of third parties, Manager shall be
obligated to use commercially reasonable efforts to cause such third parties to
so comply or approve.

J.
Provide recommendations to Owner (on no less than an annual basis and more
frequently, if and to the extent reasonably required by Owner) regarding (and
when approved by Owner, institute and implement), appropriate sales, marketing
and promotional services, including definition of policies, determination of
annual and long-term objectives for advertising, occupancy levels, room rates,
hotel revenues, clientele structure, sales terms and other marketing services.

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K.
Comply in all material respects with all applicable laws with respect to
collecting, accounting for and paying to the appropriate governmental
authorities all applicable excise, sales and use taxes and other similar
governmental charges resulting from the operation of the Hotel.

L.
Establish accounting systems and internal controls as may be required by
applicable law.

Notwithstanding anything to the contrary herein, Manager shall have no
authority, without the prior written consent of Owner, to (i) sell or in any way
hypothecate the Hotel or any of Owner’s Materials, (ii) sign any document in the
name or on behalf of Owner or Property Owner, except pursuant to a duly
authorized and executed power of attorney or as expressly authorized herein or
(iii) act on behalf of, or hold itself out as having authority to act on behalf
of, Owner or Property Owner in any manner which is beyond the scope of the terms
of this Agreement.
Section 3.2    Employees. Manager or an Affiliate of Manager shall be the
employer of all employees in the Hotel. Manager’s agents and employees shall be
acting as the agent of the Owner. Manager or shall have complete authority over
pay scales and all benefit plans, subject to Owner’s approval of the Annual
Business Plan described in Article VIII hereof; provided, however, Manager’s
methodology and calculation of bonuses shall be subject to the prior written
approval of Owner.
Section 3.3    Key Hotel Management Personnel. With respect to the General
Manager of the Hotel (the “Key Hotel Management Personnel”), Owner shall have
the following rights:

A.
Owner shall have the right to approve the appointment of any Key Hotel
Management Personnel at the Hotel.

B.
Manager shall provide to Owner at least thirty (30) days prior notice of any
transfers of Key Hotel Management Personnel from the Hotel and Manager shall
permit Owner to speak with any such Key Hotel Management Personnel regarding
possible continued employment at the Hotel. In addition, Manager agrees that it
shall not hire or solicit for employment, directly or indirectly, any such Key
Hotel Management Personnel during the ninety (90) day period preceding any
termination of this Agreement.

C.
Without the prior written consent of Owner, no Key Hotel Management Personnel
shall perform services for any other hotel or serve in any regional or
supervisory capacity for Manager.

Notwithstanding the foregoing, nothing in this Agreement shall prohibit Manager
from terminating or disciplining any Key Hotel Management Personnel in
accordance with Manager’s employment practices, policies and procedures
consistently applied.

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In addition, Manager shall not enter into any neutrality, card-check, accretion,
collective bargaining or other similar agreement (a “Union Agreement”) without
the prior written approval of Owner and Manager shall immediately provide
written notice to Owner if any union organizational or similar activities occur
at the Hotel or with respect to any employees of the Hotel. Manager represents
and warrants to Owner that neither Manager nor any of its Affiliates are bound
to any Union Agreement which would bind the Hotel or any employer of employees
of the Hotel.

Section 3.4    Purchases from Manager’s Affiliates and National Account Vendors.
Manager shall be permitted to utilize both Manager’s Affiliates and the national
account vendors of Manager or Manager’s Affiliates in contracting for goods or
services for the Hotel; provided, however, if Owner demonstrates to Manager that
another vendor will provide the same goods or services at a cost below the cost
of the goods or services obtained through Manager’s Affiliate or the national
account vendor and on equal terms and quality, Owner may require Manager to
purchase such goods or services from such other vendor following the expiration
or termination of the then existing contract for such goods and services and any
and all rebates, commissions or similar payments received by Manager in
connection with such purchasing shall be allocated and paid, on a ratable basis,
to the hotels (including the Hotel) that participate in such purchasing
programs.

Section 3.5    No Direct Competition. Except for the hotels set forth on Exhibit
B, Manager hereby agrees that without the prior written consent of Owner,
neither Sub-Manager, nor any of Sub-Manager’s Affiliates, shall own or manage
any select service hotel that is (i) located in the downtown area of the City of
Portland, Oregon and (ii) competes in the same market segment as the Hotel. In
the event that Owner obtains knowledge that Manager or its Affiliate is
violating this Section 3.5, Owner shall give Manager prompt notice of such
violation and if Manager does not remedy such violation within such thirty (30)
day period, Owner’s sole and exclusive remedy for such violation shall be to
terminate this agreement without payment or penalty (other than payment of Base
Management Fee, Incentive Management Fee, Accounting Fee, Shared Services fees
and other reimbursements due to Manager through the effective date of
termination) by written notice to Manager, such termination to be effective no
sooner than sixty (60) days from the date of such notice.

Section 3.6    Shared Services. Solely to the extent approved by Owner in the
Annual Business Plan, and to the extent more efficiently provided on a group or
centralized basis rather than on an individual basis, Manager may provide
certain services, however specifically excluding revenue management, accounting
services, and supervision by regional operations managers, on a
centralized/shared basis (“Shared Services”) to the Hotel and other similar
hotels managed by Manager or its Affiliates. The Manager shall set forth any and
all Shared Services on a separate schedule in the Annual Business Plan and the
amounts budgeted for such Shared Services. Solely to the extent the costs of
such Shared Services are approved by Owner in the Annual Business Plan
(including the methodology and allocation methods used by Manager to determine
such costs, all of which shall be substantiated to Owner by Manager with
supporting documentation satisfactory to Owner), Manager shall be entitled to be
reimbursed for the Hotel’s fair and equitable share of such costs reasonably
incurred by Manager in providing such Shared Services on a system-wide basis to
hotels managed by Manager or its Affiliates; provided however, that Owner’s
costs will reflect the actual costs of such Shared Services and will not include
additional costs or fees imposed

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by Manager. Owner is entitled to reimbursement from Manager of any excess fees
paid to Manager if actual expenses for such Shared Services are below the
allocated cost to Owner. Manager shall have no authority to add any Shared
Services without prior written approval of Owner and Owner may terminate the
Hotel’s participation in any Shared Services upon thirty (30) days prior written
notice to Manager.

ARTICLE IV
OPERATING EXPENSES PAID BY OWNER

Section 4.1    Expenses Incurred by Manager on Behalf of Owner. Everything done
by Manager in the performance of its obligations and all expenses incurred under
this Agreement shall be for and on behalf of Owner and for its account. All
debts and liabilities arising in the course of business of the Hotel are and
shall be the obligations of Owner, and Manager shall not be liable for any of
such obligations by reason of its management, supervision and operation of the
Hotel for Owner. Unless expressly stated herein, neither Manager nor any of its
Affiliates shall be obligated to advance any of its own funds to or for the
account of Owner, nor to incur any liability unless Owner shall have furnished
Manager with funds necessary for the discharge thereof prior to incurring such
liability. Notwithstanding anything to the contrary contained in this Agreement,
Manager shall pay from its own funds and Owner shall not be liable for any
expenses, fees, penalties or similar amounts assessed by franchisor, in an
amount not to exceed Three Thousand and No/100 Dollars ($3,000) in connection
with remedying any failed inspections and/or failure of the Hotel to satisfy
Guest Satisfaction Score (as determined by franchisor’s quality assurance
program as promulgated in the franchisor’s manual (or any replacement program))
unless such failure was attributable to an ongoing or deferred renovation at the
Hotel; or by inadequate staffing; lack of, or inadequate quality of, supplies;
or inadequate maintenance due to directions of Owner or Owner’s failure to
provide sufficient funds to prevent such inadequacies.

    
ARTICLE V
COMPLIANCE WITH LAWS

Section 5.1    Compliance by Manager and Owner After Management Commencement
Date. Manager shall make all reasonable efforts, at expense of Owner, to comply
with all laws, rules, regulations, requirements, orders, notices, determinations
and ordinances of any governing authority, including, without limitation, the
state and local liquor authorities, the Board of Fire Underwriters and the
requirements of any insurance companies covering any of the risks against which
the Hotel is insured. If the cost of compliance exceeds Two Thousand Five
Hundred Dollars ($2,500) in any instance, Manager shall promptly notify Owner,
and Owner shall promptly provide Manager with funds for the payment of such
costs.

Section 5.2    Owner’s Right to Contest or Postpone Compliance. With respect to
a violation of any such laws or rules as described in Section 5.1 hereof, Owner
shall have the right to contest any of the foregoing and postpone compliance
pending the determination of such contest, if so permitted by law and not
detrimental to the operation of the Hotel but in such event, Owner shall
indemnify and hold harmless Manager from any loss, cost, damage or expense, as a
result

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thereof (but excluding any loss, cost, damage or expense resulting from
Manager’s failure to notify Owner of the need to comply with a law or rule, of
which Owner would not otherwise have notice).

ARTICLE VI
BANK ACCOUNTS AND OPERATING FUNDS

Section 6.1    Bank Accounts. (a) All monies including credit card receipts
received by Manager in the operation of the Hotel shall be deposited on a daily
basis in accounts, in the name of Owner, in the bank or trust company that is
convenient to the physical location of the Hotel, as recommended by Manager and
approved by Owner (the “Operating Account”). Whenever possible, the choice of
bank will be affiliated with Wells Fargo or other bank recommended by Manager
and approved by Owner (the “Master Bank”). Manager shall pay all operating
expenses of the Hotel and any fees or compensation of any kind due it pursuant
to this Agreement in accordance with the provisions of this Agreement from the
Operating Account or the accounts described in Section 6.1(b). However, for
payments to vendors that require an electronic method of payment, Manager may
remit payment to such vendors by ACH drafts or other electronic means drawn
against the Operating Account.

(b)    The Manager will establish, or has established, a centralized payroll
account and, as needed, a GM account at the Master Bank, from which the Manager
shall pay expenses of the Hotel and any payroll or related expenses incurred in
accordance with the provisions of this Agreement. The payroll account and GM
account shall be funded from the Operating Account.

(c)    All accounts established pursuant to this Article VI shall be in the name
of Owner, and the monies therein shall not be mingled with Manager’s other funds
except for the centralized payroll account. Withdrawals from all accounts
established pursuant to this Article VI shall be signed or initiated by
representatives of the Manager, provided such representatives are bonded or
otherwise insured. Representatives of the Owner shall be included as signatories
on all accounts established pursuant to this Article VI.

(d)    Manager agrees to comply with the requirements of Property Owner’s and/or
Owner’s lenders with respect to payments to lockbox accounts, including
establishing separate accounts as required by lender.

(e)    If requested by Owner, Manager shall submit to Owner within ten (10)
calendar days after the end of each Accounting Period a consolidated report
detailing the flow of cash into and out of the Operating Account, including
investment income, cash deposits, credit card deposits, payroll checks paid,
operating expense checks paid, ACH drafts and/or other electronic payments,
wires transmitted to Owner and any other use of cash. This report must also
reconcile to the sum of the individual general ledger cash balances of the
Hotel.

(f)    The cash management and account deposit procedures may be changed from
time to time by Owner in connection with any financing requirements and Manager
agrees to fully cooperate with Owner and with Property Owner’s and/or Owner’s
lenders.

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Section 6.2    During the Term of this Agreement, Owner shall maintain cash in
the Operating Account (“Operating Funds”) in a sufficient amount to properly
operate the Hotel. If at any time during the Term, the funds in the Operating
Account fall below the Minimum Balance (as defined below), Owner shall deposit
in the Operating Account additional funds in an amount equal to the difference
between the funds therein and the Minimum Balance. The minimum balance (the
“Minimum Balance”) required in the Operating Account shall be at least Fifty
Thousand and No/100 Dollars ($50,000.00). On a daily basis, the funds in the
Operating Account in excess of the Minimum Balance will be transferred to the
Owner, by electronic wire, to arrive at the bank designated by Owner before 12
Noon Central Standard Time.

ARTICLE VII
BOOKS, RECORDS AND FINANCIAL STATEMENTS

Section 7.1    Accounting System. Manager shall keep full and adequate books of
account and other records reflecting the results of operation of the Hotel on an
accrual basis, all in accordance with the Uniform System and consistent with
Generally Accepted Accounting Principles. Manager may perform accounting
services at Manager’s or its Affiliate’s corporate office or at the Hotel.
Subject to Section 3.1(D), Manager reserves the right to contract, at Owner’s
expense, with a qualified independent third party for payroll and other services
to the extent that such a contract would be cost justified. Except for such
books and records as Manager may elect to keep in its or its Affiliate’s
corporate office or other suitable location pursuant to the operation of
centralized accounting services, the books of account and all other records
relating to, or reflecting the operation of, the Hotel shall be kept at the
Hotel and, in any event, all such books and records (including payroll records)
shall be available to Owner and its representatives at all reasonable times for
examination, audit, inspection and transcription. All of such books and records
(other than payroll records), including, without limitation, books of accounts,
guest records and front office records, at all times shall be the property of
Owner. Upon termination of this Agreement, all the books and records (including
the payroll records, except to the extent prohibited by applicable law) shall be
turned over to Owner to ensure the orderly continuation of the operation of the
Hotel, but the books and records (including the payroll records) shall
thereafter be available to the Manager at all reasonable times for inspection,
audit, examination and transcription during the one (1) year period following
termination of this Agreement.

Section 7.2    Financial Statements. Manager shall deliver to Owner within ten
(10) calendar days after the end of each Accounting Period and within fifteen
(15) calendar days after the end of each Fiscal Year the following:

A.
Profit & Loss Statement by Department with month-end and year-to-date amounts
for the current and prior year periods and the current budget, together with a
comparison of actual results for such periods versus the amounts set forth in
the Annual Business Plan for such periods.

B.
Balance Sheet for the current year and prior year periods.

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C.
A budget versus actual variance report for the Hotel for the month and
cumulatively year-to-date, showing variances from the approved Annual Business
Plan (any income statement or cash flow statement line item which indicates a
variance of 10% or more for the then current month or the cumulative
year-to-date total shall be explained in reasonable detail).

D.
All bank statements and reconciliations.

E.
An aged accounts receivable listing and allowance for doubtful accounts, with a
written narrative discussion regarding significant delinquencies and
recommendations regarding accounts that should be written off. Manager shall
provide an allowance for doubtful accounts for all receivables ninety (90) days
or older; provided, however, Manager must obtain Owner’s written approval prior
to writing off as uncollectible any doubtful accounts.

F.
An accounts payable listing.

G.
A statement of the amount of compensation and reimbursements payable to Manager
or any Affiliate of Manager for such calendar month.

H.
A statement showing the transfers from the Hotel bank accounts to accounts
designated for the holding of reserves for future FF&E spending in accordance
with the Franchise Agreement and/or any requirements of Owner’s and/or Property
Owner’s lenders (such accounts, the “FF&E Reserve Accounts”), if any, for such
calendar month.

I.
Such other schedules as may be reasonably requested by Owner and customarily
prepared for businesses similar to that operated at the Hotel.

J.
Manager shall prepare and deliver to Owner all such financial statements and
reports using the form of chart of accounts set forth on Exhibit C, as
reasonably modified from time to time by Owner, in accordance with the Uniform
System and delivered in such formats (including electronic formats) reasonably
required by Owner.

Any disputes as to the contents of any such statements or any accounting matter
hereunder, shall be determined by Ernst & Young, LLP or such other independent
auditor mutually agreed upon by Owner and Manager (the “Independent Auditor”)
whose decision shall be final and conclusive on Manager and Owner.

Section 7.3    Other Financial Reports. In addition, Manager shall deliver to
Owner the following reports within the time periods set forth below:
A.
Within 25 days after the end of each fiscal quarter, an economic and operational
trend analysis for such fiscal quarter. Such economic and operational trend
analysis will include, but is not limited to, Hotel level actual, budget and
prior year’s results for: Gross Operating Revenues, Gross Operating Profit,
average daily rate,

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occupancy levels, RevPAR and measurement of any other metric critical to the
financial success of the Hotel. The above referenced data shall be incorporated
in a report format satisfactory to Owner (subject to required modifications by
Owner from time to time). Significant deviations from the Annual Business Plan
shall be accompanied by a written narrative explanation.
B.
Within twenty five (25) days after the end of each fiscal quarter, reports and
financials for the Hotel for such quarter and the fiscal period then ended. Such
reports and financials shall include (i) the reports set forth in Section 7.2,
(ii) supporting schedules for all balance sheet accounts, (iii) a report
analyzing and comparing the actual results of operations with (A) the current
Annual Business Plan, together with a narrative explanation of any significant
variances and (B) the comparable prior year period, (iv) a schedule of all
corporate cost allocations and an explanation of the manner in which the costs
are allocated and (v) market conditions, legal proceedings, receivables aging
reports and such other information as Owner may request.

C.
Within 25 days after the end of the each Fiscal Year, a written report on the
current status of the Hotel, including without limitation, written discussion of
any material variances from the Annual Business Plan during the past year and
any current maintenance and capital repair needs.

D.
On a daily basis, revenue reports.

Manager shall fully cooperate and comply with any requests of (i) internal or
external independent auditors of Owner or Property Owner to enable such auditors
to prepare reviewed, verified or audited financial statements in a timely
manner, as determined by Owner or (ii) Owner to modify the format and/or content
and substance of any of the reports described in this Article VII as well as the
delivery method and timing of delivery of such reports.

Section 7.4    Meetings. At Owner’s request, Manager shall attend monthly
meetings with Owner at a time and place designated by Owner to discuss and
review the financial and operational performance of the Hotel. In addition, at
the request of Owner, Manager shall participate in weekly conference calls with
Owner to discuss and review the financial and operational performance of the
Hotel.

ARTICLE VIII
ANNUAL BUSINESS PLAN

Section 8.1    Preparation of Annual Business Plan. At least sixty (60) days
prior to the Management Commencement Date, Manager shall submit to Owner an
Annual Business Plan for the Hotel for Fiscal Year 2015. Thereafter, at least
sixty (60) days prior to the end of each Fiscal Year, Manager shall submit an
Annual Business Plan for the Hotel for the succeeding Fiscal Year. The Annual
Business Plan shall include: an operating budget showing estimated Gross
Operating Revenues, department profits, operating expenses, and Gross Operating
Profit for the forthcoming

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Fiscal Year for the Hotel; and a marketing plan; all in reasonable detail and,
where appropriate, with the basis for all assumptions expressly set forth. Owner
shall review the Annual Business Plan and either approve or notify Manager of
any objections to the Annual Business Plan in writing within thirty (30) days of
receipt thereof. Manager shall also prepare the Hotel’s annual capital
expenditure budget and such budget shall be subject to the prior written
approval of Owner in its sole discretion.

Section 8.2    Annual Business Plan Disputes. If Manager and Owner are unable to
agree upon an Annual Business Plan or any details thereof, until a new Annual
Business Plan is agreed to, Manager shall operate the Hotel in accordance with
the prior Fiscal Year’s actual results, with the following adjustments:

A.
The expenses provided therein shall be increased to be equal to the product of
(1) the expenses in the prior Fiscal Year’s actual results multiplied by (2) the
CPI Quotient. As used herein, “CPI Quotient” shall mean (a) the Average Consumer
Price Index for the twelve months ended on September 30 of the most recently
completed Fiscal Year divided by (b) the Average Consumer Price Index for the
twelve months ended on September 30 of the prior Fiscal Year. As used herein,
the “Average Consumer Price Index” for any period shall be the average of the
Consumer Price Index for all months during the period.

B.
The RevPAR provided therein shall be increased over the previous twelve (12)
months’ RevPAR, based upon the applicable Market Tract RevPAR growth percentage
for the previous twelve (12) months, as published by Smith Travel Research, for
revenue growth.

Section 8.3    Deviations from Annual Business Plan. Manager agrees to use all
commercially reasonable efforts to prevent the actual costs of promoting,
operating, repairing and maintaining the Hotel from exceeding the budgeted
amounts set forth in the Annual Business Plan. All expenses must be charged to
the proper account as delineated in the form of budget requested by Owner from
time to time, and no expense may be classified or reclassified by Manager for
the purpose of avoiding an excess in the budgeted amount of a category.
Notwithstanding the foregoing or anything to the contrary contained elsewhere in
this Agreement but subject to the terms of and compliance with any loan
agreement, Manager shall not, without the prior written approval of Owner, make
expenditures in any Fiscal Year for any line-item in the Annual Business Plan
which, in the aggregate, exceed the budgeted amount for such line item in the
approved Annual Business Plan by more than ten percent (10%) or, in the
aggregate, ten percent (10%) of the total approved Annual Business Plan.
Notwithstanding anything herein to the contrary, Manager is not warranting or
guaranteeing in any respect that the actual operating results of the Hotel
during the period covered by the Annual Business Plan will not materially vary
from the projections described in the Annual Business Plan. However, the Manager
will provide explanations for all significant variances and implement programs
to correct or improve situations that result in such deviations.
ARTICLE IX
MANAGER’S FEES AND REIMBURSEMENTS

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Section 9.1    Base Management Fee. During each Fiscal Year after the Management
Commencement Date (and for a fraction of any partial Fiscal Year), in
consideration of the services Manager is to render under this Agreement, Manager
will be paid a fee (“Base Management Fee”) at the rate four percent (4%) of
Gross Operating Revenues of the Hotel per Fiscal Year; provided, however, that
twenty-five percent (25%) of the Base Management Fee (i.e., an amount equal to
one percent (1%) of Gross Operating Revenues per Fiscal Year (such amount, the
“Subordinated Portion of the Base Management Fee”)) shall be payable only to the
extent that (1) there is no “Trigger Period” that has occurred and is then
continuing; and (2) there is sufficient Available Cash to pay such amount (which
such amount will then be paid out of such Available Cash and from no other
source). For purposes of this Section 9.1, the term “Trigger Period” shall have
the meaning set forth in that certain Loan Agreement, dated as of [____] [__],
[__], among [_______] as Lender; and [_______] as Borrower (including any
assignment thereof, the “Loan Agreement”), and “Available Cash” shall have the
meaning set forth in Section 6.11.1(xiii) of the Loan Agreement. To the extent
that the Subordinated Portion of the Base Management Fee is not payable with
respect to any given Accounting Period or portion thereof, the unpaid amount
shall accrue and shall be payable in future Accounting Periods, to the extent,
during such future Accounting Period, that (1) there is no “Trigger Period” that
has occurred and is then continuing; and (2) there is sufficient Available Cash
to pay such accrued amount after paying the Subordinated Portion of the Base
Management Fee with respect to such future Accounting Period. Each such periodic
fee shall be paid to Management Company (or retained by Management Company as
provided below) at such time as the final monthly report for such Accounting
Period is submitted to Owner as provided in Section 7.2, above. Notwithstanding
anything to the contrary contained herein, if the Subordinated Portion of the
Base Management Fee shall be due to Management Company pursuant to the terms set
forth herein, such Subordinated Portion of the Base Management Fee shall accrue
but shall not be payable to the Management Company until such time as (x) the
Borrowers have reserved in the Future PIP Reserve Account (as defined in the
Loan Agreement) a cash deposit in an amount equal to all outstanding Future PIP
Reserve Funds (as defined in the Loan Agreement) guaranteed by that certain
Payment Guaranty (PIP Reserve Funds), dated on or about [______] [__], [___], by
[__________] a [Maryland corporation], for the benefit of Lender (the
“Guaranteed PIP Funds”), or (y) Borrowers shall have completed all PIP Work and
paid all Approved Future PIP Expenses in connection with the Guaranteed PIP
Funds with the Future PIP Reserve Funds in accordance with the Loan Documents or
as otherwise agreed to by Lender.

The Base Management Fee – excepting only the Subordinated Portion of the Base
Management Fee – will be paid in installments by deducting such fee from Gross
Operating Revenues of the Hotel immediately following the submission of the
financial statements and schedules pursuant to Section 7.2 for each Accounting
Period at the rate of the corresponding percentage of Gross Operating Revenues
for that Accounting Period. At the end of each Accounting Period, an adjustment
will be made on a cumulative year-to-date basis, if necessary, and all sums due
either the Manager or Owner shall be paid immediately. The Subordinated Portion
of the Base Management Fee shall be paid annually, following the preparation of
the annual Financial Statement in accordance with Section 7.2 and confirmation
that sufficient Available Cash exists to make such payment.

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Section 9.2    Incentive Fee. During the final two months of [___], the parties
will discuss and agree upon a reasonable Incentive Fee for Fiscal Year [____]
and thereafter. Notwithstanding anything to the contrary contained herein, the
Incentive Fee shall not be in excess of market rates for such fees.

Section 9.3    Accounting Fee. In addition to the other fees described in this
Article IX, Owner shall pay to Manager an accounting fee (the "Accounting Fee")
in the amount of $1,000 per month, payable in arrears contemporaneously with
each payment of the Base Management Fee, for accounting services for the Hotel
provided by Manager. Subject to the terms of this Agreement, Manager is
authorized to pay to itself the Accounting Fee from the Operating Account.
Manager shall, at the end of each Fiscal Year concurrently with delivery of the
annual financial statement required pursuant to Section 7.2, provide an
accounting of the overall costs of providing centralized accounting services to
the hotels that it manages, and the method of allocating such costs to
individual hotels. In the event that the Accounting Fee exceeds the cost (using
a reasonable allocation methodology) of providing such service to the Hotel,
then Manager shall refund Owner in the amount of such excess.

Section 9.4    No Other Fee Payable to Manager. Manager acknowledges and agrees
that Owner has no obligation to pay to Manager any fees or similar amounts other
than the Base Management Fee and the Incentive Fee (to the extent achieved and
earned) unless expressly agreed upon in writing by Owner.

Section 9.5     Sub-Management Fees. Notwithstanding anything to the contrary
contained herein and in any sub-management agreement, any management fee or
incentive fee due to a Sub-Manager under a sub-management agreement shall be
paid by Manager to Sub-Manager from the Base Management Fee or Incentive Fee due
to Manager under this agreement.

ARTICLE X
INSURANCE

Section 10.1    (a)    Property Insurance. Owner shall carry (i) property damage
insurance, or builder’s risk insurance, where applicable, to cover physical loss
or damage to the Hotel from so-called "All Risk" or Special Form perils
including terrorism, flood, earthquake, named windstorms and losses to
and arising out of Boiler & Machinery type perils (including but not limited to
explosion and mechanical breakdown), for the replacement cost of building and
contents, loss of profits plus continuing expenses for a minimum of a 12 months
or as required by any mortgagee or lender including extended period of indemnity
and other reasonably available commercial extensions of coverage, (ii)
commercial general liability insurance with a combined single limit for each
occurrence of not less than $50,000,000 (or such lesser amount as is obtainable
on commercially reasonable terms if $50,000,000 is not so obtainable; such
limits may be met through Primary, Umbrella, Excess or a combination thereof)
providing worldwide defense and indemnity against claims for bodily injury,
death, property damage occurring in connection with the business of the Hotel;
as well as liability arising out of assault and battery caused by use of
reasonable force to protect persons or property, false arrest, detention or
imprisonment or malicious prosecution, libel, slander, defamation or violation
of the right of privacy, wrongful entry or eviction

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and liquor law or dram shop liability; provided, however, Owner may adjust
downwards the amount of such insurance so stated if the cost of obtaining such
insurance is commercially impracticable and need not purchase “occurrence basis”
insurance if it is not generally made available by liability insurers where the
Hotel is located. Such insurance or a separate policy shall include coverage
against liability arising out of the ownership or operation of motor vehicles.
Any insurance required to be carried by Owner by the terms of this Agreement may
be under a blanket policy (or policies) covering other properties owned by
Owner, Property Owner, and/or their Affiliates. All such insurance shall be in
such amounts and with such insurers as Owner may determine. Manager shall use
its commercially reasonable efforts at all times to comply with all of the
warranties, terms, and conditions of such insurance. Manager shall notify Owner
within twenty-four (24) hours after Manager’s personnel receive notice of any
loss, damage, or injury and shall not take any action which might prejudice
Owner or Property Owner in its defense to a claim based on such loss, damage or
injury.
(b)    Manager’s Insurance Coverage. Manager shall maintain the following
insurance coverage with respect to the Hotel throughout the Term, to the extent
such insurance is commercially available, at Owner’s sole cost and expense, in
the amounts as set forth below:
(i)    Worker’s compensation insurance or insurance required by similar employee
benefit acts having a minimum per occurrence limit as Owner may deem advisable
against all claims which may be brought for personal injury or death of any
Hotel employees, but in any event not less than amounts prescribed by applicable
state laws, such policy to include Alternate Employer Endorsement in favor of
Owner and Property Owner;
(ii)    Employee dishonesty insurance in reasonable amounts and deductibles,
approved by Owner (but not less than $1,000,000), covering any theft, fraud,
dishonesty, misappropriation of funds and other similar acts of any and all of
its employees, or in job classifications normally bonded in other hotels it
manages in the United States or otherwise required by law;
(iii)    Employment Practices Liability Insurance with reasonable limits and
deductibles but not less than $1,000,000 or greater than a $50,000 deductible;
and
(iv)    Such other or additional insurance as may be (i) required under the
provisions of any applicable agreement under which Owner or Property Owner is
bound (provided Manager has been given detailed written notice of such
requirements) or (ii) requested by Owner in writing and customarily carried by
prudent operators of hotels of a similar type and nature in the geographic area
of the Hotel. Owner currently requests the following additional coverages:
1.                   Automobile Liability for claims or losses arising out of
the operation, use, loading and unloading on behalf of Hotel business of any
owned, non-owned or hired vehicles (as defined by an automobile policy)
including Owner and Property Owner as Additional Insured with minimum limits of
$1,000,000 Combined Single Limit per occurrence.

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2.                   Commercial Umbrella Liability excess of Employers Liability
and Automobile liability in the minimum amount of $5,000,000.
3.                   Cyber Liability, Privacy and Security - Manager shall, at
Owner's pro rata expense allocation, obtain and maintain, at all times and to
cover all periods during the term of this Agreement, a Cyber Liability, Privacy
and Security policy covering costs and expenses arising out of Manager's,
Manager's Affiliated entities and their respective employees’ and officers’ use,
failure to use, misuse or mistake, errors or omissions in utilizing systems,
procedures and security related to "cyber", defined to include but not be
limited to the use of computers, PDAs, Internet, intranet, Franchisor or other
independent systems, software, and communication devices, provided or acquired
for routine operation of the Hotel business. Minimum Limits of $1,000,000 per
claim and in the aggregate required.
4.                   Hotel Managers Errors & Omissions Liability - Manager
shall, at Owner's pro rata expense allocation, obtain and maintain, at all times
and to cover all periods during the term of this Agreement, a Professional
Liability policy covering claims arising out of errors, omissions, wrongful acts
and the like in the providing of professional services covered by this Agreement
to Owner or Property Owner. Minimum Limits of $1,000,000 per claim and in the
aggregate required.
5.    Insurance required to be carried by Manager under this subparagraph (iv)
shall at all times be excess of any similar insurance carried by Owner or its
Affiliates that would respond to claims against Manager; stated another way, the
insurance carried by Owner or its Affiliates is primary on behalf of Manager.
(c)    Policies Generally. Except as otherwise required by the applicable
insurers for the policies described in Section 10.1(b) all the above insurance
policies (except for worker’s compensation insurance and Employment Practices
Liability Insurance) shall name Owner and Property Owner as the insured party
and shall name as additional insured Manager and such other parties as may be
required by the terms of agreements under which Owner or Property Owner is
bound. All insurance policies shall be in such form and with such companies with
a minimum AM Best Rating of A-:VIII or higher and as shall otherwise be
reasonably satisfactory to Owner and provided Owner has given Manager detailed
written notice of such requirements, shall comply with the requirements of any
agreement under which Owner or Property Owner is bound. All insurance policies
shall specify that they cannot be cancelled except for non-pay or modified on
less than twenty (20) days prior written notice to the other respective party
and to any additional insureds in accordance with policy provisions and shall
provide that claims shall be paid notwithstanding any act or negligence of
Owner, Property Owner or Manager unilaterally or on behalf of Owner, including
without limitation their respective agents or employees. All insurance policies
shall provide, to the extent customarily obtainable from the insurance company
providing such insurance, that the insurance company will have no right of
subrogation against Owner, Property Owner, or Manager or any party to any other
agreement under which Owner or Property Owner is bound or any of their
respective agents, employees, partners, members, officers, directors or
beneficial owners.

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(d)    Waiver. Each party shall endeavor to procure from its insurers waivers of
subrogation with respect to claims against the other party under policies in
which the other party is not a named insured, and shall promptly notify the
other party in the event that any such waiver is unobtainable or is obtainable
only upon payment of an additional premium. If such waiver is obtainable only
upon payment of an additional premium, the other party shall have the right at
its option to pay such additional premium.

(e)    Contractor’s and Subcontractor’s Insurance. Manager shall require that
each contractor and subcontractor hired to perform work at the Hotel maintain
insurance against risk of physical damage to personal property belonging to it
in amounts sufficient to replace such personal property in the event of loss,
and insurance coverage at such contractor’s and subcontractor’s expense, in the
following minimum amounts:
 
Insurance
Minimum Standards
Workers’ compensation
As required by law & Umbrella Carrier
Employer’s liability
$1,000,000
Commercial general liability*
$1,000,000/$2,000,000 
Business auto coverage*
$1,000,000

Umbrella Liability              $5,000,000/$5,000,000

*These coverages shall be primary and will respond to any allegation, claim,
loss, damage, demand or judgment, or other causes of action arising out of work
done at a Hotel by the contractor or subcontractor on behalf of Owner or
Manager. Owner, Property Owner, and Manager shall be named as additional
insureds on such policies. The policies shall be written on an “an occurrence”
basis.

Owner may require additional coverage if the work to be performed is, in Owner’s
judgment, sufficiently hazardous. Manager shall obtain not later than 30 days
after the date of hiring of each contractor or subcontractor performing work at
a Hotel and keep on file policies of insurance, or other evidence of compliance
with these requirements. The policies of insurance shall provide at least 30
days’ prior written notice of cancellation or any material change in coverage to
Manager and Owner. All such policies shall be issued by insurers with a Best
rating of A-:VIII or higher.

(f)    Insurance Required by Leases or REA’s.

(i) If any leases require that tenants maintain any insurance coverage or if any
easement agreements or similar instruments encumbering the Hotel (“REA’s)
require that the parties thereto other than Owner or Property Owner (“REA
Parties”) maintain any insurance coverage, Manager shall obtain insurance
certificates annually from each tenant and REA Party and review the certificates
for compliance with the provisions of the applicable lease or REA.

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(ii)    If any lease and/or REA requires that Owner or Property Owner maintain
any insurance coverage, Manager shall advise Owner of the amounts and coverages
required and whether the insurance then carried by Owner or Property Owner is
sufficient to comply with the provisions of the applicable lease or REA.

ARTICLE XI
TERM OF AGREEMENT AND TERMINATION

Section 11.1    Term. This Agreement shall be for a period commencing at 12:01
a.m. on the Management Commencement Date, and unless sooner terminated as
hereinafter provided, shall continue until 11:59 p.m. on the 31st day of
December, 2019 (“Initial Term”) and shall automatically renew for one (1)
additional one (1) year periods (each, a “Renewal Term”) unless either party
provides a termination notice to the other party at least sixty (60) days prior
to the expiration of the then-current term. The Initial Term and any Renewal
Terms are collectively referred to herein as the “Term”.

Section 11.2    Early Termination. This Agreement can be terminated earlier as
described below. Upon termination of this Agreement, the rights and obligations
of the parties will cease except as to fees and reimbursements due the Manager
and other claims of liabilities of either party which accrued or arose before
termination.

A.    Either Party can terminate this Agreement if:

(i)    the Hotel is damaged or destroyed by a casualty and the damaged portion
of the Hotel cannot be reasonably repaired or restored within one (1) year of
the occurrence of the event;

(ii)    the entire Hotel is taken in a condemnation proceeding or a portion of
the Hotel is taken in a condemnation proceeding such that either party
determines in its reasonable judgment that the Hotel cannot be operated at
levels substantially like those experienced prior to the condemnation;

(iii)    the other party shall: apply for or consent to the appointment of a
receiver, trustee or liquidator of such party or of all or a substantial part of
its assets; file a voluntary petition in bankruptcy, or admit in writing its
inability to pay its debts as they come due; make a general assignment for the
benefit of creditors; file a petition or an answer seeking reorganization or
arrangement with creditors or to take advantage of any insolvency law or file an
answer admitting the material allegations of a petition filed against it in any
bankruptcy, reorganization or insolvency proceedings; or

(iv)    if an order, judgment or decree shall be entered by any court of
competent jurisdiction, on the application of a creditor, adjudicating it a
bankrupt or insolvent or approving a petition seeking reorganization of it or
appointing a receiver, trustee or liquidator of it or of all or a substantial
part of its assets, and such order, judgment or decree shall continue unstayed
and in effect for any period of ninety (90) consecutive days.

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B.    The Owner can terminate this Agreement if:

(i)    Manager fails to keep, observe or perform any material covenant,
agreement, term or provision of this Agreement and such default shall continue
for a period of thirty (30) days after notice thereof by Owner to Manager,
unless it is impossible for such breach or non-compliance to be remedied or
corrected within such time due to no fault of Manager in which event, Manager
shall remedy or correct such breach or non-compliance as soon as reasonably
possible but in any event no later than ninety (90) days after such written
notice;

(ii)    Manager fails to maintain its status as an approved operator under the
terms of the franchise agreement for the Hotel or the franchisor requires the
franchisee to replace current management of the Hotel;

(iii)    A material default or breach occurs under any franchise agreement due
to Manager’s failure to satisfy its obligations under this Agreement;

(iv)    Property Owner or Owner sells its interest in the Hotel to an
unaffiliated third party or consummates a sale-leaseback transaction. For the
purposes of clause (iv), a “sale of a Hotel to a bona fide unaffiliated third
party” shall include the sale of greater than fifty percent (50%) of the
economic and controlling interests of the Property Owner or Owner in the Hotel
to a bona fide unaffiliated third party;

(v)    Manager is not approved by any mortgage lender for the Hotel to manage
the Hotel, or any such lender requires the Property Owner or Owner to replace
current management of the Hotel, or Property Owner or Owner is required under
the terms of any loan document to terminate this Agreement;

(vi)    Beginning with the Management Commencement Date, if for any three (3)
consecutive Accounting Periods, the Hotel’s Guest Satisfaction Score (as
determined by franchisor’s quality assurance program as promulgated in the
franchisor’s manual (or any replacement program)) fails to satisfy the
franchisor’s requirements to maintain “clear” status;

(vii)    Beginning with the Management Commencement Date and measured as of the
end of each calendar quarter, if (on a trailing twelve month basis (the “REVPAR
Measurement Period”)), the REVPAR Index (as defined below) of the Hotel, when
compared with the Reference Group (as defined below), is less than 112.7%.

For the purposes of this Section 11.2(B)(vii):

(A)
“Reference Group” shall mean the group of hotels set forth on Exhibit D attached
hereto and made a part hereof which shall remain the same unless expressly
agreed to in writing by Owner; provided, any new hotel opening after the date of
this Agreement that is located

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within a ten (10) mile radius of the Hotel may become part of the Reference
Group subject to the prior written approval of Owner; and

(B)
“REVPAR Index” shall mean the REVPAR Index included in the STR Report for the
Reference Group.

(viii)    During any calendar quarter, the Gross Operating Profit for the Hotel
is less than ninety five percent (95%) of the amount of Gross Operating Profit
set forth in the Annual Business Plan for such calendar quarter;

(ix)    Manager breaches, or defaults under, any other agreement or contract
with Owner or any of Owner’s Affiliates and such breach or default continues
beyond any applicable notice and cure period;

(x)    Manager (excluding any hotel employees other than the Key Personnel)
commits an act of fraud, gross negligence or willful misconduct in connection
with the performance by Manager of its duties hereunder;

(xi)    A Change in Control of Manager occurs or Manager assigns this Agreement
in violation of Section 13.1 hereof;

(xii)    Manager violates or breaches any of the representations, warranties or
covenants contained in this Agreement including, without limitation, those set
forth in Section 12.2 hereof; or

(xiii) Owner:

(A)
determines in its reasonable discretion that the terms of this Agreement must be
modified to facilitate, with respect to the Hotel, Owner’s compliance with the
Bank Holding Company Act and regulations promulgated thereunder (the “BHCA”),
and

 
(B)
proposes to Manager an amendment to this Agreement to facilitate compliance with
the BHCA, which proposed amendment would not be a materially detriment to
Manager (such as modifying the fee calculations or reimbursable expense
provisions of this Agreement), and Manager is unwilling to enter into such
amendment.

 
(xiv)    At any time, Owner provides 90 days’ advance written notice of
termination without cause.
        
C.    The Manager can terminate this Agreement at any time if:

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(i)    Owner fails to pay any amounts earned and due to Manager, followed by
written notice from Manager to the Owner and failure of the Owner to remedy or
correct the same within thirty (30) days after receipt of such notice;

(ii)    Owner fails to furnish required Operating Funds in accordance with the
provisions of Article VI hereof and failure of Owner to remedy or correct the
same within thirty (30) days after receipt of written notice from Manager;

(iii)    Owner fails to make any other payment in accordance with the terms
hereof when such payment is due and payable, followed by written notice from
Manager to the Owner and Owner fails to remedy or correct same within thirty
(30) days after receipt of such notice;

(iv)    there is a default under the terms and conditions of any security
instruments executed in connection with the Hotel, which default has not been
cured within the applicable cure period for such default, followed by written
notice from Manager to Owner and Owner fails to remedy or correct same within
thirty (30) days after receipt of such notice;

(v)    Owner fails to provide the funds necessary to procure and maintain the
insurance policies with respect to the Hotel called for in Article X and Owner
fails to remedy or correct the same within thirty (30) days after receipt of
written notice from Manager;

(vi)    any licenses for the sale of alcoholic beverages in the Hotel, if
applicable, or any other license or permit necessary for the operation of the
Hotel is not issued on the Management Commencement Date and thereafter
maintained throughout the term of this Agreement, followed by written notice
from Manager to the Owner and Owner fails to remedy or correct same within
thirty (30) days after receipt of such notice (unless Owner is diligently
pursuing such license or permit in good faith); or

(vii)    there is a breach of, or non-compliance by the Owner with any other
material term, condition or covenant contained in this Agreement with respect to
the Hotel followed by written notice from Manager to the Owner and Owner fails
to remedy or correct same within thirty (30) days after receipt of such notice,
unless it is impossible for such breach or non-compliance to be remedied or
corrected within such time due to no fault of the Owner, in which event, Owner
shall remedy or correct such breach or non-compliance as soon as reasonably
possible but in any event no later than ninety (90) days after such written
notice unless the cure or remedy for such breach or non-compliance requires
construction, in which event, Owner shall proceed with such construction as
expeditiously as possible and shall have a reasonable period of time to complete
such work.

D.    [Intentionally omitted]

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Section 11.3    Remedies on Default. Notwithstanding the other provisions of
this Article XI, the party asserting a default pursuant to Section 11.2 A(iii)
or (iv), Section 11.2.B(i), (iii), (ix), (x), (xi) or (xii), or Section 11.2.C
(i), (ii), (iii), (iv), (v) or (vii) may, without prejudicing its rights to
terminate this Agreement pursuant to this Article XI, seek arbitration in
accordance with the provisions of Section 16.6 hereof, or any other legal or
equitable remedy.

Section 11.4    Termination Procedure.

A.    If a termination occurs pursuant to Section 11.2(A), the party electing to
terminate shall give the other party written notice of such election. On the
date which is thirty (30) days after the date of such notice, or such longer
period as may be required in order to comply with the Worker Adjustment and
Retraining Notification Act, 29 U.S.C. Sections 201 et. seq. (and any applicable
comparable state law) and any regulations promulgated thereunder form time to
time) Manager shall cease all activities at the Hotel and shall have no further
obligations under this Agreement except as otherwise expressly set forth in this
Agreement.

B.    If a termination occurs pursuant to Section 11.2(B), Owner shall give
Manager written notice of such election to terminate. On the date which is
thirty (30) days after the date of such notice, Manager shall cease all
activities at the Hotel and shall have no further obligations under this
Agreement except as otherwise expressly set forth in this Agreement.

C.    If a termination occurs pursuant to Section 11.2(C), Manager shall give to
Owner written notice of such election. Any time thereafter, Manager may, on
thirty (30) days’ written notice, cease all activities at the Hotel and
thereafter have no further obligations under this Agreement except as otherwise
expressly set forth in this Agreement.

D.    After the notice is given, and within sixty (60) days after the effective
date of such termination, Manager shall be paid any and all fees or expenses
earned and due it pursuant to this Agreement, and Manager shall cooperate with
Owner in the orderly transfer of management to Owner’s designated agent and
deliver to Owner all funds and accounts controlled by Manager and all books and
records with respect to the Hotel, including, without limitation, but subject to
compliance with applicable laws, all employment and benefits information. In
addition, Manager shall deliver to Owner the following:

(i)    A final accounting, reflecting the balance of income and expenses for the
Hotel as of the date of termination, to be delivered within thirty (30) days of
such termination;
(ii)    Any balance of monies of Owner held by Manager with respect to the Hotel
or the business or affairs of Owner, to be delivered immediately upon
termination;

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(iii)    All motorized vehicles used in connection with the operation of the
Hotel and paid for by Owner, together with all registration and title
documentation necessary to transfer such vehicles to Owner or its nominee, to be
delivered immediately upon termination; and
(iv)    All written and digital data and materials relating to the Hotel,
including all Owner’s Materials, records, contracts, leases, receipts for
deposits, unpaid bills and other papers or documents which pertain to the Hotel
or the business or affairs of Owner to be delivered immediately upon
termination.
E.
Upon termination of this Agreement for any reason, Manager shall (i) surrender
(and assign, if permitted) to Owner or its nominee any and all leases, licenses,
agreements, approvals, permits and/or other authorizations or property held by
Manager on behalf of Owner or Property Owner required and/or utilized for the
operation of the Hotel in accordance with the directions of Owner and with
applicable law and (ii) fully cooperate with any new manager retained by Owner
in order to facilitate an orderly transition of the management of the Hotel.

F.
Upon termination of this Agreement, Owner or its nominee shall be responsible
for assuming obligations under contracts entered into in accordance with this
Agreement or entered into by Manager only to the extent that any such contract
shall have been approved in writing by Owner or by the terms of this Agreement
and Owner shall be responsible for the payment of obligations incurred by
Manager in the operation of the Hotel only to the extent that such obligations
shall have been incurred pursuant to the Annual Business Plan or other written
authorization of Owner, and Manager hereby agrees to indemnify, defend and hold
Owner and Property Owner harmless from and against any liability in connection
with any such contracts, agreements or obligations not so approved in writing by
Owner.

ARTICLE XII
REPRESENTATIONS AND COVENANTS

Section 12.1    Owner’s Representations. Owner covenants, represents and
warrants as follows:

A.    Owner has a leasehold interest in the Hotel and has full power and
authority to enter into this Agreement;

B.    The Hotel is zoned for use as a hotel, motor hotel or resort, and all
necessary governmental and other permits and approvals for such use and for the
food and beverage (including the sale and service of liquor, if applicable)
operations of the Hotel have been obtained and are in full force and effect; and

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C.    Throughout the term of this Agreement, the Owner will pay, keep, observe
and perform all payments, terms, covenants, conditions and obligations under any
lease or other concession, any deed of trust, mortgage or other security
agreement, and any real estate taxes or assessments covering or affecting the
Hotel, unless compliance with or payment thereof is, in good faith, being
contested and enforcement thereof is stayed.

Section 12.2     Manager’s Representations.

A.    Manager represents, warrants and covenants that neither Manager, nor any
of its Affiliates (or any of their respective principals, partners, employees,
or funding sources), is nor will become (i) a person designated by the U.S.
Department of Treasury’s Office of Foreign Assets Control as a “specially
designated national or blocked person” or similar status, (ii) owned or
controlled by a specially designated national or blocked person, (iii) a person
described in Section 1 of U.S. Executive Order 13224 issued on September 23,
2001; (iv) a person otherwise identified by a government or legal authority as a
person with whom Owner or Manager is prohibited from transacting business; (v)
directly or indirectly owned or controlled by the government of any country that
is subject to an embargo by the United States government; or (vi) a person
acting on behalf of (A) a government of any country that is subject to an
embargo by the United States government or (B) a specially designated national
or blocked person. Manager agrees that it will notify Owner in writing
immediately upon the occurrence of any event which would render the foregoing
representations and warranties contained in this Section incorrect.

B.    Manager represents, warrants and covenants: (i) that it is familiar with
the United States Foreign Corrupt Practices Act, 15 U.S.C. §§ 778dd-2 (the
“FCPA”), a copy of which is available at
http://www.usdoj.gov/criminal/fraud/fcpa.html, and the purposes of the FCPA, and
in particular, the FCPA’s prohibition of the payment or the gift of any item of
value, either directly or indirectly, by a company organized under the laws of
the United States of America, or any of its states, to an official of a foreign
government for the purpose of influencing an act or decision in such person’s
official capacity, or inducing such person to use influence with the foreign
government to assist a company in obtaining or retaining business for, with, or
in that foreign country or directing business to any person or company or
obtaining an improper advantage, and (ii) that it has not taken, and during the
Term of this Agreement it will not take, any action that would constitute a
violation of the FCPA or any similar law.

C.
Manager is a limited liability company validly existing and in good standing
under the laws of the State of Delaware, with full right, power and authority to
enter into this Agreement and to perform its obligations hereunder.

D.
This Agreement has been duly and validly executed and delivered by and on behalf
of Manager, and, assuming the due authorization, execution and delivery thereof
by

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and on behalf of Owner, constitutes a valid, binding and enforceable obligation
of Manager enforceable in accordance with its terms, except to the extent such
enforceability may be limited by applicable bankruptcy, insolvency, moratorium,
reorganization or other similar laws of general application affecting the rights
of creditors in general.
E.
Neither the execution and delivery hereof, nor the taking of any actions
contemplated hereby, will conflict with or result in a breach of any of the
provisions of, or constitute a default, event of default or event creating a
right of acceleration, termination or cancellation of any obligation under, any
instrument, note, mortgage, contract, judgment, order, award, decree or other
agreement or restriction to which Manager is a party or by which Manager is
otherwise bound.

ARTICLE XIII
ASSIGNMENT

Section 13.1    Assignment. Neither party shall assign or transfer or permit the
assignment or transfer of this Agreement without the prior written consent of
the other; provided, however, Owner shall have the right, without such consent,
to irrevocably and totally assign its interest in this Agreement to any of its
Affiliates. Nothing contained herein shall prevent the transfer of this
Agreement in connection with a merger or consolidation of substantially all of
the assets of Owner and/or of any one or more of its Affiliates or in connection
with any transfer of publicly traded stock or public offering of equity
ownership interests in Property Owner or the Hotel or any upstream parent of
Property Owner. In the event of consent by either party to an assignment of this
Agreement by the other, no further assignment shall be made without the express
consent in writing of such party, unless such assignment may otherwise be made
without such consent pursuant to the terms of this Agreement. An assignment by
either Owner or Manager of its interest in this Agreement shall not relieve
Owner or Manager, as the case may be, from their respective obligations
hereunder unless the assignee accepts full responsibility for performance of the
same. For purposes hereof, a Change of Control (as defined below) of Manager
shall constitute an assignment. “Change of Control” shall mean (a) beneficial
control of more than 25% of the ownership of Manager is transferred from the
current owners to a third party or (b) current beneficial owners of Manager
elect to allow a third party to acquire a controlling equity position through
debt, preferred equity or any other similar arrangement that could result in a
change of operational control of influence. Notwithstanding the foregoing,
Manager may (i) convert to a limited partnership so long as such conversion does
not result in a Change of Control; (ii) the current beneficial owners of Manager
may transfer ownership among themselves or to trusts for the benefit of members
of their family.

ARTICLE XIV
TAXES

Section 14.1    Real Estate and Property Taxes. All real estate and ad valorem
property taxes, assessments and similar charges on or relating to the Hotel
during the term of this Agreement shall be paid by Owner or Property Owner
before any fine, penalty or interest is added thereto or lien placed upon the
Hotel or this Agreement, unless payment thereof is, in good faith, being
contested

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and enforcement thereof is stayed. Manager’s responsibilities specifically
exclude the preparation, filing or contesting of these taxes.

ARTICLE XV
INDEMNIFICATION AND LIMITATION OF LIABILITY

Section 15.1    Indemnification and Limitation of Liability. Except to the
extent covered by insurance, Owner shall hold harmless, indemnify and, subject
to Section 15.3 hereof, defend Manager and its Affiliates and their respective
agents, employees, officers, directors and shareholders from and against all
expenses incurred by Manager or its Affiliates which, in Manager’s judgment,
were or are necessary or desirable for the operation of the Hotel in accordance
with the terms of this Agreement, and all claims (administrative or judicial),
damages, losses and expenses (including, but not limited to, attorneys’ fees for
pre-trial, trial and appellate proceedings, accounting fees, appraisal fees and
consulting and expert witness fees) arising out of or resulting from Manager’s
activities performed pursuant to this Agreement, any franchise agreement, any
past or future building code or life/safety code violations, and injury to
person(s) and damage to property or business by reason of any cause whatsoever
in and about the Hotel or elsewhere, and any requirement or award relating to
course of employment, working conditions, wages and/or compensation of employees
or former employees at the Hotel, unless any such injury or damage is caused by
gross negligence, willful misconduct, fraud, knowing and intentional violation
of applicable laws or intentional breach of this Agreement that continues beyond
any applicable cure period, on the part of Manager; provided that the acts or
omissions of hotel employees (other than Key Personnel) shall not be imputed to
Manager or be deemed to constitute the acts or omissions of Manager.
Notwithstanding the foregoing, without Owner’s prior approval, Manager shall not
settle any employment-related case in which the Owner or Property Owner would be
required to make a settlement payment in excess of $5,000. Any indemnification
shall apply regardless of whether or not said claim, damage, loss or expense is
covered by insurance as herein provided (however, the indemnified party shall
not be entitled to a duplicate recovery with respect to a claim, damage, loss or
expense).

Section 15.2    Manager’s Indemnification. Except to the extent covered by
insurance, Manager shall hold harmless, indemnify and defend Owner and its
Affiliates (including, without limitation, Property Owner), and their respective
agents, employees, officers, directors and shareholders, from and against all
claims, damages, losses and expenses (including, but not limited to, attorneys’
fees for pre-trial, trial and appellate proceedings) payable to third parties
arising out of or resulting from Manager’s gross negligence, willful misconduct,
fraud, knowing and intentional violation of applicable laws or breach of this
Agreement that continues beyond any applicable cure period; provided that acts
or omissions of hotel employees (other than Key Personnel) shall not be imputed
to Manager or be deemed to constitute the acts or omissions of Manager.

Section 15.3 Indemnification Procedure. Upon the occurrence of an event giving
rise to indemnification, the party seeking indemnification shall notify the
other party hereto and provide the other party hereto with copies of any
documents reflecting the claim, damage, loss or expense. Solely to the extent
not inconsistent with applicable insurance policies, the party seeking
indemnification is entitled to engage such attorneys and other persons to defend
against the claim,

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damage, loss or expense, as it may choose subject to reasonable approval of the
party providing indemnification. The party providing indemnification shall pay
the reasonable charges and expenses of such attorneys and other persons on a
current basis within twenty (20) days of submission of invoices or bills.
Owner’s and Manager’s indemnification obligations specifically exclude
responsibility with respect to any claim, lawsuit or action (administrative or
judicial) maintained against Manager, Owner, Property Owner or the Hotel due to
allegations or actions arising prior to the Term, as each party should rely on
its agreement with the prior owner of the Hotel with respect to any such
claims/lawsuits/actions.

Section 15.4    Survival. The provisions of this Article XV shall survive the
termination of this Agreement.

ARTICLE XVI
MISCELLANEOUS

Section 16.1    Severability. In the event that any portion of this Agreement
shall be declared invalid by order, decree or judgment of a court, this
Agreement shall be construed as if such portion had not been inserted herein
except when such construction would operate as an undue hardship to Manager or
Owner, or constitute a substantial deviation from the general intent and purpose
of said parties as reflected in this Agreement.

The failure of either party to insist upon a strict performance of any of the
terms or provisions of this Agreement or to exercise any option, right or remedy
herein contained, shall not be construed as a waiver or as a relinquishment for
the future of such term, provision, option, right or remedy, but the same shall
continue and remain in full force and effect. No waiver by either party of any
term or provision hereof shall be deemed to have been made unless expressed in
writing and signed by such party.

Section 16.2    Agency. The relationship of Owner and Manager shall be that of
principal and agent. Nothing contained in this Agreement shall be construed to
create a partnership or joint venture between them or their successors in
interest. Neither party shall borrow money in the name of, or pledge the credit
of, the other. Manager’s agency established by this Agreement may not be
terminated by Owner except in accordance with the terms hereof. THIS AGREEMENT
IS FOR THE BENEFIT OF, ON THE ONE HAND, OWNER AND PROPERTY OWNER; AND, ON THE
OTHER HAND, MANAGER, AND SHALL NOT CREATE THIRD PARTY BENEFICIARY RIGHTS IN ANY
OTHER PERSON OR ENTITY EXCEPT AS OTHERWISE EXPRESSLY PROVIDED HEREIN.
Section 16.3    Consents. Except as herein otherwise provided, whenever in this
Agreement the consent or approval of Owner or Manager is required, such consent
or approval shall not be unreasonably withheld or delayed. Such consent or
approval shall be in writing only and shall be duly executed by an authorized
officer or agent of the party granting such consent or approval.

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Section 16.4    Applicable Law. This Agreement shall be construed under, and
governed in accordance with, the laws of the state in which the Hotel is
located.

Section 16.5    Successors Bound. This Agreement shall be binding upon and inure
to the benefit of Owner, its successors and assigns, and shall be binding and
inure to the benefit of Manager and its permitted assigns.

Section 16.6    Arbitration. In the event a dispute should arise concerning the
interpretation or application of any of the provisions of this Agreement, the
parties agree the dispute shall be submitted to arbitration of the American
Arbitration Association except as modified by this Section 16.6. The Arbitration
Tribunal shall be formed of three (3) Arbitrators each of which shall have at
least ten (10) years’ experience in hotel operation, management or ownership,
one (1) to be appointed by each party and the third (3rd) to be appointed by the
American Arbitration Association. The arbitration shall take place in Dallas,
Texas and shall be conducted in the English language. The arbitration award
shall be final and binding upon the parties hereto and subject to no appeal, and
shall deal with the question of costs of arbitration and all matters related
thereto. Arbitration expenses shall not be an expense in determining Gross
Operating Profit. Judgment upon the award rendered may be entered into any court
having jurisdiction, or applications may be made to such court for an order of
enforcement.

Section 16.7    Incorporation of Recitals. The recitals set forth in the
preamble of this Agreement are hereby incorporated into this Agreement as if
fully set forth herein.

Section 16.8    Force Majeure. If act of God, acts of war, acts of terrorism,
civil disturbance, labor strikes, governmental action, including the revocation
of any material license or permit necessary for the operation contemplated in
this Agreement where such revocation is not due to Manager’s fault, or any other
causes beyond the control of Manager shall, in Manager’s reasonable opinion,
have a significant adverse effect upon the operations of the Hotel, then Manager
shall be entitled to terminate this Agreement upon sixty (60) days’ written
notice from the date of such event; provided, however, such termination shall
not be effective if the event giving rise to the termination has been cured to
the reasonable satisfaction of Manager within such sixty (60) day period.

Section 16.9    Notices. Notices, statements and other communications to be
given under the terms of this Agreement shall be in writing and delivered by
hand against receipt or sent by certified or registered mail or by Federal
Express or other similar overnight mail service, return receipt requested:

To Owner:

[______________________]
c/o American Realty Capital
405 Park Avenue
New York, NY 10022
Attention: Jonathan Mehlman

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with copy to:

American Realty Capital
405 Park Avenue
New York, NY 10022
Attention: Legal Department
    
To Manager:

American Realty Capital Hospitality Grace Portfolio, LLC
c/o American Realty Capital
405 Park Avenue
New York, NY 10022
Attention: Jonathan Mehlman

with copy to:

American Realty Capital
405 Park Avenue
New York, NY 10022
Attention: Legal Department
    
or at such other address as from time to time designated by the party receiving
the notice.

Section 16.10    Entire Agreement. This Agreement, together with other writings
signed by the parties expressly stated to be supplementing hereto and together
with any instruments to be executed and delivered pursuant to this Agreement,
constitutes the entire agreement between the parties and supersedes all prior
understandings and writings, and may be changed only by a writing signed by the
parties hereto.

Section 16.11    Time. Time is of the essence with respect to this Agreement.

Section 16.12    Attorneys’ Fees. In the event of any litigation arising out of
this Agreement, the prevailing party shall be entitled to reasonable costs and
expenses, including without limitation, attorneys’ fees.

Section 16.13    Complimentary Rooms. Without Owner’s approval, (1)
complimentary rooms provided to the general manager at the Hotel in connection
with relocation shall not exceed sixty (60) days per relocation and (2)
complimentary rooms provided to other manager-level employees at the Hotel in
connection with relocation shall not exceed thirty (30) days per relocation.

Section 16.14    Subordination. This Agreement shall be subordinate to any
mortgage encumbering the Hotel, and Manager agrees to enter into a
lender-manager agreement with respect to the Hotel, which agreement shall
contain reasonable lender-manager provisions, including, without limitation,
Manager’s acknowledgment that its real estate interest in and to the Hotel, if

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any, created by this Agreement is subordinate to any mortgage encumbering the
Hotel, including providing (a) any lender the right to terminate this Agreement
(or to cause the Owner or Property Owner to terminate this Agreement) upon an
event of default under any such mortgage financing and (b) any purchaser of such
Hotel at a foreclosure sale or deed-in-lieu of foreclosure (including the
lender) with the right to terminate this Agreement; provided, however, in no
event will Manager agree to subordinate or waive its right to receive fees,
reimbursements or indemnification payments under this Agreement arising prior to
termination (but (a) if this Agreement is terminated by the lender or such
purchaser, Manager shall not look to the lender for payment of such fees,
reimbursements or indemnification payments and Manager’s right to receive such
fees, reimbursements or indemnification payments shall be subordinated to the
lender’s rights and (b) if this Agreement is not terminated by the lender or
such purchaser, then such fees, reimbursements or indemnification payments shall
be payable by the lender or such purchaser).

Section 16.15 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which taken
together shall constitute one and the same instrument.

Section 16.16    WAIVER OF JURY TRIAL CERTAIN DAMAGES. TO THE EXTENT PERMITTED
BY LAW, EACH OF MANAGER AND OWNER HEREBY KNOWINGLY, VOLUNTARILY, AND
INTENTIONALLY WAIVES THE RIGHT WHICH ANY OF THE UNDERSIGNED MAY HAVE TO A TRIAL
BY JURY AND THE RIGHT TO CLAIM OR RECEIVE CONSEQUENTIAL, INCIDENTAL, SPECIAL, OR
PUNITIVE DAMAGES WITH RESPECT TO ANY LITIGATION BETWEEN THE PARTIES, INCLUDING,
WITHOUT LIMITATION, WITH RESPECT TO ANY AND ALL CAUSE OR CAUSES OF ACTION,
DEFENSES, COUNTERCLAIMS, CROSS-CLAIMS, THIRD PARTY CLAIMS, AND INTERVENOR'S
CLAIMS, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN
CONTRACT, TORT, EQUITY OR OTHERWISE, REGARDLESS OF THE CAUSE OR CAUSES OF
ACTION, DEFENSES OR COUNTERCLAIMS ALLEGED OR THE RELIEF SOUGHT BY ANY PARTY, AND
REGARDLESS OF WHETHER SUCH CAUSES OF ACTION, DEFENSES OR COUNTERCLAIMS ARE BASED
ON, OR ARISE OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ITS SUBJECT
MATTER, OUT OF ANY ALLEGED CONDUCT OR COURSE OF CONDUCT, DEALING OR COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR OTHERWISE. ANY PARTY HERETO
MAY FILE A COPY OF THIS AGREEMENT WITH ANY COURT AS CONCLUSIVE EVIDENCE OF THE
CONSENT OF THE PARTIES HERETO TO THE WAIVER OF ANY RIGHT THEY MAY HAVE TO A
TRIAL BY JURY AND THE RIGHT TO CLAIM OR RECEIVE CONSEQUENTIAL, INCIDENTAL,
SPECIAL OR PUNITIVE DAMAGES.

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IN FURTHER EVIDENCE OF THEIR AGREEMENT TO THIS WAIVER OF JURY TRIAL PROVISION,
MANAGER AND OWNER HAVE INITIALED BELOW:

MANAGER: ______________    OWNER: _____________

Section     16.17 Environmental Matters.

A.    For purposes of this Section 16.17, “hazardous materials” means any
substance or material containing one or more of any of the following: “hazardous
material,” “hazardous waste,” “hazardous substance,” “regulated substance,”
“petroleum,” “pollutant,” “contaminant,” or “asbestos,” as such terms are
defined in any applicable environmental law, in such concentration(s) or
amount(s) as may impose clean-up, removal, monitoring, or other responsibility
under any applicable environmental law, or which may present a significant risk
of harm to guests, invitees, or employees of the Hotel.
B.    Regardless of whether or not a given hazardous material is permitted on
the Hotel premises under applicable environmental law, Manager shall only bring
on the premises such hazardous materials as are needed in the normal course of
business of the Hotel. Manager shall indemnify, defend, and hold harmless Owner,
Property Owner, their respective Affiliates (and the aforementioned entities’
respective directors, officers, shareholders, employees and agents) from and
against all loss, costs, liability, and damage (including, without limitation,
engineers’ and attorneys’ fees and expenses, and the cost of litigation) arising
from the placing, discharge, leakage, use, or storage of hazardous materials in
violation of applicable environmental laws on the Hotel premises or in the Hotel
by Manager during the Term of this Agreement.

Section 16.18     Equity and Debt Offerings. Neither Owner nor Manager (as an
“issuing party”) shall make reference to the other party (the “non-issuing
party”) or any of its Affiliates in any prospectus, private placement
memorandum, offering, offering circular, or offering documentation related
thereto (collectively referred to as the “Prospectus”), issued by the issuing
party, unless the non-issuing party has received a copy of all such references.
In no event will the non-issuing party be deemed a participant or sponsor of the
offering described in any such Prospectus, nor will it have any responsibility
for the issuing party’s obligations in connection with such offering or for the
Prospectus, and the Prospectus shall affirmatively so state. The issuing party
shall not include any proprietary mark or proprietary materials of the
non-issuing party and shall not include a summary of this Agreement without
prior written consent of the non-issuing party. The Prospectus shall further
disclose that the non-issuing party has made no representations, warranties, or
guarantees whatsoever with respect to any of contents of or the materials
contained in the Prospectus or the Prospectus itself. The issuing party shall
only make use of any forecasts, annual plans or projections prepared in the
issuing party’s name (or the names of any of the issuing party’s Affiliates).
The issuing party shall indemnify, defend, and hold harmless the non-issuing

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party and its Affiliates (and their respective directors, officers,
shareholders, employees and agents) from and against all loss, costs, liability,
and damage (including attorneys’ fees and expenses, and the cost of litigation)
arising out of any Prospectus or the offering described therein. Notwithstanding
any of the foregoing, Property Owner, Owner, their Affiliates, AR Capital, LLC,
Realty Capital Securities, LLC, or any lender making a loan secured by the Hotel
(individually and collectively, a “Disclosing Party”) may reference Manager as
the manager of the Hotel in any Prospectus, provided such Disclosing Party shall
not disclose anything other than the name of the Manager (without the use of any
proprietary marks or materials) without the prior written consent of Manager
(not to be unreasonably withheld).

Section 16.19     Confidentiality. Owner and Manager agree that the terms,
conditions, and provisions set forth in this Agreement are strictly
confidential. Further, the parties agree to keep strictly confidential any
information of a proprietary or confidential nature about or belonging to the
other party, or to any Affiliate of such other party, to which such party gains
or has access by virtue of the relationship between the parties. Except as
disclosure may be required to obtain financing for the Hotel, or as may be
required by law or by the order of any government, regulatory authority, or
tribunal or otherwise to comply with any legal requirements (including, as
necessary, to obtain licenses, permits, and other public approvals required for
the operation of the Hotel), each party shall make every effort to ensure that
the information described in this Section 16.19 is not disclosed to any outside
person or entities (including any announcements to the press) without the prior
approval of the other party. It is understood and agreed that this Section 16.19
is not intended to prohibit or limit disclosure of the matters set forth in this
Section 16.19 by Owner or Manager (i) to their respective officers, directors,
employees, financial advisors, attorneys, accountants, potential lenders,
consultants, and representatives on a need-to-know basis, or (ii) as required by
any governmental agency or any federal or state law or regulation, or (iii) as
required pursuant to the rules of any exchange or securities system on which
such party’s (or any of its Affiliates’) shares are traded, or (iv) to the
extent legally compelled by legal process. The obligations of this Section 16.19
shall survive any termination of this Agreement.

    
[Signature page follows]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
by their duly authorized officers.

WITNESS:                    OWNER:

[OWNER], a Delaware limited liability company

By:                        
Name:                        
Title:                        
Date: _______________________________

WITNESS:                    MANAGER:

AMERICAN REALTY CAPITAL HOSPITALITY GRACE PORTFOLIO, LLC,
a Delaware limited liability company

By:                        
Name:                        
Title:                        
Date: _______________________________