Exhibit 10.5

Hilton Garden Inn
Denver, CO

MANAGEMENT AGREEMENT

by and between

STONEBRIDGE REALTY ADVISORS, INC.,
d/b/a STONEBRIDGE COMPANIES

as MANAGER

and

APPLE TEN HOSPITALITY MANAGEMENT, INC.

as OWNER

Dated as of March 4, 2011

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|                                                                 |    |                                                                          |   
|---------------------------------------------------------------- | -- | ------------------------------------------------------------------------ | --
|ARTICLE
 I            APPOINTMENT
 OF MANAGER                    | 1 
|                                                                 |   
|1.01.                                                            |    | Appointment                                                              | 1 
|                                                                 |    |                                                                          |   
|1.02.                                                            |    | Management
 of the Hotel                                                 | 2 
|                                                                 |    |                                                                          |   
|1.03.                                                            |    | Employees                                                                | 3 
|                                                                 |    |                                                                          |   
|1.04.                                                            |    | Owners
 Right to Inspect                                                | 4 
|                                                                 |    |                                                                          |   
|1.05.                                                            |    | Regular
 Meetings                                                        | 4 
|                                                                 |    |                                                                          |   
|1.06.                                                            |    | System
 Standards                                                        | 5 
|                                                                 |    |                                                                          |   
|1.07.                                                            |    | Limitations
 on Managers Authority                                      | 5 
|                                                                 |    |                                                                          |   
|1.08.                                                            |    | Representations
 and Warranties of Manager                               | 5 
|                                                                 |    |                                                                          |   
|1.09.                                                            |    | Limitations
 on Managers Duties                                         | 5 
|                                                                 |    |                                                                          |   
|1.10.                                                            |    | Centralized
 Services                                                    | 6 
|                                                                 |    |                                                                          |   
|ARTICLE
 II            TERM                                      | 6 
|                                                                 |   
|2.01.                                                            |    | Term                                                                     | 6 
|                                                                 |    |                                                                          |   
|2.02.                                                            |    | Performance
 Termination                                                 | 6 
|                                                                 |    |                                                                          |   
|ARTICLE
 III           COMPENSATION
 OF MANAGER                  | 8 
|                                                                 |   
|3.01.                                                            |    | Management
 Fees                                                         | 8 
|                                                                 |    |                                                                          |   
|3.02.                                                            |    | Operating
 Profit                                                        | 8 
|                                                                 |    |                                                                          |   
|3.03.                                                            |    | Accounting
 Fee                                                          | 9 
|                                                                 |    |                                                                          |   
|ARTICLE
 IV           ACCOUNTING,
 BOOKKEEPING AND BANK ACCOUNTS | 10
|                                                                 |   
|4.01.                                                            |    | Accounting,
 Distributions and Annual Reconciliation                     | 10
|                                                                 |    |                                                                          |   
|4.02.                                                            |    | Books and
 Records                                                       | 11
|                                                                 |    |                                                                          |   
|4.03.                                                            |    | Accounts,
 Expenditures                                                  | 11
|                                                                 |    |                                                                          |   
|4.04.                                                            |    | Annual
 Operating Projection                                             | 12
|                                                                 |    |                                                                          |   
|4.05.                                                            |    | Working
 Capital                                                         | 12
|                                                                 |    |                                                                          |   
|4.06.                                                            |    | Fixed Asset
 Supplies                                                    | 13
|                                                                 |    |                                                                          |   
|4.07.                                                            |    | Real Estate
 and Personal Property Taxes                                 | 13
|                                                                 |    |                                                                          |   
|4.08.                                                            |    | Sarbanes-Oxley
 Certification                                            | 14
|                                                                 |    |                                                                          |   
|ARTICLE
 V             REPAIRS,
 MAINTENANCE AND REPLACEMENTS    | 15
|                                                                 |   
|5.01.                                                            |    | Repairs and
 Maintenance to be Paid from Gross Revenues                  | 15
|                                                                 |    |                                                                          |   
|5.02.                                                            |    | Repairs,
 Maintenance and Equipment Replacements to be Paid from Reserve | 15
|                                                                 |    |                                                                          |   
|ARTICLE
 VI            INSURANCE                                 | 17
|                                                                 |   
|6.01.                                                            |    | Property
 Insurance                                                      | 17

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|                                        |    |                                           |   
|--------------------------------------- | -- | ----------------------------------------- | --
|6.02.                                   |    | Operational
 Insurance                    | 17
|                                        |    |                                           |   
|6.03.                                   |    | Coverage;
 Deductibles                    | 18
|                                        |    |                                           |   
|6.04.                                   |    | Costs and
 Expenses                       | 19
|                                        |    |                                           |   
|6.05.                                   |    | Owners
 Right to Provide Insurance       | 19
|                                        |    |                                           |   
|ARTICLE
 VII        DAMAGE AND REPAIR   | 19
|                                        |   
|7.01.                                   |    | Damage and
 Repair                        | 19
|                                        |    |                                           |   
|7.02.                                   |    | Condemnation                              | 20
|                                        |    |                                           |   
|7.03.                                   |    | Subordination
 to Qualified Mortgage      | 21
|                                        |    |                                           |   
|7.04.                                   |    | No
 Covenants, Conditions or Restrictions | 21
|                                        |    |                                           |   
|7.05.                                   |    | Liens;
 Credit                            | 22
|                                        |    |                                           |   
|7.06.                                   |    | Hotel Lease                               | 22
|                                        |    |                                           |   
|ARTICLE
 VIII       DEFAULTS            | 22
|                                        |   
|8.01.                                   |    | Events of
 Default                        | 22
|                                        |    |                                           |   
|8.02.                                   |    | Remedies                                  | 23
|                                        |    |                                           |   
|8.03.                                   |    | Additional
 Remedies                      | 24
|                                        |    |                                           |   
|ARTICLE
 IX         ASSIGNMENT AND SALE | 24
|                                        |   
|9.01.                                   |    | Assignment                                | 24
|                                        |    |                                           |   
|9.02.                                   |    | Sale of the
 Hotel                        | 24
|                                        |    |                                           |   
|ARTICLE
 X           MISCELLANEOUS      | 25
|                                        |   
|10.01.                                  |    | Right to
 Make Agreement                  | 25
|                                        |    |                                           |   
|10.02.                                  |    | Consents and
 Cooperation                 | 25
|                                        |    |                                           |   
|10.03.                                  |    | Relationship                              | 25
|                                        |    |                                           |   
|10.04.                                  |    | Applicable
 Law                           | 26
|                                        |    |                                           |   
|10.05.                                  |    | Recordation                               | 26
|                                        |    |                                           |   
|10.06.                                  |    | Headings                                  | 26
|                                        |    |                                           |   
|10.07.                                  |    | Notices                                   | 26
|                                        |    |                                           |   
|10.08.                                  |    | Environmental
 Matters                    | 27
|                                        |    |                                           |   
|10.09.                                  |    | Confidentiality                           | 28
|                                        |    |                                           |   
|10.10.                                  |    | Indemnification                           | 29
|                                        |    |                                           |   
|10.11.                                  |    | Actions to
 be Taken Upon Termination     | 29
|                                        |    |                                           |   
|10.12.                                  |    | Waiver                                    | 30
|                                        |    |                                           |   
|10.13.                                  |    | Partial
 Invalidity                       | 31
|                                        |    |                                           |   
|10.14.                                  |    | Survival                                  | 31

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|                                             |    |                                                                          |   
|-------------------------------------------- | -- | ------------------------------------------------------------------------ | --
|10.15.                                       |    | Negotiation
 of Agreement                                                | 31
|                                             |    |                                                                          |   
|10.16.                                       |    | Estoppel
 Certificates                                                   | 31
|                                             |    |                                                                          |   
|10.17.                                       |    | Affiliates                                                               | 32
|                                             |    |                                                                          |   
|10.18.                                       |    | Blocked
 Persons or Entities                                             | 32
|                                             |    |                                                                          |   
|10.19.                                       |    | Restrictions
 on Operating the Hotel in Accordance with System Standards | 33
|                                             |    |                                                                          |   
|10.20.                                       |    | Counterparts                                                             | 33
|                                             |    |                                                                          |   
|10.21.                                       |    | Entire
 Agreement                                                        | 33
|                                             |    |                                                                          |   
|10.22.                                       |    | Franchise
 Agreement                                                     | 33
|                                             |    |                                                                          |   
|10.23.                                       |    | Operation of
 Other Hotels                                               | 34
|                                             |    |                                                                          |   
|10.24.                                       |    | Expert
 Decisions                                                        | 34
|                                             |    |                                                                          |   
|10.25.                                       |    | Waiver of
 Jury Trial and Punitive Damages                               | 35
|                                             |    |                                                                          |   
|ARTICLE
 XI              DEFINITION OF TERMS | 35
|                                             |   
|11.01.                                       |    | Definition
 of Terms                                                     | 35
|                                             |    |                                                                          |   
|Schedule 1                                   |    | -          Hotel
 Specific Data                                         
|Exhibit A                                    |    | -          Legal
 Description of Site                                   
|Exhibit B                                    |    | -          Representations
 and Warranties                              

iii

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MANAGEMENT AGREEMENT

THIS MANAGEMENT AGREEMENT (Agreement)
is executed as of the 4th day of March, 2011 (Effective Date), by APPLE TEN
HOSPITALTY MANAGEMENT, INC., a Virginia corporation, (Owner), with a mailing address at c/o
Apple REIT Companies, 1814 East Main Street, Richmond, Virginia 23219,
Attention: Krissy Gathright, and STONEBRIDGE REALTY ADVISORS, INC., a Colorado
corporation, d/b/a STONEBRIDGE COMPANIES (Manager),
with a mailing address at c/o Stonebridge Companies, 9100 East Panorama Drive,
Suite 300, Englewood, Colorado 80112, Attention: Navin C. Dimond.

RECITALS:

A.
Apple Ten Hospitality Ownership, Inc., a Virginia corporation (Landlord), is the owner of that
certain hotel consisting of the Buildings located on the Site. The Site and the
Buildings, in addition to certain other rights, improvements, and personal
property as more particularly described in the definition of Hotel in Section 11.01 hereof, are
collectively referred to as the Hotel.

B.
Landlord and Owner have entered into that certain Hotel Lease Agreement dated
as of the Effective Date (the Hotel Lease)
pursuant to which Landlord leases the Hotel to Owner. Concurrently with the
execution of this Agreement, Landlord, Owner and Manager have entered into a
recognition agreement, pursuant to which Landlord has agreed to recognize
Manager as the operator of the Hotel and assume the remaining obligations of
Owner under this Agreement or cause Manager to be so recognized and such
remaining obligations to be assumed by a successor tenant, if the Hotel Lease
terminates prior to the end of the term of this Agreement, as it may be
extended.

C.
All capitalized terms used in this Agreement shall have the meaning set forth
in Section 11.01 hereof.

D.
Owner desires to engage Manager to manage and operate the Hotel, and Manager
desires to accept such engagement, upon the terms and conditions set forth in
this Agreement.

NOW,
THEREFORE, in consideration of the mutual covenants contained in this Agreement
and other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Owner and Manager agree as follows:

ARTICLE I
APPOINTMENT OF MANAGER

1.01.
Appointment.

Owner
hereby appoints and employs Manager as Owners exclusive independent contractor
to supervise, direct and control the management and operation of the Hotel
throughout the Term. Manager accepts said appointment and agrees to manage the
Hotel during the Term in accordance with the terms and conditions of this Agreement.

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1.02.
Management of the Hotel.

A.
Manager shall manage the Hotel, including, without limitation, performance of
the following functions, in accordance with Prudent Industry Practices, the
provisions of this Agreement and all standards imposed by the Franchise
Agreement (provided that in all cases, except as otherwise specifically set
forth in this Agreement, the costs and expenses of performing such functions
shall be Deductions):

1.
Recruit, employ, supervise, direct and discharge the employees at the Hotel and
maintain adequate staff, consistent with Prudent Industry Practices, to carry
out its duties under this Agreement, which employees may be employed by an
Affiliate of Manager as provided in Section 1.03.

2.
Establish prices, rates and charges for services provided in the Hotel,
including Guest Room rates.

3.
Establish and revise, as necessary and in accordance with Prudent Industry
Practices, administrative policies and procedures, including policies and
procedure for the control of revenue and expenditures, for the purchasing of
supplies and services, for the control of credit and for the scheduling of
maintenance, and verify that the foregoing procedures are operating in a sound
manner.

4.
Make payments on accounts payable and collect accounts receivable.

5.
Procure (for Owner) all Inventories and replace Fixed Asset Supplies.

6.
Prepare and deliver interim accountings, annual accountings, Annual Operating
Statements, Building Estimates, Repairs and Equipment Estimates and such other
information as is required by this Agreement.

7.
Plan, execute and supervise repairs and maintenance at the Hotel.

8.
Obtain the insurance required to be obtained by Manager pursuant to Article VI
of this Agreement and provide or cause to be provided all risk management
services related thereto, subject to the provisions of Section 6.05.

9.
Obtain and keep in full force and effect, either in its own name or in Owners
or Owners affiliates name, as may be required by applicable law, any and all
licenses (including, without limitation, liquor licenses which shall be
maintained in the name of Manager to the extent permitted by law) and permits
to the extent same is within the control of Manager (or, if same is not within
the control of Manager, Manager shall use reasonable efforts to obtain and keep
same in full force and effect).

10.
Subject to the terms of this Agreement, execute subordination agreements,
estoppel certificates and other documentation required by any purchaser or
mortgagee and reasonably cooperate (provided that Manager shall not be
obligated to enter into

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any amendments
of this Agreement) with Owner or Landlord in any attempt(s) by Owner or
Landlord to effectuate a Sale of the Hotel or to obtain a Qualified Mortgage.

11.
Arrange for and supervise public relations and advertising and prepare
marketing plans.

12.
Manage and operate the Hotel at all times in compliance with the Franchise
Agreement, including (without limitation) the Manual and the System standards
(as such terms are defined therein).

B.
The operation of the Hotel shall be under the exclusive supervision and control
of Manager, except as otherwise specifically provided in this Agreement, and
Manager shall be responsible for the proper and efficient operation of the
Hotel. In fulfilling its obligations under this Agreement, Manager will act as
a reasonable, prudent operator of the Hotel, having regard for the status of
the Hotel, operating the Hotel in accordance with Prudent Industry Practices
and at all times maintaining and complying with all standards imposed by the
Franchise Agreement, and subject to the foregoing and all other terms and
conditions of this Agreement, shall have discretion in the following: charges,
terms and conditions for Guest Rooms and commercial space; credit policies and
services provided by the Hotel; food and beverage services; employment
policies; granting of leases, subleases, licenses and concessions for shops and
businesses within the Hotel, provided that the term of any such lease,
sublease, license or concession shall not exceed the lesser of one (1) year or
the Term without the prior written approval of Owner; receipt, holding and
disbursement of funds; maintenance of bank accounts; procurement of
Inventories, supplies and services; promotion and publicity; payment of costs
and expenses as are specifically provided for in this Agreement or are otherwise
reasonably necessary for the proper and efficient operation of the Hotel; and,
generally, all activities necessary for operation of the Hotel. With respect to
all Material Management Decisions, Manager shall consult with Owner in advance
of making any such decisions. The term Material
Management Decisions means a decision to be made in connection
with any expenditure of more than $10,000 in each instance, or aggregate
expenditures in any Fiscal Year of five percent (5%) or more of the total
annual expenses provided for in the approved Annual Operating Projection for
such Fiscal Year, if such expenditure is not included in the approved Annual
Operating Projection for such Fiscal Year or if such expenditure would result
in an increase in the overall Annual Operating Projection approved by Owner,
unless such expenditure is made to address an emergency situation.

C.
Manager shall comply with and abide by all applicable Legal Requirements
pertaining to its operation of the Hotel. Any of Landlord, Owner or Manager
shall have the right, but not the obligation, in its reasonable discretion, to
contest or oppose, by appropriate proceedings, any such Legal Requirements. The
reasonable expenses of any such contest of a Legal Requirement shall be Deductions
and shall be paid from Gross Revenues or from other funds in the Operating
Accounts.

1.03.
Employees

All
personnel employed at the Hotel shall at all times be the employees of Manager
(or, after disclosure to Owner, one of its Affiliates) and not the employees of
Owner. Manager shall

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have
reasonable discretion with respect to all personnel employed at the Hotel,
including, without limitation, decisions regarding hiring, promoting,
transferring, compensating, supervising, terminating, directing and training
all employees at the Hotel, and, generally, establishing and maintaining all
policies relating to employment; provided, however, that (i) Owner shall have
the right to approve the hiring of the persons who occupy the position of
General Manager for the Hotel in accordance with the procedures set forth below
and (ii) except as otherwise required by applicable Legal Requirements, Manager
shall not negotiate or enter into any collective bargaining or other labor
agreement with employees or with any organization representing or claiming to
represent employees without Owners prior consent. No person shall be given
gratuitous accommodations or services without prior joint approval of Owner and
Manager except in accordance with policies agreed upon by Owner and Manager and
except corporate personnel of Manager at the Hotel on a temporary basis for
Hotel business (such as the meetings described in Section 1.05). Manager shall
reimburse Owner for the costs (including relocation costs) of hiring and
training General Managers who are employed at the Hotel for six (6) months or
less and are transferred or relocated (other than to another hotel managed by
Manager for Owner or any of Owners Affiliates), and for such costs on a
pro-rated basis (over twelve (12) months) for General Managers employed at the
Hotel for more than six (6) months but less than twelve (12) months (other than
those transferred or relocated to another hotel managed by Manager for Owner or
any of Owners Affiliates), and Manager shall promptly reimburse Owner for any
such costs that are payable by Manager, which amounts shall be Managers
Liabilities.

The
procedures for selection of the General Manager shall be as follows: Manager
shall provide Owner with the resume of the candidate for General Manager who is
qualified for such position in Managers reasonable judgment. Owner shall
notify Manager in writing of its approval or disapproval of such candidate
within five (5) Business Days after Owners receipt of the candidates resume,
Owners approval not to be unreasonably withheld. If Owner approves the
candidate or fails to notify Manager in writing of Owners approval or
disapproval of the candidate presented by Manager, Manager may appoint such
candidate to the position of General Manager. If Owner disapproves any
candidate presented by Manager, Manager shall not appoint such candidate as
General Manager.

1.04.
Owners Right to Inspect.

Owner,
its representatives, employees, agents, Affiliates and Mortgagees shall have
access to the Hotel at any and all reasonable times for the purpose of
inspection, exercising any of its rights under this Agreement or showing the
Hotel to prospective purchasers, tenants or Mortgagees, provided that the
operation of the Hotel is not unreasonably interfered with, and at any time in
case of an emergency.

1.05.
Regular Meetings.

At
Owners request, Owner and Manager shall have meetings at the Hotel and at
mutually convenient times no more frequently than once a quarter. Manager shall
be represented at such meetings by the General Manager of the Hotel and such
other personnel as the General Manager and Owner may deem appropriate. The
travel costs and expenses for such other personnel to attend the meetings shall
be paid from the Operating Accounts as Deductions. The purpose of

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the meetings
shall be, inter alia, to discuss the performance of the Hotel and
other related issues, including any variations from the approved Annual
Operating Projection for the preceding quarter.

1.06.
System Standards

Subject
to the availability of adequate funds, Manager shall take such actions
consistent with this Agreement as are necessary for the Hotel to comply with
the System Standards, and Manager shall operate the Hotel so that the Hotel
will at all times comply with System Standards.

1.07.
Limitations on Managers Authority

Unless
provided for in the approved Annual Operating Projection, Manager shall not,
without Owners prior written approval, enter into any FF&E Lease if (i)
the fair market value of the FF&E subject to such FF&E Lease at the
time of entering into such FF&E Lease exceeds Thirty-Five Thousand Dollars
($35,000); (ii) the fair market value of the FF&E subject to all FF&E
Leases at the time of entering into such FF&E Lease exceeds Sixty Thousand
Dollars ($60,000) in the aggregate; (iii) the FF&E subject to such FF&E
Lease is FF&E that is not, consistent with Prudent Industry Practices,
customarily leased; (iv) such FF&E Lease is with an Affiliate of Manager or
is on payment terms (including the amounts and schedule of payments) that would
be materially more favorable to the lessor thereof than payment terms customary
under Prudent Industry Practices for leases of similar FF&E; or (v) such
FF&E Lease is not terminable by Owner upon thirty (30) days notice if such
FF&E Lease is more than one (1) year in duration.

1.08.
Representations and Warranties of Manager.

Manager
hereby makes the representations and warranties to Owner set forth in Exhibit B
attached hereto and made a part hereof by this reference.

1.09.
Limitations on Managers Duties

A.
Managers duties under this Agreement are subject to the availability of
sufficient funds from the operation of the Hotel or which are otherwise
provided by Owner. Except as otherwise expressly provided in this Agreement,
all costs and expenses of operating, maintaining, marketing and improving the
Hotel shall be payable out of funds from the operation of the Hotel or which
are otherwise provided by Owner. In no event shall Manager be obligated to
advance any of its own funds to pay any such costs or expenses for the Hotel
except as expressly provided in this Agreement. Anything in this Agreement to
the contrary notwithstanding, Manager shall be excused from its obligations to
operate the Hotel in conformity with its obligations hereunder to the extent
and whenever Manager shall be prevented from compliance with such standard by
reason of the occurrence of a Force Majeure.

B.
In connection with any insurance coverages required or obtained under this
Agreement, neither Manager nor any insurance broker Manager or its Affiliates
may retain makes any warranty or representation regarding the advisability,
nature, or extent of the insurance coverages provided by Manager for the
benefit of Owner or any other coverages that

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Owner should
consider for the protection of Owner, the Hotel and its operations. Owner
agrees to rely exclusively on its own insurance advisors with respect to all
insurance matters.

C.
Any and all financial projections and budgets prepared by Manager under this
Agreement, including the Annual Operating Projection, are intended to assist in
operating the Hotel, but are not to be relied on by Owner or any third party as
to the accuracy of the information contained therein or the results predicted.
Manager does not guarantee the accuracy of the information contained in such
projections and budgets, nor does it guarantee the results of such projections
and budgets, and Owner acknowledges that Manager shall not be held responsible
by Owner or any third party for any divergence between such projections and
budgets and actual operating results achieved. If Owner provides any such
financial projections or budgets to a third party, Owner shall be obligated to
advise such third party in writing of the substance of this disclaimer.

1.10.
Centralized Services.

Manager
may provide to the Hotel the following services that are furnished generally on
a central or system-wide basis to other hotels operated by Manager or its
Affiliates: Director of Engineering and Maintenance, Revenue/Channel Manager,
Risk Manager, Group/Tour Sales Department, MIS Support Services and joint
advertising and marketing. The salaries, wages, development costs and overhead
related to the employees of Manager providing such centralized services shall
be allocated on a fair basis among all hotels receiving such services based
upon the extent to which such services benefit the Hotel. Manager shall provide
to Owner for Owners approval as a part of the Annual Operating Projection
pursuant to Section 4.04 the projected costs of such centralized services.

ARTICLE II
TERM

2.01.
Term.

The
Term of this Agreement
shall begin on the Effective Date and shall continue until the expiration of
the tenth anniversary of the date hereof. The Term of this Agreement may be
extended only upon mutual agreement of Manager and Owner, each in the exercise
of its sole and absolute discretion, on all the same terms (other than term) as
set forth in this Agreement for two (2) consecutive periods, each such
extension term being for periods of five (5) years each. In the event the
parties do not reach an agreement to so extend, this Agreement shall terminate
as provided in the first sentence of this Section.

2.02.
Performance Termination.

A.
Owner shall have the option to terminate this Agreement if during any of the
first five (5) Fiscal Years both of the following occur:

1.
Operating Profit for (i) the second Fiscal Year is insufficient to pay to Owner
at least $4,680,000 in Owners Priority for such Fiscal Year or (ii) the third
Fiscal Year is insufficient to pay to Owner at least $5,265,000 in Owners
Priority for such Fiscal Year, or

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(iii) in each
of the fourth or fifth Fiscal Year is insufficient to pay to Owner at least
$5,850,000 in Owners Priority for such Fiscal Year; and

2.
The Revenue Index of the Hotel for such Fiscal Year is less than the Revenue
Index Threshold.

B.
Owner shall have the option to terminate this Agreement if during the sixth (6th)
Fiscal Year or any Fiscal Year thereafter any of the following occur:

1.
Operating Profit for any such Fiscal Year is insufficient to pay to Owner the
full amount of Owners Priority for such Fiscal Year; or

2.
The Revenue Index of the Hotel for such Fiscal Year is less than the Revenue
Index Threshold.

C.
For purposes of determining whether Owner has the option to terminate this
Agreement under Subsection A or Subsection B of this Section 2.02, to the
extent the operating results of the Hotel were materially and quantifiably
affected by Force Majeure affecting the Hotel or by major renovations of the
Hotel, the Operating Profit or Revenue Index, as applicable, shall be equitably
adjusted to amounts reasonably projected absent such Force Majeure or major
renovations, such adjustments to be substantiated by such evidence and
reasonably detailed calculations provided by Manager to Owner as are reasonably
acceptable to Owner. Owner shall exercise its option to terminate pursuant to
Subsection A or B of this Section 2.02 based upon the Operating Profit and/or
Revenue Index, as applicable, for a Fiscal Year by serving written notice
thereof on Manager no later than sixty (60) days after Owners receipt of the
Annual Operating Statement under Section 4.01.A for such Fiscal Year, and this
Agreement shall terminate as of the end of the second (2nd) full
Accounting Period following the date on which Manager receives the
above-described notice from Owner.

D.
Owners failure to exercise its right to terminate this Agreement pursuant to
this Section 2.02 shall not be deemed an estoppel or waiver of Owners right to
terminate this Agreement with respect to any subsequent event or circumstance
that could give Owner the right to terminate hereunder.

E.
Upon receipt of Owners written notice of termination under Section 2.02A or B,
above, if Operating Profit is less than five percent (5%) below the full amount
of Owners Priority for the applicable Fiscal Year, Manager shall have the
option, to be exercised within ten (10) days after receipt of the notice, to
avoid the termination by electing (in a notice to Owner) to pay Owner the
amount (the Cure Payment)
by which Owners Priority exceeded Operating Profit for the Fiscal Year in
which the performance test was failed. Except as expressly provided in the
preceding sentence of this Section 2.02E, Manager shall not have any right to
avoid termination without the prior written consent of Owner.

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ARTICLE III
COMPENSATION OF MANAGER

3.01.
Management Fees.

In
consideration of services to be performed during the Term, Manager shall be
paid the sum of the following as its management fees:

A.
the Base Management Fee, which shall be retained by Manager from Gross
Revenues; plus

B.
the Incentive Management Fee but only to the extent of available Operating
Profit after payment of Owners Priority (including, without limitation, all
accrued and unpaid Owners Priority) as provided in Section 3.02 below.

3.02.
Operating Profit.

A.
Operating Profit, to the extent available, shall be distributed to Owner and to
Manager in the following order of priority, except as otherwise provided in
this Agreement:

1.
Any accrued but unpaid Base Management Fee payable in respect of any prior
Accounting Period shall be paid to Manager;

2.
An amount up to the maximum amount of Owners Priority shall be paid to Owner;

3.
The Incentive Management Fee shall be paid to Manager; and

4.
Any remaining balance of Operating Profit shall be paid to Owner.

Owners
Priority shall not be cumulative from one Fiscal Year to the next, and to the
extent the maximum amount of Owners Priority is unpaid in any Fiscal Year,
such unpaid amount shall not accrue or be payable in any subsequent Fiscal
Year. The Incentive Management Fee for each Fiscal Year will be payable to
Manager, in quarterly installments at the end of each calendar quarter, based
upon the projected Incentive Management Fee provided for in the approved Annual
Operating Projection for such Fiscal Year, calculated and adjusted quarterly
using actual operating results to date for such Fiscal Year and projected
Operating Profit for the remainder of such Fiscal Year as provided for in the
approved Annual Operating Projection. Notwithstanding anything in this
Agreement to the contrary, Manager acknowledges and agrees that (i) Base
Management Fees are payable monthly within thirty (30) days after the end of
each Accounting Period during the Term; (ii) estimated and unpaid Incentive Management
Fees for the remainder of any Fiscal Year shall be adjusted at the end of each
calendar quarter in such Fiscal Year based upon the actual operating results to
date for such Fiscal Year, with all final adjustments to be made (and payment
made to Owner or Manager, as applicable, any amount payable by Manager to a
Managers Liability) annually within thirty (30) days after Owners receipt and
acceptance of the Annual Operating Statement; (iii) Incentive Management Fees
are payable only to the extent of available Operating Profit after payment in

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full of
Owners Priority; and (iv) in no event shall Incentive Management Fees accrue
or be deemed to accrue.

B.
To the extent of available Operating Profit with respect to each Accounting Period,
Manager shall distribute a prorated portion of the Owners Priority (including
any accrued and unpaid Owners Priority) to Owner for each such Accounting
Period in accordance with Section 4.01.

C.
During any period of discontinued or reduced operations of the Hotel or any
part thereof as a result of damage, destruction or condemnation that does not
result in a termination of this Agreement and during repair or restoration
thereafter, Owner shall pay to Manager for each Accounting Period, in lieu of
any Base Management Fee and/or Incentive Management Fee that might otherwise be
payable under this Agreement, an amount equal to the higher of (a) the Base
Management Fee for such Accounting Period that would be payable pursuant to Section
3.01A treating business interruption insurance proceeds and/or condemnation
proceeds as Gross Revenues or (b) the Base Management Fee and Incentive
Management Fee (if any) for such Accounting Period that would have been payable
if the Hotel had achieved the projected operating results set forth in the
approved Annual Operating Projection. Notwithstanding the foregoing, in no
event will any Base Management Fees, Incentive Management Fees or management
fees in lieu thereof accrue or be payable by Owner to Manager in excess of the
amount included as management fees in any business interruption proceeds
received by Owner in respect of such Accounting Period.

3.03.
Accounting Fee.

Manager
will perform certain data processing and accounting functions for the Hotel at
Managers headquarters or central office using personnel that are not employed
at the Hotel. In consideration of Managers performance of these data
processing and accounting functions for the benefit of the Hotel, Owner will pay
to Manager on a monthly basis the Accounting Fee, which Accounting Fee shall be
prorated for any partial month and may be withheld by Manager from Gross
Revenues.

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ARTICLE IV
ACCOUNTING, BOOKKEEPING AND BANK ACCOUNTS

4.01.
Accounting, Distributions and Annual Reconciliation.

A.
Within fifteen (15) days after the close of each Accounting Period, Manager
shall deliver an interim accounting (the Accounting
Period Statement) to Owner, prepared in accordance with the
Uniform System of Accounts, showing Gross Revenues, Deductions, Operating
Profit and applications and distributions thereof for the preceding Accounting
Period and any other information reasonably requested by Owner. Manager shall
transfer to Owner, with each Accounting Period Statement, any interim amounts
due Owner, subject to Working Capital needs reasonably proposed by Manager and
approved by Owner, such approval not to be unreasonably withheld, and shall
retain any interim amounts payable to Manager pursuant to the terms of this
Agreement.

B.
Calculations and payments of the Incentive Management Fee, the Base Management
Fee and distributions of Operating Profit made with respect to each Accounting
Period shall be accounted for cumulatively within a Fiscal Year, but shall not
be cumulative from one Fiscal Year to the next. Within the SEC Filing Period,
Manager shall deliver to Owner a statement (the Annual Operating Statement) in reasonable detail
summarizing the operations of the Hotel for the immediately preceding Fiscal
Year and a certificate of Managers chief accounting officer certifying that,
to the best of his or her knowledge, such Annual Operating Statement is true
and correct. The parties shall, within five (5) Business Days after Owners
receipt of such Annual Operating Statement, make any adjustments, by cash
payment, in the amounts paid or retained for such Fiscal Year as are needed
because of the final figures set forth in such Annual Operating Statement. Such
Annual Operating Statement shall be controlling over the preceding Accounting
Period Statements.

C.
To the extent there is an Operating Loss for any Accounting Period, no Base
Management Fee shall be paid to or retained from Gross Revenues by Manager. Any
Base Management Fee that would have been payable to Manager had there been an
Operating Profit for such Accounting Period shall accrue (but not beyond the
Term of this Agreement) and shall be payable to Manager as provided in Article
III to the extent of Operating Profit in subsequent Accounting Periods.

To
the extent there is an Operating Loss for any Accounting Period, additional
funds in the amount of any such Operating Loss (other than the amount of any
Base Management Fee) shall be provided by Owner within thirty (30) days after
Manager has delivered written notice thereof to Owner. If Owner does not fund
such Operating Loss within the thirty (30) day time period, Manager shall have
the right after prior written notice to Owner (without affecting Managers
other remedies under this Agreement) to withdraw an amount equal to such
Operating Loss from future distributions of funds otherwise due to Owner. In
the event an Operating Loss occurs for each of six (6) consecutive Accounting
Periods during any Fiscal Year, Owner may elect to terminate this Agreement,
provided that, in determining whether Owner has the option to terminate this
Agreement pursuant to this sentence, to the extent the operating results of the
Hotel were materially and quantifiably affected by Force Majeure affecting the
Hotel or by major renovations to the Hotel, such operating results shall be
equitably adjusted to amounts reasonably

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projected
absent such Force Majeure or major renovations, such adjustments to be substantiated
by such evidence and reasonably detailed calculations provided by Manager to
Owner as are reasonably acceptable to Owner.

4.02.
Books and Records.

Books
of control and account pertaining to operations at the Hotel shall be kept on
the accrual basis and in all material respects in accordance with the Uniform
System of Accounts. Owner may at reasonable intervals during Managers normal
business hours examine such records. If Owner desires (at its own expense,
except as provided below) to audit, examine or review the Annual Operating
Statement, Owner shall notify Manager in writing within sixty (60) days after
receipt of such Annual Operating Statement of its intention to audit and begin
such audit no sooner than ten (10) days after Managers receipt of such notice
and not later than sixty (60) days after Managers receipt of such notice.
Owner shall use reasonable efforts to complete such audit within one hundred
twenty (120) days after commencement thereof. If Owner does not make such an
audit, then such Annual Operating Statement shall be deemed to be conclusively
accepted by Owner as being correct, except in the event of manifest error or
fraud, misrepresentation, misconduct or negligence by Manager or its agents,
employees, representatives or contractors or other third parties. If any audit
by Owner discloses an understatement of any amounts due Owner, Manager shall
promptly pay Owner such amounts found to be due, plus interest thereon at the
Prime Rate plus one percent (1%) per annum from the date such amounts should
originally have been paid. If any audit discloses that Manager has not received
any amounts due it, Owner shall pay Manager such amounts, plus interest thereon
at the Prime Rate plus one percent (1%) per annum from the date such amounts
should originally have been paid. The cost of the audit shall be paid by Owner;
provided, however, Manager shall pay for such cost if such audit discloses an
underpayment to Owner for the Fiscal Year so audited of five percent (5%) or more
of the amount that should have been paid to Owner for such Fiscal Year. In
addition, if the Franchise Agreement requires Owner to pay interest and/or the
cost of an audit to the franchisor on account of an understatement in reports
provided by Manager, Manager shall pay such interest and costs in accordance
with the Franchise Agreement without (either directly or indirectly) passing
such charges on to Owner.

4.03.
Accounts, Expenditures.

A.
All funds derived from operation of the Hotel shall be deposited by Manager in
Owners bank accounts (the Operating
Accounts) established by Manager in a bank or banks designated
by Manager with the concurrence of Owner. Withdrawals by Manager from said
Operating Accounts shall be made solely by representatives of Manager, but only
those representatives whose signatures have been authorized by Manager with the
concurrence of Owner. Reasonable petty cash funds shall be maintained at the
Hotel.

B.
Except as otherwise provided in this Agreement, all payments made by Manager
hereunder shall be made from the Operating Accounts, petty cash funds, or from
the Reserve (in accordance with Section 5.02). Manager shall not be required to
make any advance or payment with respect to the Hotel except out of such funds,
and Manager shall not be obligated to incur any liability or obligation with
respect to the Hotel except as otherwise

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provided in
this Agreement (including, without limitation, pursuant to Sections 1.03,
3.02A, 3.03 and 10.10A) (each, Managers
Liability, and, collectively, Managers Liabilities).

C.
Debts and liabilities (other than Managers Liabilities) incurred by Manager as
a result of its operation and management of the Hotel pursuant to the terms
hereof, whether asserted before or after Termination, will be paid by Owner to
the extent funds are not available for that purpose from Gross Revenues.
Manager shall pay all of Managers Liabilities. The provisions of this Section
4.03C shall survive Termination.

4.04.
Annual Operating Projection.

Manager
shall deliver to Owner for its review, at least thirty (30) days prior to the
beginning of each Fiscal Year after the first Fiscal Year following the
Effective Date, a preliminary draft of the business plan (including a proposed
budget) and a projection of the estimated Gross Revenues, departmental profits,
Deductions, and Operating Profit for the forthcoming Fiscal Year for the Hotel
(the Annual Operating Projection)
for approval by Owner. Manager will consider in good faith suggestions made by
Owner with respect to the Annual Operating Projection and make modifications
thereto that are agreed upon by Owner and Manager. In the case of the Fiscal
Year beginning on the Effective Date, Manager and Owner have already agreed
upon the Annual Operating Projection for such Fiscal Year. Notwithstanding the
foregoing, Owner shall not be entitled to withhold its approval of the Annual
Operating Projection based solely on its objection to: (i) Managers reasonable
projections of either Gross Revenues or the components thereof, (ii)
Impositions, utility charges and similar charges determined by governmental
authorities or providers whose rates cannot be controlled or negotiated by Manager,
or (iii) increases in projected costs and expenses of operating the Hotel
caused by projected increases in occupancy or use of Hotel facilities that are
projected to increase Gross Revenues. Upon approval of the Annual Operating
Projection by Owner and Manager, Manager in good faith shall use best efforts
to adhere to such Annual Operating Projection. In the event Owner and Manager
(each acting reasonably and in good faith in considering projections for
operation of the Hotel pursuant to Prudent Industry Practice, the Franchise
Agreement, any Qualified Mortgage affecting the Hotel and this Agreement) are
unable to agree upon the Annual Operating Projection by the commencement of the
Fiscal Year to which it relates, Owner or Manager may elect to terminate this
Agreement by serving written notice to the other party, and this Agreement
shall terminate as of the end of the second (2nd) full Accounting
Period following the date on which such party receives such notice of
termination. Any such notice of termination shall be given not later than
thirty (30) days after the end of the then-current Fiscal Year, provided that
Owner shall have received the proposed Annual Operating Projection from Manager
at least thirty (30) days prior to the end of the then-current Fiscal Year.
Pending such termination, Manager shall operate the Hotel with respect to those
categories that are in dispute based on the previous Fiscal Years approved
Annual Operating Projection.

4.05.
Working Capital.

The
parties recognize that, as of the Effective Date, the level of Working Capital
funds, which shall be held in the Operating Accounts, is reasonably believed to
be reasonably sufficient for the operations of the Hotel, subject at all times
to seasonal differences and changes in

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circumstances
after the Effective Date. To the extent the expenditure of additional Working
Capital funds has been reasonably proposed by Manager and approved by Owner,
such approval not to be unreasonably withheld, Owner shall from time to time
during the Term advance any such additional funds which Manager shall use to
satisfy such needs of the Hotel as have been reasonably proposed by Manager and
approved by Owner. If Owner does not so fund additional Working Capital as
approved by Owner within thirty (30) days after receipt by Owner of a written
request therefor from Manager, Manager shall have the right (without affecting
Managers other remedies under this Agreement) to withdraw, after prior written
notice to Owner, from future distributions of funds otherwise due to Owner an
amount equal to the funds agreed upon by Owner and Manager for additional
Working Capital. All funds so advanced for Working Capital shall be utilized by
Manager for the purposes of this Agreement. In the event Owner and Manager are
unable to agree upon the need for and/or amount of additional Working Capital
within thirty (30) days after Owners receipt of a written notice from Manager
of the need for additional funds for Working Capital, Owner shall have no obligation
to fund additional Working Capital and Manager may elect to terminate this
Agreement. Upon Termination, Manager shall immediately return the outstanding
balance of the Working Capital to Owner.

4.06.
Fixed Asset Supplies.

The
parties further recognize that, as of the Effective Date, the level of funds
for Fixed Asset Supplies is reasonably believed to be reasonably sufficient for
the operations of the Hotel, subject at all times to seasonal differences and
changes in circumstances after the Effective Date. Any additional funds which
are necessary to maintain Fixed Asset Supplies at levels reasonably proposed by
Manager and approved by Owner, such approval not to be unreasonably withheld,
as being necessary to satisfy the needs of the Hotel, shall be paid from
available Gross Revenues or, at Owners election, funded by Owner within thirty
(30) days after Owners approval of such additional funds and, in each case,
shall be Deductions. Fixed Asset Supplies shall remain the property of Owner
throughout the term of this Agreement and upon Termination.

4.07.
Real Estate and Personal Property Taxes.

A.
Except as specifically set forth in Section 4.07.B below, all real estate and
personal property taxes, levies, assessments (including special assessments
(regardless of when due or whether they are paid as a lump sum or in
installments over time) imposed because of facilities that are constructed by
or on behalf of the assessing jurisdiction (for example, roads, sidewalks,
sewers, culverts, etc.) which directly benefit the Hotel (regardless of whether
or not they also benefit other buildings)), Impact Fees (regardless of when
due or whether they are paid as a lump sum or in installments over time) which
are required of Owner as a condition to the issuance of zoning variances or
building permits, and similar charges on or relating to the Hotel
(collectively, Impositions)
during the Term shall be paid by Manager from Gross Revenues, before any fine,
penalty, or interest is added thereto or lien placed upon the Hotel or upon
this Agreement, unless payment thereof is in good faith being contested and
enforcement thereof is stayed. Any such payments shall be Deductions in
determining Operating Profit. Owner shall, within five (5) days after receipt,
furnish Manager with copies of official tax bills and assessments which it may
receive with respect to the Hotel. Either Landlord, Owner or Manager with the
concurrence of Owner (in which case Owner agrees to sign, and cause Landlord to
sign, the required applications and otherwise reasonably cooperate with Manager
in

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expediting the
matter) may, and at Owners request Manager shall, initiate proceedings to
contest any negotiations or proceedings with respect to any Imposition, and all
reasonable costs of any such contest shall be paid from Gross Revenues and
shall be a Deduction in determining Operating Profit. Manager shall, as part of
its contest or negotiation of any Imposition, be entitled, on Owners and
Landlords behalf, to waive any applicable statute of limitations in order to
avoid paying the Imposition during the pendency of any proceedings or
negotiations with applicable authorities. Notwithstanding anything contained
herein to the contrary, at Owners option (i) Manager shall establish an escrow
account in the name of Owner in a bank or banks designated by Manager with the
concurrence of Owner and shall deposit monthly into such account from Gross
Revenues an amount that Manager reasonably estimates shall be sufficient to pay
the Impositions, in which case Manager shall pay the Impositions from funds in
the escrow account as and when the Impositions become due (and Owner shall
promptly deposit into the escrow account any deficiency if the estimated
monthly payments are not sufficient to pay all of the Impositions) or (ii) the
amounts that would otherwise be deposited into such escrow account shall be
included in the Operating Profit, not deducted from Gross Revenues and shall be
distributed in cash to Owner along with the remainder of the Owners Priority.
If Owner elects to retain such amounts pursuant to clause (ii) above, Manager
shall accrue such amounts as a reserve on the accounting records of the Hotel,
and Owner shall fund the same as and when the Impositions become due, but such
accrued and unfunded amounts shall be deducted from Gross Revenues for purposes
of calculating the Incentive Management Fee. In addition, if any Mortgagee
requires the establishment of an escrow account with respect to the Impositions,
Manager shall comply with such requirements, and the amounts so escrowed shall
be applied to Impositions in accordance with such Mortgagees requirements and
any amounts so escrowed shall be Deductions.

B.
The word Impositions as
used in this Agreement shall not include any franchise, corporate, estate,
inheritance, succession, capital levy or transfer tax or other assessment or
payment in lieu thereof imposed on Owner or Manager, or any income tax imposed
on any income of Owner or Manager (including distributions to Owner or Manager
pursuant to Article III hereof), all of which shall be paid solely by Owner or
Manager, as applicable, not from Gross Revenues nor from the Reserve.

4.08.
Sarbanes-Oxley Certification.

A.
Owner may, in connection with its or any of its Affiliates annual or quarterly
Securities and Exchange Commission reporting requirements (and in any event no more than four (4) times
in any Fiscal Year), request that Manager deliver to Owner or its
Affiliate a certificate from an
accounting officer of Manager, in a form approved by Managers
accounting firm, certifying that, to his or her knowledge, the information
contained in the Accounting Period Statements for the Accounting Periods contained
within the applicable Fiscal Year or quarter are true and correct in all
material respects, subject to final adjustment based on the annual review
conducted by Manager in preparing the Annual Operating Statement. Owner shall
submit such request in writing, along
with the date by which such certificate is to be delivered, not less than five
(5) business days prior to the
requested delivery date, and Manager shall deliver the certificate by
the requested date or, if later, within five (5) business days after Managers receipt of Owners request.

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B.
In connection with Owners or its Affiliates certifications under Section 404
(Section 404) of the
Sarbanes-Oxley Act of 2002, Owner or such Affiliate shall have the right, at its
option:

1.
Either (i) to require Manager to document its processes and related internal
controls for Owner or such Affiliate to use in its required documentation under
Section 404 or (ii) to have access to Managers books and records relating to
the Hotel (including, without limitation, reasonable access to Managers
premises) to document Managers processes and related internal controls; and

2.
Either (i) to require testing by Manager of the controls identified in clause 1
above or (ii) to have access to Managers books and records relating to the
Hotel (including, without limitation, reasonable access to Managers premises)
to permit Owner or such Affiliate to test the controls identified in clause 1
above.

Manager
shall provide Owners or such Affiliates independent auditors access to
Managers books and records relating to the Hotel (including, without
limitation, access to Managers premises) to conduct their audit of the testing
performed pursuant to this Section 4.08. If Owner or such Affiliate determine
such controls have weaknesses which should be mentioned in Owners or such
Affiliates report on internal controls under Section 404 or other
certifications under the Sarbanes-Oxley Act of 2002, Manager shall use best
efforts to remedy and/or correct identified weaknesses in a timely manner.

ARTICLE V
REPAIRS, MAINTENANCE AND REPLACEMENTS

5.01.
Repairs and Maintenance to be Paid from Gross Revenues.

Subject
to the availability of adequate funds, Manager shall maintain the Hotel in good
repair and condition, use best efforts to comply with and abide by all
applicable Legal Requirements pertaining to its operation of the Hotel and
shall make or cause to be made such routine maintenance, repairs and minor
alterations as it determines are necessary for such purposes and as required
pursuant to the terms of the Franchise Agreement or by Owner. The phrase routine maintenance, repairs, and minor alterations
as used in this Section 5.01 shall include only those which are normally
expensed under generally accepted accounting principles. The cost of such
maintenance, repairs and alterations shall be paid from Gross Revenues (and not
from the Reserve) and shall be treated as a Deduction.

5.02.
Repairs, Maintenance and Equipment Replacements to be Paid from Reserve.

A.
A reserve account in the name and under the control of Owner (the Reserve) shall be established by
Manager in a bank or similar institution reasonably acceptable to both Manager
and Owner, to cover the cost of:

1.
Replacements, renewals and additions to the FF&E at the Hotel; and

2.
Routine Capital Expenditures.

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B.
Manager shall deposit funds in the Reserve as provided in Item 3 of Schedule
1.Transfers
into the Reserve shall be made at the time of each interim accounting described
in Section 4.01 hereof. All amounts transferred to the Reserve shall be
deducted from Gross Revenues in determining Operating Profit and shall be
deposited in the special Reserve account described in Section 5.02.A.

C.
Subject to the availability of adequate funds, Manager shall from time to time
make such (1) replacements and renewals to the FF&E of the Hotel, and (2)
Routine Capital Expenditures, as may be provided for in the approved Annual
Operating Projection, as may be agreed upon by Owner and Manager or as may be
required by the Franchise Agreement. Except as may be required by the Franchise
Agreement, no expenditures will be made in excess of the balance of the Reserve
without the approval of Owner. At the end of each Fiscal Year, any amounts
remaining in the Reserve shall be carried forward to the next Fiscal Year.
Proceeds from the sale of FF&E no longer necessary to the operation of the
Hotel shall be added to the Reserve. The Reserve will be kept in an
interest-bearing account, and any interest which accrues thereon shall be
retained in the Reserve. Neither (x) proceeds from the disposition of FF&E,
nor (y) interest which accrues on amounts held in the Reserve, shall (a) result
in any reduction in the required contributions to the Reserve set forth in
Section 5.02.B above, nor (b) be included in Gross Revenues. Withdrawals by
Manager from the Reserve may be made in accordance with the approved Annual
Operating Projection only by representatives of Manager whose signatures have
been authorized by Manager with the concurrence of Owner.

D.
All repairs, alterations, improvements, renewals or replacements made pursuant
to this Article V, and all amounts kept in the Reserve, shall be the property
of Owner, subject to Managers rights to apply such funds as otherwise provided
in this Agreement. In addition and notwithstanding anything contained herein to
the contrary, no funds shall be expended for replacements, renewals and
additions to the FF&E, for Routine Capital Expenditures or for any other
capital expenditures unless each such expenditure is included in the approved
Annual Operating Projection or is necessary in an emergency to protect or
preserve the Hotel or the health and safety of Hotel employees, guests or
customers. If Owner elects to use Managers construction management services
for construction projects in connection with any Routine Capital Expenditures
or other non-emergency alterations or improvements, Owner will pay Manager such
construction management fee as may be agreed upon by the parties.

E.
Notwithstanding anything contained herein to the contrary, upon the mutual
agreement of Owner and Manager, the amounts that would otherwise be deposited
into the Reserve pursuant to this Section 5.02 shall be included in the
Operating Profit, not deducted from Gross Revenues and shall be distributed in
cash to Owner along with the remainder of the Owners Priority. In such case,
Manager shall accrue such amounts as a reserve on the accounting records of the
Hotel, and Owner shall fund the same only when required under this Agreement to
cover the appropriate costs actually incurred. If Owner does not so fund such
amounts within thirty (30) days after Owner is required to do so under this
Agreement, Manager shall have the right after prior written notice to Owner
(without affecting Managers other remedies under this Agreement) to withdraw
from future distributions of funds otherwise due to Owner an amount equal to
such amount required to be so funded by Owner. However, such accrued and
unfunded reserves shall be deducted from Gross Revenues for purposes of
calculating the Incentive Management Fee.

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F.
Unless otherwise expressly covered by this Article V, except in the case of an
emergency, Manager shall not make any capital expenditure or improvement without
first obtaining Owners prior written consent and approval.

ARTICLE VI
INSURANCE

6.01.
Property Insurance.

A.
Subject to the provisions of Section 6.05, Manager shall, commencing with the
Effective Date and for the duration of the Term, procure and maintain, using
funds deducted from Gross Revenues as a Deduction in determining Operating
Profit, the following insurance and/or such other insurance as may be approved
or required by Owner:

1.
Insurance on the Hotel (including contents) against loss or damage by all
perils included in all risk (as such term is commonly used in the insurance
industry) coverage, in an amount not less than one hundred percent (100%) of
the replacement cost thereof, except that if such 100% replacement cost
coverage is not available on reasonable rates and terms, then such insurance
shall be in an amount not less than ninety percent (90%) of the replacement
cost thereof (less excavation and foundation costs), of the Hotel.

2.
Insurance against loss or damage from explosion of boilers, pressure vessels,
pressure pipes and sprinklers, to the extent applicable, installed in the
Hotel.

3.
Business interruption insurance covering loss of profits and necessary
continuing expenses for interruptions caused by any occurrence covered by the
insurance referred to in Section 6.0l.A.1, 2 and 3, for a period of not less
than one (1) year after the occurrence, of a type and in amounts and with such
deductible limits as are agreed upon by Owner and Manager.

4.
If the Hotel is in an earthquake-prone area, earthquake insurance in accordance
with Prudent Industry Practices.

B.
All policies of insurance required under Section 6.01.A. 1, 2 and 3 shall
insure Owner, Landlord, Manager, and any Mortgagee, and any losses thereunder
shall be payable to the parties as and to the extent their respective
interests, if any, may appear.

6.02.
Operational Insurance.

Subject
to the provisions of Section 6.05, Manager shall, commencing with the Effective
Date and for the duration of the Term, procure and maintain, using funds
deducted from Gross Revenues as a Deduction in determining Operating Profit,
with insurance companies approved by Owner the following insurance and/or such
other insurance as may be approved or required by Owner:

A.
Workers, compensation and employers liability insurance as may be required
under applicable laws covering all of the employees at the Hotel, with such
deductible limits or self-insured retentions as are agreed upon by owner and
Manager;

17

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B.
Commercial general liability insurance against claims for all injury, death or
property damage occurring on, in, or about the Hotel, and automobile insurance
on vehicles owned or leased by owner and operated in conjunction with the
Hotel, with a combined single limit of not less than Twenty Million Dollars
($20,000,000) for each occurrence for personal injury, death and property
damage, with such deductible limits as are agreed upon by Owner and Manager;

C.
Fidelity bonds with respect to the Hotel employees handling funds of the Hotel,
in an amount agreed upon by Owner and Manager;

D.
Employment practices liability insurance; and

E.
Such other insurance in amounts as Manager in its reasonable judgment deems
advisable (with the concurrence of Owner) for protection against claims,
liabilities and losses arising out of or connected with the operation of the
Hotel or as reasonably required by a Mortgagee.

Owner
and Landlord shall be the named insureds with respect to the insurance
described in Subsection 6.02B and 6.02D (to the extent possible) and, to the
extent applicable, Subsection 6.02E. Manager shall be the named insured and
Owner and Landlord shall be additional insureds on the policies described in
Subsections 6.02A and 6.02C.

6.03.
Coverage; Deductibles.

All
policies of insurance described in Sections 6.02 and 6.03, including the
coverages and the deductibles thereunder, shall be subject to Owners prior
approval, and Owner may require that any such coverage or policy be eliminated
or not be carried, provided that Owner will not require Manager to eliminate
any coverage that is customarily carried in accordance with Prudent Industry
Practice or that is required under a Qualified Mortgage, the Franchise
Agreement or other agreement binding on the Hotel. Either Owner or Manager may
require that insurance and/or additional insurance and/or coverage be
maintained in excess of that customarily carried in accordance with Prudent
Industry Practice, provided that the cost of such excess insurance and/or
coverage shall not be a Deduction and shall be borne by the party requesting
the same. Subject to Owners prior approval, such approval not to be
unreasonably withheld, and the provisions of Section 6.05, all insurance
described in Sections 6.01 and 6.02 may be obtained by Manager by endorsement
or equivalent means under its blanket insurance policies, provided that such
blanket policies fulfill the requirements specified herein. Deductible limits
shall be as agreed upon by Owner and Manager. No coverage required hereunder
shall be self-insured by Manager without prior written approval of Owner. Owner
shall have the right to approve the insurance policies to be obtained by
Manager pursuant hereto and the insurance companies issuing such policies. In
order to avoid any lapse in insurance coverage required to be maintained
pursuant to this Article VI, Manager shall request any consent required from
Owner hereunder with respect to insurance matters in a timely manner so that
Owner has a reasonable period of time to consider any such request, and Owner
shall respond within ten (10) days after receipt of any such request. Failure
to respond within such ten (10) day period shall be deemed approval by Owner.

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6.04.
Costs and Expenses.

Insurance
premiums and any costs or expenses with respect to the insurance described in
this Article VI shall be Deductions in determining Operating Profit. Premiums
on policies for more than one year shall be charged pro rata against Gross
Revenues over the period of the policies. Any reserves, losses, costs, damages
or expenses which are uninsured, or fall within deductible limits, shall be
treated as a cost of insurance and shall be Deductions in determining Operating
Profit.

6.05.
Owners Right to Provide Insurance.

Notwithstanding
anything contained in this Agreement to the contrary, Owner and/or its
Affiliates (including, without limitation, Landlord) shall have the right to
procure and maintain any or all of the insurance for the Hotel otherwise
required to be maintained by Manager under this Article VI and in lieu of
Manager procuring the same, provided that Owner shall give Manager not less
than thirty (30) days notice of Owners intent to provide such insurance, shall
maintain such insurance as is customary in accordance with Prudent Industry
Practice and shall provide to Manager upon request certificates of insurance
evidencing the same. In such case, all of the terms and conditions of this
Article VI, to the extent applicable, shall govern the insurance procured by
Owner under this Section 6.05, including, without limitation, the requirement
that Owner be a named insured on the operational insurance described in Section
6.02. Without limiting the generality of the foregoing, all insurance premiums
and any costs or expenses and all deductibles with respect to such insurance
shall be Deductions in determining Operating Profit., provided that, in the
event the premiums for the insurance maintained by Owner are in excess of the
premiums that would have been payable by Manager had Manager maintained the
same insurance, the amount of such excess shall be payable by Owner and shall
not be a Deduction for the purposes of determining Operating Profit. Each
insurance policy maintained by Owner or Manager in accordance with this Section
6.05 shall contain a waiver of subrogation in favor of the other party, and
Owner and Manager each release the other from claims against the other to the
extent the same are covered by insurance.

ARTICLE VII
DAMAGE AND REPAIR

7.01.
Damage and Repair.

A.
If, during the Term, the Hotel is damaged or destroyed by fire, casualty or
other cause, Owner and/or Landlord may elect, in its sole and absolute
discretion, to repair or replace the damaged or destroyed portion of the Hotel
with such modifications as Owner may deem appropriate or as may be required by
law, and Manager shall have the right to discontinue operating the Hotel to the
extent it deems necessary to comply with applicable law, ordinance, regulation
or order or as necessary for the safe and orderly operation of the Hotel,
provided that Manager and Owner acknowledge that, in the event such damage is a
Minor Casualty, such damage shall be repaired as provided in Section 7.01C and
this Agreement shall remain in effect. Proceeds of insurance with respect to
the insurance described in Subsections 6.02A, 6.02C and 6.02D shall be paid to
Owner, Landlord and/or Manager, as their interests may appear. All proceeds
from all other insurance described in this Agreement shall be paid to Owner
and/or

19

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Landlord, as
their interests may appear. If such damage or destruction is other than a Minor
Casualty and Owner elects not to repair or replace said damaged portion of the
Hotel, Owner shall so notify Manager by written notice within ninety (90) days
after the date of the casualty.

B.
In the event damage or destruction to the Hotel is other than a Minor Casualty
and Owner notifies Manager that Owner will not repair or replace such damage,
either party may terminate by at least sixty (60) days prior written notice to
the other party.

C.
If, during the Term, the Hotel is damaged by fire, casualty or other cause and
such damage is a Minor Casualty or Owner otherwise elects to repair or replace
such damaged or destroyed portion of the Hotel, Manager, with the concurrence
of Owner, shall, with all reasonable diligence, proceed to process the claim
with the applicable insurance carriers, including settling such claim, and to
make the necessary arrangements with appropriate contractors and suppliers to
repair and/or replace the damaged portion of the Hotel. Owners consent shall
be needed for Manager to perform any of the foregoing, all of which shall be
performed in accordance with Prudent Industry Practices. Owner agrees to sign
promptly any documents which are necessary to process and/or adjust the claim
with the insurance carriers, as well as any contracts with such contractors
and/or suppliers, provided that in each instance such documents and contracts
have previously been approved by Owner. If Owner elects to use Managers
construction management services for construction projects in connection with
any non-emergency repairs or replacements, Owner will pay Manager such
construction management fee as may be agreed upon by the parties.
Notwithstanding anything in this Agreement to the contrary, Manager agrees to
make or cause to have made all emergency repairs and replacements at the actual
cost paid or incurred for such repair or replacement.

7.02.
Condemnation.

A.
In the event all or substantially all of the Hotel shall be taken in any
eminent domain, condemnation, compulsory acquisition, or similar proceeding by
any competent authority for any public or quasi-public use or purpose, or in
the event a portion of the Hotel shall be so taken, but the result is that
either Owner or Manager reasonably determines that it is not feasible to
continue to operate the Hotel in accordance with the standards required by this
Agreement, Owner or Manager may terminate this Agreement as of the effective
date of such taking. All awards and proceeds of any such taking or proceeding
shall belong to Owner and/or Landlord, as the case may be.

B.
In the event this Agreement is not terminated pursuant to Section 7.02.A, such
portion of the Hotel that is not so taken shall be repaired or replaced, with
such modifications as Owner may deem appropriate or as may be required by law,
and this Agreement shall continue except as may be otherwise agreed by the
parties. All awards for any such partial taking or condemnation shall belong to
Owner and/or Landlord, as the case may be. Manager shall have the right to
discontinue temporarily operating the Hotel to the extent it deems necessary
for the safe and orderly operation of the Hotel.

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7.03.
Subordination to Qualified Mortgage.

A.
Manager shall provide to any Mortgagee an instrument (the Subordination Agreement), reasonably
satisfactory in all respects to Owner and such Mortgagee, which shall be
recordable in the jurisdiction where the Hotel is located, pursuant to which:

1.
This Agreement and any extensions, renewals, replacements or modifications
thereto, and all right and interest of Manager in and to the Hotel, shall be
subject and subordinate to such Mortgagees Qualified Mortgage, with notice and
opportunity to cure rights and post-default cure rights in favor of Mortgagee;

2.
Manager shall be obligated to each of the Subsequent Owners (as defined below)
to perform all of the terms and conditions of this Agreement for the balance of
the remaining Term hereof, with the same force and effect as if such Subsequent
Owner were the Owner; and

3.
In the event that there is a Foreclosure of such Qualified Mortgage in connection
with which title or possession of the Hotel is transferred to the Mortgagee (or
its designee) or to a purchaser at foreclosure or to a subsequent purchaser
from the Mortgagee (or from its designee) (all of the foregoing shall
collectively be referred to as Subsequent
Owners), this Agreement may be terminated at the election of
such Subsequent Owner as of the date of such Foreclosure or upon thirty (30)
days notice, unless and to the extent the Mortgagee, in its sole and absolute
discretion, shall have agreed to recognize Managers rights under this
Agreement following foreclosure or deed-in-lieu of foreclosure, which
recognition may be requested from such Mortgagee by Manager prior to
encumbrance of the Hotel by such Mortgagees Qualified Mortgage. Such
recognition may be granted or denied by such Mortgagee in its sole and absolute
discretion and shall not be a condition to Owners or Landlords right to
mortgage the Hotel with any such Qualified Mortgage and denial of recognition
of this Agreement by a Mortgagee shall not affect any of Managers obligations
or duties under this Agreement.

B.
Except as otherwise agreed by Owner and Manager, Owner will not encumber its
leasehold estate under the Hotel Lease with any Mortgage other than a Qualified
Mortgage. Manager shall have no responsibility for payment of debt service due
with respect to the Hotel, from Gross Revenues or otherwise, and such
responsibility shall be solely that of Owner, provided that Manager shall
comply with any requirements of any Mortgagee with respect to establishment of
escrows and payment of Impositions.

7.04.
No Covenants, Conditions or Restrictions.

A.
Manager acknowledges and agrees with Owner, and represents and warrants to
Owner, that, as of the Effective Date, to the best of Managers knowledge,
except as disclosed to Owner in writing, there are no covenants, conditions or
restrictions, including reciprocal easement agreements or cost-sharing
arrangements (individually or collectively referred to as CC&R(s)) affecting the Site or the
Hotel which: (i) would prohibit or limit Manager from operating the Hotel in
accordance with the System Standards; (ii) would allow the

21

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Hotel
facilities (for example, parking spaces) to be used by persons other than
guests, invitees or employees of the Hotel; (iii) would allow the Hotel
facilities to be used for specified charges or rates which have not been
approved by Manager; (iv) would subject the Hotel to exclusive arrangements
regarding food and beverage operation or retail merchandise; or (v) would
impose any financial obligations on Owner or Landlord or on the Hotel.

7.05.
Liens; Credit.

Manager
and Owner shall use commercially reasonable efforts to prevent any liens from
being filed against the Hotel which arise from any maintenance, repairs,
alterations, improvements, renewals or replacements in or to the Hotel and
shall cooperate fully in obtaining the release of any such liens. If the lien
was not occasioned by the fault of either party, the cost of releasing any lien
shall be treated the same as the cost of the matter to which it relates. If the
lien arises as a result of the fault of either party, then the party at fault
shall bear the cost of obtaining the lien release. In no event shall either
party borrow money in the name of or pledge the credit of the other.

7.06.
Hotel Lease.

Manager
shall use reasonable efforts to comply with any requirements of the Hotel Lease
respecting operation of the Hotel, and Owner shall comply with any other
obligations of Owner under the Hotel Lease, including but not limited to
payment as and when due, of any and all rental and other payments due under the
Hotel Lease. Manager shall have no responsibility for payment of rental or
other sums due under the Hotel Lease, from Gross Revenues or otherwise, and
such responsibility shall be solely that of Owner.

ARTICLE VIII
DEFAULTS

8.01.
Events of Default.

Each
of the following shall, to the extent permitted by applicable law, constitute
an Event of Default under
this Agreement.

A.
The filing of a voluntary petition in bankruptcy or insolvency or a petition
for reorganization under any bankruptcy law by either party, or the admission
by either party that it is unable to pay its debts as they become due.

B.
The consent to an involuntary petition in bankruptcy or the failure to vacate,
within ninety (90) days from the date of entry thereof, any order approving an
involuntary petition by either party.

C.
The entering of an order, judgment or decree by any court of competent
jurisdiction, on the application of a creditor, adjudicating either party as
bankrupt or insolvent or approving a petition seeking reorganization or
appointing a receiver, trustee, or liquidator of all or a substantial part of
such partys assets, and such order, judgment or decrees continuing unstayed
and in effect for an aggregate of sixty (60) days (whether or not consecutive).

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D.
The failure of either party to make any payment required to be made in
accordance with the terms of this Agreement, as of the due date as specified in
this Agreement and the failure to cure such default within ten (10) days after
receipt of written notice from the non-defaulting party demanding such cure, or
in the case of any failure by Manager to make payments of Owners Priority or
other distributions of Operating Profit payable to Owner, such failure is not
cured within three (3) Business Days after receipt of written notice from
Owner.

E.
Any employee at the Hotel is or becomes a Specially Designated National or
Blocked Person and is not terminated from his or her employment at the Hotel on
or before thirty (30) days after Managers receipt of notice of such employees
status.

F.
In carrying out its duties hereunder, any principal or owner of Manager or its
Affiliates providing services to the Hotel commits any act involving fraud or
moral turpitude relating to the business or affairs of the Hotel, or is
indicted or convicted of an act which constitutes a felony.

G.
Any representation or warranty by Manager or any of its Affiliates in this
Agreement or in any certificate or document or financial or other statement
furnished or delivered to Owner or any of its Affiliates at any time under or
in connection with this Agreement shall have been intentionally false or
misleading in any material respect on or as of the date made or deemed made.

H.
The failure of either party to perform, keep or fulfill any of the other
covenants, undertakings, obligations or conditions set forth in this Agreement,
and the continuance of such default for a period of thirty (30) days after the
defaulting partys receipt of written notice from the non-defaulting party of
said failure, or, if the default is such that it cannot reasonably be cured
within said thirty (30) day period of time, if the defaulting party fails to
commence the cure of such default within said thirty (30) day period of time or
thereafter fails to diligently pursue such efforts to completion, provided that
(i) in the case of any default by Manager (other than in clause (ii) below),
such default is cured not later than ninety (90) days after Managers receipt
of such written notice, (ii) in the case of Managers failure to maintain the
insurance required by Article VI (except with respect to any insurance that
Owner has elected to maintain pursuant to Section 6.05), such failure is cured
not later than ten (10) days after Managers receipt of such written notice
and, in any event, prior to the date any insurance coverage would lapse, and
(iii) in the event Owner has elected to maintain insurance pursuant to Section
6.05 and fails to maintain such insurance, such failure is cured not later than
ten (10) days after Owners receipt of written notice of default from Manager.

8.02.
Remedies.

Upon the
occurrence of an Event of Default, the non-defaulting party shall have the
right to pursue any one or more of the following courses of action: (1) to
terminate this Agreement by written notice to the defaulting party, which
termination shall be effective as of the effective date which is set forth in
said notice, provided that said effective date shall be at least thirty (30)
days after the date of said notice in the case of an Event of Default by Owner;
(2) to institute forthwith any and all proceedings permitted by law or equity
including, without limitation (but subject to

23

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the provisions
of Section 10.20 hereof), actions for specific performance and/or damages;
and/or (3) to avail itself of the remedies described in Section 8.03.

8.03.
Additional Remedies.

A.
Upon the occurrence of a Default by either party under the provisions of
Section 8.0l.D, the amount owed to the non-defaulting party shall accrue
interest, at an annual rate equal to the Prime Rate plus three (3) percentage
points, from and after the date on which the Default occurred.

B.
The remedies granted under Section 8.02 and Section 8.03 shall not be in
substitution for, but shall be in addition, to, any and all rights and remedies
available to the non-defaulting party (including, without limitation,
injunctive relief and damages) by reason of applicable provisions of law or equity
and shall survive Termination.

ARTICLE IX
ASSIGNMENT AND SALE

9.01.
Assignment.

A.
Manager shall not assign or transfer its interest in this Agreement without the
prior written consent of Owner and any franchisor under the Franchise
Agreement. Any assignee consented to by Owner and by such franchisor shall
agree in writing to be bound by and comply with the terms of this Agreement
(such written agreement to be acceptable in form and substance to Owner and
such franchisor). For purposes of the foregoing, a transfer of Managers
interest in this Agreement shall include (i) an assignment or pledge of this
Agreement as security for an obligation, (ii) a transfer of more than fifty
percent (50%) ownership or beneficial interest, direct or indirect, in Manager,
including any such transfer by operation of law and (iii) a transfer of
Managers interest in this Agreement by operation of law, including by merger
or consolidation.

B.
Owner shall have the right to assign or transfer its interest in this Agreement
without the prior written consent of the Manager (1) as security for a
Qualified Mortgage of the Hotel in accordance with this Agreement, (2) in
connection with a sale, assignment, transfer or other disposition of the Hotel
by Owner or Landlord and (3) in connection with a merger or consolidation or
reorganization of, or a sale of all or substantially all of the assets of,
Apple REIT Ten, Inc., or any Affiliate thereof.

C.
In the event Owner and the franchisor under the Franchise Agreement consent to
an assignment of this Agreement by Manager, no further assignment or transfer
shall be made without the express consent in writing of such parties. An
assignment by Manager of its interest in this Agreement shall not relieve
Manager from its obligations under this Agreement.

D.
Notwithstanding anything contained herein to the contrary, Manager shall not
assign its interest in this Agreement to a Specially Designated National or
Blocked Person.

9.02.
Sale of the Hotel.

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Owner
or Landlord may, in its or their sole and absolute discretion, enter into any
Sale of the Hotel to any Person. In connection with any such Sale of the Hotel
during the first five (5) years of the Term, this Agreement will be assigned
and not terminated so long as no Event of Default exists. In connection with
any Sale of the Hotel thereafter, Owner may assign this Agreement as provided
in Section 9.01 or terminate this Agreement upon thirty (30) days notice to
Manager, provided that if this Agreement is terminated as a result of such Sale
during the second five (5) years (i.e., years six (6) through ten (10)) of the
Term, and no Event of Default exists, Owner will pay or cause to be paid to
Manager a termination fee within five (5) Business Days after the effective
date of such termination, such fee to be in an amount equal to eighty percent
(80%) of the Base Management Fee reasonably estimated to be payable to Manager
from the effective date of the termination until the end of the tenth (10th)
year of the Term. In connection with any Sale of the Hotel after the tenth (10th)
year of the Term, Owner, in its sole discretion, may assign this Agreement as
provided in Section 9.01 or terminate this Agreement upon thirty (30) days
notice to Manager, and no termination fee shall be payable to Manager. Upon any
such sale or assignment, Owner shall be released of all liabilities and
obligations arising under and with respect to this Agreement on and after the
date of such Sale of the Hotel.

ARTICLE X
MISCELLANEOUS

10.01.
Right to Make Agreement.

Each
party warrants, with respect to itself, that neither the execution of this
Agreement nor the performance of the transactions contemplated hereby shall
violate any provision of law or judgment, writ, injunction, order or decree of
any court or governmental authority having jurisdiction over it; result in or
constitute a breach or default under any indenture, contract, other commitment
or restriction to which it is a party or by which it is bound; or, require any
consent, vote or approval which has not been taken, or at the time of the
transaction involved shall not have been given or taken. Each party covenants
that it has and will continue to have throughout the Term and any extensions
thereof, the full right to enter into this Agreement and perform its
obligations hereunder.

10.02.
Consents and Cooperation.

Wherever
in this Agreement the consent or approval of Owner or Manager is required,
except as otherwise provided in this Agreement or agreed by the parties, such
consent or approval shall not be unreasonably withheld, delayed or conditioned
by the party whose consent or approval is required, shall be in writing and
shall be executed by a duly authorized officer or agent of such party. Owner
agrees to cooperate with Manager by executing such leases, subleases, licenses,
concessions, equipment leases, service contracts and other agreements
negotiated in good faith and at arms length by Manager and pertaining to the
Hotel that, in Managers reasonable judgment, should be made in the name of the
Owner, provided that all such agreements shall be subject to Owners prior
approval.

10.03.
Relationship.

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The
relationship of Owner and Manager shall be that of independent contractors, and
neither this Agreement nor any agreements, instruments, documents, or
transactions contemplated hereby shall in any respect be interpreted, deemed or
construed as making Manager an agent of or partner or joint venturer with
Owner. Owner and Manager agree that neither party will make any contrary
assertion, claim or counterclaim in any action, suit, arbitration or other
legal proceedings involving Owner and Manager. Any contract or agreement that
Manager enters into with an Affiliate of Manager or with a third party to
provide goods or services to the Hotel shall be entered into in the name of
Manager and not Owner, and Owner have no liability with respect to any such
contract or agreement except for contracts or agreements to which Owner has
previously consented to in writing and which are consistent with the Annual
Operating Projection.

10.04.
Applicable Law.

This
Agreement shall be construed under and shall be governed by the laws of the
Commonwealth of Virginia, without regard to that states conflict of laws
provisions. Each of Owner and Manager hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
courts of the state in which the Hotel is located and of the United States
District Court of such state, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to this Agreement, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such state court or,
to the extent permitted by law, in such Federal court. Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment
or in any other manner provided by law. Nothing in this Agreement shall affect
any right that Owner may otherwise have to bring any action or proceeding
relating to this Agreement against Manager in the courts of any jurisdiction.
Each of Owner and Manager hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any obligation which it
may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement in any court referred
to above. Each of the parties hereto hereby irrevocably waives, to the fullest
extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action or proceeding in any such court.

10.05.
Recordation.

The
terms and provisions of this Agreement shall not run with the parcel of land
designated as the Site, and neither this Agreement nor any memorandum or short
form hereof shall be recorded or registered without the prior written consent
of Owner.

10.06.
Headings.

Headings
of articles and sections are inserted only for convenience and are in no way to
be construed as a limitation on the scope of the particular articles or
sections to which they refer.

10.07.
Notices.

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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 (with a copy by first class mail) or Express Mail
service, in each case postage prepaid, return receipt requested or by
nationally utilized overnight delivery service, addressed to the parties as
follows:

| |                |                                             |                          
| | -------------- | ------------------------------------------- | -------------------------
| | To Owner:      | Apple Ten
 Hospitality Management, Inc.    
| |                | c/o Apple
 REIT Companies                  
| |                | 814 East
 Main Street                      
| |                | Richmond,
 Virginia 23219                  
| |                | Attn:                                       | Krissy Gathright         
| |                | Attn:                                       | General
 Counsel         
| |                | Phone:                                      | (804)
 344-8121          
| |                | Fax:                                        | (804)
 344-8129          
| |                |                                            
| | To Manager:    | Stonebridge
 Realty Advisors, Inc.         
| |                | c/o
 Stonebridge Companies                 
| |                | 9100 East
 Panorama Drive, Suite 300       
| |                | Englewood,
 Colorado 80112                 
| |                | Attn:                                       | Navin C.
 Dimond         
| |                | Phone:                                      | (303)
 785-3100, ext. 122
| |                | Fax:                                        | (303)
 785-3107          
| |                |                                            
| | With copy
 to: | Stonebridge
 Realty Advisors, Inc.         
| |                | c/o
 Stonebridge Companies                 
| |                | 9100 East
 Panorama Drive, Suite 300       
| |                | Englewood,
 Colorado 80112                 
| |                | Attention:
 Howard Pollack, General Counsel
| |                | Phone: (303)
 785-3100, ext. 126           
| |                | Fax No.:
 (303) 785-3107                   

or at such
other address as is from time to time designated by the party receiving the
notice. Any such notice that is mailed in accordance herewith shall be deemed
received when delivery is received or refused, as the case may be.
Additionally, notices may be given by telephone facsimile transmission,
provided that an original copy of said transmission shall be delivered to the
addressee by nationally utilized overnight delivery service on the business day
following such transmission. Telephone facsimiles shall be deemed delivered on
the date of such transmission.

10.08.
Environmental Matters.

A.
Manager shall operate the Site and the Hotel in compliance with all applicable
Environmental Laws. Manager shall (i) not use, generate or store any Hazardous
Materials in or on the Site or the Hotel except as necessary for the operation
and maintenance of the Hotel and in compliance with the Environmental Laws,
(ii) not allow, permit or cause the release or threat of release of any
Hazardous Materials in, on, under or from the Site or the Hotel, except for the
ordinary use of cleaning and maintenance supplies in compliance with applicable

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Environmental
Laws, (iii) not allow the accumulation of tires, spent batteries, construction
and demolition debris or any other solid waste, except for solid waste
generated from the operation of the Hotel and stored in containers for normal
scheduled pickup and disposal off site in compliance with applicable
Environmental Laws and (iv) operate and maintain the Hotel in a manner to
prevent mold, fungal or other microbial growth or conditions that are favorable
for such growth, including, without limitation, the proper operation and maintenance
of heating, ventilation and air conditioning systems and removal of any mold,
fungal or microbial growth.

B.
In the event of the discovery of a release or threat of release of Hazardous
Materials in, on, under or from any portion of the Site or in the Hotel during
the Term, Manager shall promptly notify Owner and shall take all appropriate
actions with regard to such Hazardous Materials as required of an owner or
operator under applicable Environmental Laws. Manager shall keep Owner apprised
of the status of addressing the release or threat of release of Hazardous
Materials, and Owner shall have the right at any time to assume control of the
matter from Manager.

Environmental Laws shall mean all
federal, state and local environmental, health and safety laws, rules,
regulations, ordinances, permits, orders, common law or requirements of any
governmental authority, including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. §§
9601, et. seq., as amended; Solid Waste Disposal Act, 42 U.S.C.
§§ 6901, et. seq., as amended; Toxic Substances Control Act, 15
U.S.C. §§ 2601, et. seq., as amended; Hazardous Materials
Transportation Act, 49 U.S.C. §§ 5101, et. seq., as amended; Federal
Water Pollution Control Act, 33 U.S.C. §§ 1251, et. seq.

Hazardous Materials shall mean any
hazardous substances, hazardous wastes, toxic substances, hazardous materials,
petroleum or petroleum products, pollutants or contaminants (as those terms are
defined under Environmental Laws), including, without limitation,
polychlorinated biphenyls, lead or lead-based paint, asbestos or mold in such
concentrations or amounts as may impose clean-up, removal, monitoring or other
responsibility under the Environmental Laws or which may present a significant
risk of harm to guests, invitees or employees of the Hotel.

10.09.
Confidentiality.

Owner
and Manager agree that the terms of this Agreement are strictly confidential
and will use their reasonable efforts to ensure that the terms of this
Agreement are not disclosed to any outside person or entities without the prior
written consent of the other party, except (1) as Owner may determine is
required by any law, rule, regulation or judicial process, or by any regulatory
or supervisory authority having jurisdiction over the parties or any of their
Affiliates or (2) to the extent reasonably necessary, (i) to obtain licenses,
permits and other public approvals, (ii) in connection with a financing of the
Hotel, Owner, or any Affiliate thereof, (iii) in connection with a Sale of the
Hotel or other sale of Owner, or any Affiliate thereof or its or their
corporate assets, (iv) subject to the provisions of Section 4.02, in connection
with an audit or other investigation conducted pursuant to this Agreement or
(v) in connection with either partys enforcement of its rights and remedies
under this Agreement. Notwithstanding the foregoing or anything to the contrary
set forth herein, the terms of this Agreement shall not be deemed confidential
to the extent: (a) such information becomes generally available to the public

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other than as
a result of unauthorized disclosure by the recipient or persons to whom such
recipient has made the information available; or (b) the party seeking to
disclose such confidential information can demonstrate to the reasonable
satisfaction of the other party that the information sought to be disclosed is
customarily disclosed by at least 80% of all Persons directly or indirectly
owning hotels in the United States.

10.10.
Indemnification.

A.
Manager hereby agrees to indemnify, defend and hold harmless Owner, its
officers, directors, stockholders, employees, agents and their respective
successors and assigns from and against any and all claims, liabilities,
damages, losses, obligations and costs (including reasonable attorneys fees)
arising from (i) Managers or any of its Affiliates failure to comply with its
obligations under this Agreement, and (ii) any gross negligence, theft, fraud
or willful misconduct of the corporate level staff of Manager or its Affiliates
or the on-site executive staff at the Hotel. All liabilities of Manager
pursuant to this Section 10.10A shall be Managers Liabilities.

B.
Owner hereby agrees to indemnify, defend and hold harmless Manager, its
officers, directors, stockholders, employees, agents and their respective
successors and assigns from and against any and all claims, liabilities,
damages, losses, obligations and costs (including reasonable attorneys fees)
arising from Owners failure to comply with its obligations under this
Agreement.

10.11.
Actions to be Taken Upon Termination.

Upon
a Termination, the following shall be applicable:

A.
Manager shall, within ninety (90) days after Termination, prepare and deliver
to Owner a final accounting statement with respect to the Hotel, as more
particularly described in Section 4.01 hereof, along with a statement of any
sums due from Owner to Manager pursuant hereto, dated as of the date of
Termination. Within thirty (30) days of the receipt by Owner of such final
accounting statement, the parties will make whatever cash adjustments are
necessary pursuant to such final statement. The cost of preparing such final
accounting statement shall be a Deduction, unless the Termination occurs as a
result of an Event of Default by either party, in which case the defaulting
party shall pay such cost. Manager and Owner acknowledge that there may be
certain adjustments for which the information will not be available at the time
of the final accounting and the parties agree to readjust such amounts and make
the necessary cash adjustments when such information becomes available; provided,
however, that all accounts shall be deemed final two (2) years after
Termination.

B.
Manager shall immediately release and transfer to Owner any of Owners funds
which are held or controlled by Manager with respect to the Hotel, after
deducting any amounts due and owing to Manager under this Agreement.

C.
Manager shall make available to Owner such books and records respecting the
Hotel (including those from prior Fiscal Years during the Term of this
Agreement) as will be needed by Owner to prepare the accounting statements, in
accordance with the Uniform System of Accounts, for the Hotel for the year in
which the Termination occurs. Managers obligation

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under this
Subsection 10.11C shall expire two (2) years after the date of termination of
this Agreement.

D.
Manager shall (to the extent permitted by law) assign to Owner or to the new
manager all operating licenses and permits for the Hotel which have been issued
in Managers name (including liquor and restaurant licenses, if any); provided
that if Manager has expended any of its own funds in the acquisition of any of
any of such licenses or permits, Owner shall reimburse Manager therefor if it
has not done so already unless such expenditure is a Managers Liability.

E.
If this Agreement is terminated by reason of Owners Event of Default, a
reasonable reserve shall be established from Gross Revenues to reimburse
Manager for all costs and expenses incurred by Manager in terminating its
employees at the Hotel, such as severance pay, unemployment compensation,
employment relocation and other employee liability costs arising out of the
termination of employment of Managers employees at the Hotel. If Gross
Revenues are insufficient to meet the requirements of such reserve, then Owner
shall deliver to Manager, within ten (10) Business Days after receipt of
Managers written request therefor, the sums necessary to establish such
reserve.

F.
Owner may, at its option, (i) provide Manager and/or the employees at the Hotel
(or require Manager to provide to the employees at the Hotel) at least sixty
(60) days notice of a Termination and/or (ii) cause the entity which shall
succeed Manager as the operator of the Hotel to offer employment to a
sufficient number of the employees at the Hotel to avoid the occurrence, in
connection with such Termination, of a plant closing or mass layoff within
the meaning of the WARN Act. If Owner elects to cause the entity which shall
succeed Manager as operator of the Hotel to employ certain of Managers
employees, Manager shall not take any action that would cause such employees
not to continue as employees at the Hotel.

G.
Various other actions shall be taken, as described in this Agreement,
including, but not limited to, the actions described in Section 4.05 and
Section 6.04.

H.
Manager shall peacefully vacate and surrender the Hotel to Owner on the date of
termination unless otherwise agreed to by the parties.

I.
Owner may elect to maintain any insurance coverages or policies that Manager
has procured pursuant to Article VI. In the event Owner elects to cancel any
such insurance coverages or policies prior to the applicable expiration date(s)
thereof, Owner shall pay any cancellation penalties with respect to the
cancelled insurance coverage unless termination results from a default by
Manager.

The
provisions of this Section 10.11 shall survive Termination.

10.12.
Waiver.

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
contained in this Agreement, 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

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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.

10.13.
Partial Invalidity.

If
any portion of any term or provision of this Agreement, or the application
thereof to any person or circumstance shall be invalid or unenforceable, at any
time or to any extent, the remainder of this Agreement, or the application of
such term or provision to persons or circumstances other than those as to which
it is held invalid or unenforceable, shall not be affected thereby, and each
term and provision of this Agreement shall be valid and be enforced to the
fullest extent permitted by law.

10.14.
Survival.

Except
as otherwise specifically provided in this Agreement, the rights and
obligations of the parties herein shall not survive any Termination.

10.15.
Negotiation of Agreement.

Owner
and Manager are both business entities having substantial experience with the
subject matter of this Agreement, and each has fully participated in the
negotiation and drafting of this Agreement. Accordingly, this Agreement shall
be construed without regard to the rule that ambiguities in a document are to
be construed against the draftsman. No inferences shall be drawn from the fact
that the final, duly executed Agreement differs in any respect from any
previous draft hereof.

10.16.
Estoppel Certificates.

Each
party to this Agreement shall at any time and from time to time, upon not less
than fifteen (15) days prior notice from the other party, execute, acknowledge
and deliver to such other party, or to any third party specified by such other
party, a statement in writing: (a) certifying that this Agreement is unmodified
and in full force and effect (or if there have been modifications, that the
same, as modified, is in full force and effect and stating the modifications);
and (b) stating to the best knowledge of the certifying party (i) whether or
not there is a continuing Default or Event of Default by the non-certifying
party in the performance or observance of any covenant, agreement or condition
contained in this Agreement, (ii) the amount, if any, of any past due fees or
other past due amounts owed to Manager or Owner; and (iii) whether or not there
are any past due and unpaid obligations with respect to the Hotel, other than
in the ordinary course of business. Such statement shall be binding upon the
certifying party and may be relied upon by the non-certifying party and/or such
third party specified by the non-certifying party as aforesaid. In addition,
upon written request after a Termination, each party agrees to execute and
deliver to the non-certifying party and to any such third party a statement
certifying that this Agreement has been terminated.

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10.17.
Affiliates.

Except
for the contract between Manager and its Affiliate that furnishes employees for
the Hotel as provided in Section 1.03, Manager shall not be entitled to
contract with companies that are Affiliates (or companies in which Manager has
an ownership interest if such interest is not sufficient to make such a company
an Affiliate) to provide goods and/or services to the Hotel without the prior
written consent of Owner. Owner agrees not to unreasonably withhold consent if
the terms of such contracts are on terms as favorable to Owner and the Hotel as
are available from third parties that are not affiliated and the terms of the
contract have been specifically disclosed and approved in the approved Annual
Operating Projection. In addition, Manager shall not be entitled to contract
with third parties or their Affiliates that have other contractual
relationships with Manager and/or its Affiliates to provide goods and/or
services to the Hotel without the prior written consent of Owner unless the
terms of such contracts are as favorable to Owner and the Hotel as are
available from unrelated third parties, except for geographic and regional
differences in the pricing of goods and services that are attributable to the
location of the Hotel. In each instance, all direct and indirect benefits of
such contractual relationships with affiliated companies and/or third parties
having other contractual relationships shall have been disclosed to Owner and
shall accrue to the benefit of the Hotel and/or Owner, other than incidental
entertainment of Managers senior staff and principals that is not material and
could not reasonably be expected to influence any decision made by Manager, its
Affiliates or its or their officers, directors, employees or principals with
respect to any contract affecting the Hotel.

10.18.
Blocked Persons or Entities.

Manager
represents and warrants to Owner and covenants for the benefit of Owner that
(i) neither Manager nor any of its Affiliates or any officers, directors,
partners or employees of Manager or its Affiliates, or, to its knowledge, the
funding sources for any of the foregoing, is or will be identified on the list
of the U. S. Treasurys Office of Foreign Asset Control (OFAC); (ii) neither Manager nor any of its
Affiliates is or will be directly or indirectly owned or controlled by the
government of any country that is subject to an embargo imposed by the United
States government; and (iii) neither Manager nor any of its Affiliates is
acting or will act on behalf of a government of, or is involved in business
arrangements or other transactions with, any country that is subject to such an
embargo. Manager will notify Owner in writing immediately upon the occurrence
of any event which would render the foregoing representations and warranties
incorrect.

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10.19.
Restrictions on Operating the Hotel in Accordance with System Standards.

In
the event of either (i) a Legal Requirement, including an order, judgment or
directive by a court or administrative body which is issued in connection with
any Litigation involving Owner, or (ii) any action taken by a Mortgagee in
connection with a Foreclosure, which in either case restricts or prevents
Manager, in a material and adverse manner, from operating the Hotel in
accordance with System Standards (including without limitation, any
restrictions on expenditures by Manager from the Operating Accounts or from the
Reserve, other than restrictions which are set forth in this Agreement),
Manager shall be entitled, at its option, to terminate this Agreement upon
sixty (60) days written notice to Owner. The foregoing shall not reduce or
otherwise affect the rights of the parties under Article VIII.

10.20.
Counterparts.

This
Agreement may be executed in any number of counterparts, each of which shall be
deemed to be an original, and all of which shall constitute one and the same
instrument. Such executed counterparts may be delivered by facsimile which,
upon transmission to the other party, shall have the same force and effect as
delivery of the original signed counterpart. The submission of an unsigned copy
of this Agreement or an electronic instrument with or without electronic
signature to either party shall not constitute an offer or acceptance. This
Agreement shall become effective and binding only upon execution and delivery
of this Agreement in non-electronic form by both parties in accordance with
this Section.

10.21.
Entire Agreement.

This
Agreement, together with any other writings signed by the parties expressly
stated to be supplemental 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 written non-electronic instrument that
has been duly executed by the non-electronic (which shall not be deemed to
exclude facsimile) signature of an authorized representative of the parties
hereto.

10.22.
Franchise Agreement.

During
the Term of this Agreement, Manager shall perform all of the obligations of
Owner as Franchisee under the Franchise Agreement to the extent such
obligations relate to the management or operation of the Hotel, including,
without limitation, the obligations of Franchisee under Paragraphs ____ ____
_____ _____ of the Franchise Agreement, and Manager shall not commit any act or
omit to take any action that would cause a default by the Franchisee under the
Franchise Agreement. In the event of any inconsistency between the provisions
of this Agreement and the provisions of the Franchise Agreement, the provisions
of the Franchise Agreement shall prevail. Manager and Owner shall each send
promptly to the other any and all material notices that it receives from the
Franchisor with respect to the Hotel or the Franchise Agreement, and Manager
shall keep Owner fully informed with respect to all matters that come to
Managers attention under the Franchise Agreement that could be material to
Owner and/or the business operated at the Hotel. Notwithstanding the foregoing,
Manager shall not have the right to grant any consent, approval or other right
reserved to the Franchisee

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under the
Franchise Agreement or to make any decision or agreement on behalf of Owner
under the Franchise Agreement. In the event the Franchise Agreement is
terminated as a result of any Event of Default or any other act, omission or
default by Manager or its Affiliates, this Agreement shall also terminate
effective as of the date of termination of the Franchise Agreement; if the
Franchise Agreement is terminated for any other reason, the Agreement shall not
terminate but shall remain in full force and effect, unless the parties hereto
agree otherwise.

10.23.
Operation of Other Hotels.

During
the Term and except for the Hotel and the hotel listed in Schedule 1 attached
hereto (the Excluded Hotel),
if Manager or any of its Affiliates shall acquire, lease, own, manage or
operate, directly or indirectly, any hotel, inn, motel or other type of lodging
facility, regardless of whether similar to the Hotel or whether operated under
the same or a different brand, in the same geographic area or market as the
Hotel, Manager shall not permit unfair favoritism in the operation and
management of such other hotels that would disadvantage the operation or
business of the Hotel (such as, by way of example only, directing potential
Hotel guests to such other hotels instead of to the Hotel). At Owners request,
Manager shall provide such information as may reasonably be requested by Owner
to determine if there has been any such unfair favoritism and, in the event
Owner, in its reasonable business judgment, determines that any such unfair
favoritism has occurred, Owner may terminate the Agreement, provided that if
Manager is able to demonstrate to Owners reasonable satisfaction that Manager
can effect a cure of such unfair favoritism, Owner will permit Manager to
effect such cure, and if such cure is effected to Owners reasonable satisfaction,
this Agreement will not be terminated as a result of such unfair favoritism,
provided that this Agreement shall again become terminable pursuant to this
Section 10.23 if there is unfair favoritism after such cure.

10.24.
Expert Decisions.

Where
a matter is to be referred to an Expert for determination, the following
provisions shall apply to such Experts determination:

A.
The use of the Expert shall be the exclusive remedy of the parties and neither
party shall attempt to adjudicate any dispute in any other forum. The decision
of the Expert shall be final and binding on the parties and shall not be
capable of challenge, whether by arbitration, in court or otherwise;

B.
Each party shall be entitled to make written submissions to the Expert, and if
a party makes any submission it shall also provide a copy to the other party
and the other party shall have the right to comment on such submission. The
parties shall make available to the Expert all books and records relating to
the issue in dispute and shall render to the Expert any assistance requested of
the parties. The costs of the Expert and the proceedings shall be borne as
directed by the Expert unless otherwise provided for herein. The Expert may
direct that such costs be treated as Deductions;

C.
The Expert shall make its decision with respect to the matter referred for
determination by applying the standards applicable to first-class hotels in
accordance with the

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System
Standards (including the requirements of any quality assurance program) and
determining whether the matter at issue is necessary to satisfy such standards;
and

D.
The terms of engagement of the Expert shall include an obligation on the part
of the Expert to: (i) notify the parties in writing of his decision within
forty-five (45) days from the date on which the Expert has been selected (or
such other period as the parties may agree or as set forth herein); and (ii)
establish a timetable for the making of submissions and replies.

10.25.
Waiver of Jury Trial and Punitive Damages.

Owner
and Manager each hereby absolutely, irrevocably and unconditionally waive trial
by jury and the right to claim punitive damages in any litigation, action,
claim, suit or proceeding, at law or in equity, arising out of or pertaining to
this Agreement or any other agreement, instrument or document entered into in
connection herewith.

ARTICLE XI
DEFINITION OF TERMS

11.01.
Definition of Terms.

The
following terms when used in this Agreement shall have the meanings indicated:

Accounting Fee shall mean a monthly
fee of One Thousand Five Hundred Fifty and No/100 Dollars ($1,550.00) payable
to Manager and pro-rated, as applicable, as provided in Section 3.04. The
Accounting Fee will be increased on each anniversary of the Effective Date by
five percent (5%) of the amount then in effect.

Accounting Period shall mean a
calendar month, except that the first Accounting Period shall begin on the
Effective Date and shall end on the last day of the calendar month in which the
Effective Date occurs.

Accounting Period Statement shall have
the meaning ascribed to it in Section 4.0l.A.

Affiliate shall mean, as to any
Person, any other Person that, directly or indirectly, controls, is controlled
by or is under common control with such Person. For purposes of this
definition, the term control (including the terms controlling, controlled
by and under common control with) of a Person means the possession, directly
or indirectly, of the power: (i) to vote more than fifty percent (50%) of the
voting stock or other beneficial interests of such Person; or (ii) to direct or
cause the direction of the management and policies of such Person, whether
through the Ownership of voting stock, by contract or otherwise.

Agreement shall mean this Management
Agreement between Owner and Manager, including the exhibits attached hereto.

Annual Operating Projection shall have
the meaning ascribed to it in Section 4.04.

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Annual Operating Statement shall have
the meaning set forth in Section 4.0l.B.

Available Cash Flow shall mean an
amount, with respect to each Fiscal Year or portion thereof during the Term,
equal to the excess, if any, of the Operating Profit over the Owners Priority.

Base Management Fee shall mean an
amount payable to Manager as a Deduction from Gross Revenues for all services
provided by Manager pursuant to this Agreement, except as otherwise expressly
provided herein. The Base Management Fee shall be three percent (3%) of Gross
Revenues.

Buildings shall mean the buildings and
improvements constituting that certain hotel more particularly described on Schedule
1 attached hereto and made a part hereof which is located on the Site.

Business Day shall mean any day other
than a Saturday, Sunday or legal holiday in the Commonwealth of Virginia or the
State of Colorado.

CC&Rs shall have the meaning
ascribed to it in Section 7.04.A.

Competitive Set shall mean the group
of hotels which are closest in geographical distance from the Hotel and which
are generally within the same hotel market segment as the Hotel. The initial
Competitive Set is identified on Schedule 1 attached hereto and made a
part hereof. If any such hotels, subsequent to the Effective Date, either
changes its chain affiliation or ceases to operate or otherwise ceases to reflect
the general criteria set forth in the first sentence of this definition, the
Competitive set shall be changed at the request of either Owner or Manager and
approval of both parties, such approval not to be unreasonably withheld,
conditioned or delayed so that it continues to satisfy the criteria set forth
in the first sentence of this definition. Any disagreements shall be resolved
by the Expert in accordance with Section 10.24.

Deductible Leases shall mean the lease
of the property management computer system for the Hotel and such other leases
as Owner and Manager may mutually agree will be Deductible Leases.

Deductions shall have the meaning
ascribed to it in the definition of Operating Profit.

Default shall mean the occurrence of
any event which, with the lapse of time, the giving of notice or both, would
constitute an Event of Default.

Effective Date shall have the meaning
ascribed to it in the Preamble.

Environmental Laws shall have the
meaning ascribed to it in Section 10.08.A.

Event of Default shall have the
meaning ascribed to it in Section 8.01.

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Expert shall mean an independent,
nationally recognized hotel consulting firm or individual who is qualified to
resolve the issue in question, and who is appointed in each instance by
agreement of the parties or, failing agreement, each party shall select one (1)
such nationally recognized consulting firm or individual and the two (2)
respective firms and/or individuals so selected shall select another such
nationally recognized consulting firm or individual to be the Expert. Each
party agrees that it shall not appoint an individual as an Expert hereunder if
the individual is as of the date of appointment, or prior to such date was, an
Affiliate of such party or employed by such party or its Affiliates, either
directly or as a consultant, in connection with any other matter. In the event
that either party calls for an Expert determination pursuant to the terms hereof,
the parties shall have ten (10) days from the date of such request to agree
upon an Expert and, if they fail to agree, each party shall have an additional
ten (10) days to make its respective selection of a firm or individual, and
within ten (10) days of such respective selections, the two (2) respective
firms and/or individuals so selected shall select another such nationally
recognized consulting firm or individual to be the Expert. If either party
fails to make its respective selection of a firm or individual within the ten
(10) day period provided for above, then the other partys selection shall be
the Expert. Also, if the two (2) respective firms and/or individuals so
selected shall fail to select a third nationally recognized consulting firm or
individual to be the Expert, then such Expert shall be appointed by the
American Arbitration Association and shall be a qualified person having at
least ten (10) years recent professional experience as to the subject matter in
question.

FF&E shall mean furniture,
furnishings, fixtures, soft goods, case goods, signage, audio-visual equipment,
kitchen appliances, vehicles, carpeting and equipment, including front desk and
back-of-the-house computer equipment, but shall not include Fixed Asset Supplies
or Software.

FF&E Lease means a lease of any
FF&E, which lease is properly capitalized for financial accounting
purposes.

Fiscal Year shall mean, initially, the
period beginning as of the Effective Date and ending at midnight on the
following December 31 and thereafter each calendar year during the Term. Any
partial Fiscal Year between the Effective Date and the commencement of the
first full Fiscal Year shall constitute a separate Fiscal Year. A partial
Fiscal Year between the end of the last full Fiscal Year and the Termination of
this Agreement shall also constitute a separate Fiscal Year. If Fiscal Year is
changed in the future, appropriate adjustment to this Agreements reporting and
accounting procedures shall be made; provided, however, that no such change or
adjustment shall alter the term of this Agreement or in any way reduce the
distributions of Operating Profit or other payments due hereunder except as may
otherwise be expressly agreed upon by the parties to this Agreement.

Fixed Asset Supplies shall mean items
included within Property and Equipment under the Uniform System of Accounts
including, but not limited to, linen, china, glassware, tableware, uniforms,
and similar items, whether used in connection with public space or Guest Rooms.

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Force Majeure shall mean acts of God,
acts of war, civil disturbance, governmental action (including the revocation
or refusal to grant licenses or permits, where such revocation or refusal is
not due to the fault of the party whose performance is to be excused for
reasons of Force Majeure), strikes, lockouts, fire, unavoidable casualties or
any other causes beyond the reasonable control of either party (excluding,
however, (i) lack of financing, or (ii) general economic and/or market
factors).

Foreclosure shall mean any exercise of
the remedies available to a Mortgagee, upon a default under the Qualified
Mortgage held by such Mortgagee, which results in a transfer of title to or
possession of the Hotel. The term foreclosure shall include, without
limitation, any one or more of the following events, if they occur in
connection with a default under a Qualified Mortgage: (i) a transfer by
judicial or non-judicial foreclosure; (ii) a transfer by deed in lieu of
foreclosure; (iii) the appointment by a court of a receiver to assume
possession of the Hotel; (iv) a transfer of either ownership or control of the
Owner, by exercise of a stock pledge or otherwise; (v) if title to the Hotel is
held by a tenant under a ground lease, an assignment of the tenants interest
in such ground lease; or (vi) any similar judicial or non-judicial exercise of
the remedies held by the Mortgagee resulting in actual ownership or control of
the Hotel by such Mortgagee or its designee.

Franchise Agreement shall mean the
Franchise License Agreement described on Schedule 1 attached hereto and
made a part hereof, as the same may be amended or supplemented from time to
time.

Gross Revenues shall mean all revenues
and receipts of every kind derived from operating the Hotel and all departments
and parts thereof, including, but not limited to: income (from both cash and
credit transactions) from rental of Guest Rooms, telephone charges, stores,
cell phone sites, offices, exhibit or sales space of every kind; license, lease
and concession fees and rentals (not including gross receipts of licensees,
lessees and concessionaires); income from vending machines; income from
parking; health club membership fees; food and beverage sales; wholesale and
retail sales of merchandise; service charges; and proceeds, if any, from
business interruption or other loss of income insurance; provided, however,
that Gross Revenues shall not include the following: gratuities to employees of
the Hotel; federal, state or municipal excise, sales or use taxes or any other
taxes collected directly from patrons or guests or included as part of the
sales price of any goods or services; proceeds from the sale of FF&E;
interest received or accrued with respect to the funds in the Reserve or the
other operating accounts of the Hotel; any refunds, rebates, discounts and
credits of a similar nature, given, paid or returned in the course of obtaining
Gross Revenues or components thereof; insurance proceeds (other than proceeds
from business interruption or other loss of income insurance); condemnation
proceeds (other than for a temporary taking); or any proceeds from any Sale of
the Hotel or from the financing or refinancing of any debt encumbering the Hotel.

Guest Room shall mean a
separately-keyed lodging unit in the Hotel.

Guest Room Revenues shall mean the
portion of Gross Revenues of the Hotel which is attributed to the rental of
Guest Rooms.

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Hazardous Materials shall have the
meaning ascribed to it in Section 10.08.A.

Hotel shall mean the Site together
with the Buildings and all other improvements construed or to be constructed on
the Site pursuant to this Agreement, all FF&E and Fixed Asset Supplies
installed or located on the Site or in the Buildings, and all easements or
other appurtenant rights thereto.

Hotel
Lease shall have the meaning ascribed to it in Recital B.

Impact Fees shall have the meaning
ascribed to it in Section 4.07.A.

Impositions shall have the meaning
ascribed to it in Section 4.07.

Incentive Management Fee shall mean an
amount payable to Manager, pursuant to Section 3.01 and Section 4.01, that is
equal to twenty percent (20%) of Available Cash Flow in any Fiscal Year (or
portion thereof) after payment to Owner of Owners Priority (including, without
limitation, all accrued and unpaid Owners Priority).

Initial Term shall have the meaning
ascribed to it in Section 2.01.

Inventories shall mean Inventories
as defined in the Uniform System of Accounts, such as, but not limited to,
provisions in storerooms, refrigerators, pantries and kitchens; beverages in
wine cellars and bars; other merchandise intended for sale; fuel; mechanical
supplies; stationery; and other expensed supplies and similar items.

Landlord
shall mean the Person identified as Landlord on Schedule 1 attached
hereto and made part hereof.

Legal Requirement(s) shall mean any
federal, state or local law, code, rule, ordinance, regulation or order of any
governmental authority or agency having jurisdiction over the business or
operation of the Hotel or the matters which are the subject of this Agreement,
including, without limitation, the following: (i) any building, zoning or use
laws, ordinances, regulations or orders; and (ii) Environmental Laws.

Litigation shall mean: (i) any cause
of action (including, without limitation, bankruptcy or other debtor/creditor
proceedings) commenced in a federal, state or local court; or (ii) any claim
brought before an administrative agency or body (for example, without
limitation, employment discrimination claims).

Manager shall have the meaning
ascribed to it in the Preamble hereto or shall mean any permitted successor or
assign, as applicable.

Managers Liability and Managers Liabilities shall have the
meanings ascribed to such terms in Section 4.03.B.

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Minor Casualty shall mean any fire or
other casualty that results in damage to the Hotel and/or its contents, the
repair cost for which is less than fifteen percent (15%) of the replacement
cost of the Hotel, as reasonably determined by Manager and substantiated
estimates prepared by independent third party general contractors or
consultants reasonably selected by Manager and reasonably approved by Owner.

Mortgage shall mean any mortgage
creating a lien on the Hotel.

Mortgagee shall mean the holder of any
Qualified Mortgage encumbering the Hotel or the Site.

Operating Accounts shall have the
ascribed to it in Section 4.03.A.

Operating Loss shall mean a negative
Operating Profit.

Operating Profit shall mean the excess
of Gross Revenues over the following deductions (Deductions) incurred
by Manager, on behalf of Owner, in operating the Hotel:

1.
the cost of sales, including, without limitation, costs associated with the
employment, management and termination of Hotel employees (including hiring and
recruitment fees and expenses), the costs of moving the Hotel General Manager
and Director of Sales to the area in which the Hotel is located at the
commencement of their employment at the Hotel (except to the extent Manager is
required to reimburse Owner for such costs as provided in Section 1.03),
compensation, benefits, employment taxes, training and severance payments and
other costs related to Hotel employees, provided that the foregoing costs shall
not include salaries and other employee costs of executive personnel of Manager
who do not work at the Hotel on a regular basis, which salaries and costs shall
be Managers Liability;

2.
departmental expenses incurred at departments within the Hotel; administrative
and general expenses; the cost of marketing incurred by the Hotel; advertising
and business promotion incurred by the Hotel; heat, light, and power; computer
line charges; and routine repairs, maintenance and minor alterations treated as
Deductions under Section 5.01;

3.
the cost of Inventories and Fixed Asset Supplies consumed in the operation of
the Hotel;

4.
a reasonable reserve for uncollectible accounts receivable as reasonably
determined by Manager with the concurrence of Owner;

5.
all costs and fees of independent professionals or other third parties who are
retained by Manager with the concurrence of Owner to perform services required
or permitted hereunder;

6.
all costs and fees of technical consultants and operational experts who are
retained or employed by Manager in accordance with the approved Annual
Operating Projection with the concurrence of Owner for specialized services
(including, without limitation, quality

40

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assurance
inspectors) and the reasonable cost of attendance by employees of the Hotel at
training and manpower development programs sponsored by Manager, provided the
costs thereof are included in the approved Annual Operating Projection or Owner
has approved attendance at programs and the cost thereof;

7.
the Base Management Fee;

8.
all Monthly Royalty Fees, Monthly Program Fees, and other similar fees
payable to the Franchisor under the Franchise Agreement;

9.
insurance costs and expenses as provided in Section 6.04;

10.
taxes, if any, payable by or assessed against Manager related to this Agreement
or to Managers operation of the Hotel and Impositions (exclusive of Managers
income taxes or franchise taxes and any other similar taxes payable by Manager
and all other taxes, assessments and payments excluded from the definition of
Impositions);

11.
transfers to the Reserve required pursuant to Section 5.02;

12.
any costs paid by Manager pursuant to the Franchise Agreement;

13.
payments pursuant to Deductible Leases;

14.
the per diem (or hourly, if charged on that basis by Manager to hotels it
operates) charge for personnel of Manager assigned to special projects for the
Hotel approved by Owner;

15.
travel expenses of headquarters and regional personnel of Manager supervising
the Hotel or providing specialized services to the Hotel and of Hotel employees
for attendance at training sessions, in connection with marketing of the Hotel
or other purposes related to Managers performance of its obligations under
this Agreement;

16.
the allocated costs of the centralized services provided to the Hotel pursuant
to Section 1.10; and

17.
to the extent included in the approved Annual Operating Projection or approved
in advance by Owner, such other costs and expenses incurred by Manager as are
specifically provided for elsewhere in this Agreement or are otherwise
reasonably necessary for the proper and efficient operation of the Hotel,
including without limitation, travel expenses or supervisory personnel of
Manager incurred in connection with managing the Hotel.

The
term Deductions shall not
include (a) debt service payments pursuant to a Qualified Mortgage, or (b)
rental payments under any Hotel Lease, all of which shall be paid by Owner from
its own funds, (c) FF&E Leases (other than Deductible Leases), which
FF&E Leases (if any) shall be funded from the Reserve, (d) expenses
incurred for improvements under the Hotel property improvement plan that are
funded from the PIP Escrow, or (e) other capital

41

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expenditures,
determined in accordance with generally accepted accounting principles that are
funded from the Reserve or that increase Owners Priority.

Owner shall have the meaning ascribed
to it in the Preamble or shall mean any successor or assign, as applicable.

Owners Priority shall mean an amount
up to, but not in excess of the amount shown as Owners Priority on Schedule
1 attached hereto and made a part hereof, per Fiscal Year (prorated for any
partial Fiscal Year). Owners Priority for each Fiscal Year shall be paid to
the extent of Operating Profit available in such Fiscal Year, as provided in
Section 3.02 of this Agreement. In the event of any capital expenditures made
with respect to the Hotel in accordance with the approved Annual Operating
Projection after the Effective Date that are in excess of the Reserve, the
Owners Priority shall be increased (but not decreased) for the remaining
portion of the Fiscal Year in which such capital expenditures are made and all
subsequent Fiscal Years by an amount equal to ten and one-half percent (10.5%)
of such capital expenditures..

Person means an individual (and the
heirs, executors, administrators, or other legal representatives of an
individual), a partnership, a corporation, limited liability company, a
government or any department or agency thereof, a trustee, a trust and any
unincorporated organization.

Prime Rate shall mean the prime rate
of interest announced from time to time in the Money Rates section of The
Wall Street Journal.

Prudent Industry Practice shall mean
the customary practices of the hotel industry in the United States for hotels
comparable to the Hotel. To the extent inconsistent with the requirements of
the Franchise Agreement, such practices shall be conformed to the requirements
of the Franchise Agreement for purposes of this Agreement.

Qualified Mortgage shall mean a
Mortgage securing a loan the original principal amount of which is not greater
than seventy-five percent (75%) of the fair market value of the Hotel.

Reserve shall have the meaning
ascribed to it in Section 5.02A.

Revenue Data Publication shall mean
Smiths STAR Report, a monthly publication distributed by Smith Travel
Research, Inc. of Gallatin, Tennessee, or an alternative source, reasonably
satisfactory to both parties, of data regarding the Revenue Per Available Room
of hotels in the general trade area of the Hotel. If such Smiths STAR Report
is discontinued in the future, or ceases (in the reasonable opinion of either
Owner or Manager) to be a satisfactory source of data regarding the Revenue Per
Available Room of various hotels in the general trade area of the Hotel, Owner
and Manager shall select an alternative source for such data.

Revenue Index shall mean that fraction
that is equal to (a) the Revenue Per Available Room for the Hotel divided by
(b) the average Revenue Per Available Room for the hotels in the

42

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Competitive
Set, as set forth in the Revenue Data Publication. Appropriate adjustments to
the Revenue Index acceptable to Owner shall be made in the event of a major
renovation of the Hotel.

Revenue Index Threshold shall mean the
number shown on Schedule 1 attached hereto and made a part hereof. However,
if the entry of a new hotel into the Competitive Set (or the removal of a hotel
from the Competitive Set) causes significant variations in the Revenue Index
that do not reflect the Hotels true position in the relevant market,
appropriate adjustments shall be made to the Revenue Index Threshold by mutual
consent of Owner and Manager each acting in good faith.

Revenue Per Available Room shall mean
(i) the term revenue per available room as defined by the Revenue Data
Publication, or (ii) if the Revenue Data Publication is no longer being used
(as more particularly set forth in the definition of Revenue Data
Publication), the aggregate gross room revenues of the hotel in question for a
given period of time divided by the total room nights for such period. If
clause (ii) of the preceding sentence is being used, a room shall be an
available hotel guestroom that is keyed as a single unit.

Routine Capital Expenditures shall
mean certain routine, non-major expenditures which are classified as capital
expenditures under generally-accepted accounting principles, and which will be
funded from the Reserve (pursuant to Section 5.02). Routine Capital
Expenditures consist of the following types of expenditures: exterior and
interior painting; resurfacing building walls and floors; resurfacing parking
areas; and miscellaneous similar expenditures. Routine Capital Expenditures are
not non-routine capital expenditures or major repairs or major alterations or
improvements.

Sale of the Hotel shall mean any sale,
assignment, transfer or other disposition, for value or otherwise, voluntary or
involuntary, of the Site and/or the Hotel or any interest therein, in whole or
part. For purposes of this Agreement, a Sale of the Hotel shall also include a
lease (or sublease) of all or substantially all of the Hotel or Site or any
interest therein.

SEC Filing Period shall mean such
period of time (not to exceed thirty (30) days) after the close of each Fiscal
Year within which Owner must receive the Annual Operating Statement from
Manager with respect to such Fiscal Year in order for Owner to have a
reasonable period of time within which to prepare and make all required filings
with the Securities and Exchange Commission and other applicable governmental
agencies.

Site shall mean the real property
described on Exhibit A attached hereto and made a part hereof.

Software shall mean all computer
software and accompanying documentation (including all future upgrades,
enhancements, additions, substitutions and modifications thereof), other than
computer software which is generally commercially available, which are used by
Manager in connection with operating or otherwise providing services to the
Hotel.

Specially Designated National or Blocked Person
shall mean (i) a person designated by the U.S. Department of Treasurys Office
of Foreign Assets Control from time to time as a

43

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specially
designated national or blocked person or similar status, (ii) a person
described in Section 1 of U.S. Executive Order 13224 issued on September 23,
2001, or (iii) a person otherwise identified by government or legal authority
as a person with whom Manager or its Affiliates are prohibited from transacting
business. Currently, a listing of such designations and the text of the
Executive Order are published under the internet website address
www.ustreas.gov/offices/enforcement/ofac.

Subordination Agreement shall have the
meaning ascribed to it in Section 7.03.

Subsequent Owners shall have the
meaning ascribed to it in Section 7.03.A.

System shall have the meaning set
forth in the Franchise Agreement.

System Standards shall mean any one or
more (as the context requires) of the following three (3) categories of
standards: (i) operational standards (for example, services offered to guests,
quality of food and beverages, cleanliness, staffing and employee compensation
and benefits, frequent traveler programs and other similar programs; (ii)
physical standards (for example, quality of the hotel, FF&E, and Fixed
Asset Supplies, frequency of FF&E replacements, etc.); and (iii) technology
standards (for example, those relating to software, hardware,
telecommunications, systems security and information technology); each of such
standards shall be the standard which is generally prevailing or in the process
of being implemented at other hotels in the System represented by the Franchise
Agreement.

Term shall have the meaning ascribed
to it in Section 2.01.

Termination shall mean the expiration
or sooner cessation of this Agreement.

Trade Name shall mean any name,
whether informal (such as a fictitious name or d/b/a) or formal (such as the
full legal name of a corporation or partnership) which is used to identify an
entity.

Uniform System of Accounts shall mean
the Uniform System of Accounts for the Lodging Industry, Ninth Revised Edition,
1996, as published by the Educational Institute of the American Hotel &
Motel Association, as revised.

WARN Act shall mean the Worker
Adjustment and Retraining Notification Act, 29 U.S.C. 2101 et seq.

Working Capital shall mean funds that
are used in the day-to-day operation of the business of the Hotel, including,
without limitation, amounts sufficient for the maintenance of change and petty
cash funds, amounts deposited in operating bank accounts, receivables, amounts
deposited in payroll accounts, prepaid expenses and funds required to maintain
Inventories, less accounts payable and accrued current liabilities. The initial
Working Capital deposited by Owner as of the Effective Date shall be Forty-Five
Thousand and No/100 Dollars ($45,000.00).

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IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
under seal as of the day and year first written above.

| |  |                                        | 
| |  | -------------------------------------- | 
| |  | OWNER:                                 | 
| |  |                                        | 
| |  | APPLE TEN
 HOSPITALTY MANAGEMENT, INC. | 

| |  |     |                    | 
| |  | --- | ------------------ | 
| |  | By: | /s/ David
 Buckley | 
| |  |     |                    | 

| |  |       |                | 
| |  | ----- | -------------- | 
| |  | Name: | David
 Buckley | 
| |  |       |                | 

| |  |        |                 | 
| |  | ------ | --------------- | 
| |  | Title: | Vice
 President | 
| |  |        |                 | 

S - 1  Management Agreement

---



| |  |                                                      |                  | 
| |  | ---------------------------------------------------- | ---------------- | 
| |  | MANAGER:                                             |                 
|
| |  | STONEBRIDGE
 REALTY ADVISORS, INC.,                  |                 
| |  | a Colorado
 corporation, d/b/a STONEBRIDGE COMPANIES |                 
| |  |                                                      |                  | 
| |  | By: /s/                                              | Navin C.
 Dimond | 
| |  |                                                      |                  | 

| |  |       |                  | 
| |  | ----- | ---------------- | 
| |  | Name: | Navin C.
 Dimond | 
| |  |       |                  | 

| |  |        |                    | 
| |  | ------ | ------------------ | 
| |  | Title: | President
 and CEO | 
| |  |        |                    | 

S - 2  Management Agreement

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SCHEDULE 1

HOTEL SPECIFIC DATA

1. Description
of Hotel: That certain hotel known as the Hilton Garden Inn Denver
Downtown, located at 1400 Welton Street, Denver, Colorado 80202, containing 221
Guest Rooms, a lobby, meeting rooms, administrative offices, restaurant,
parking and certain amenities and related facilities located on the Site,
including the following:

| |                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------
| | a. Number
 of Guest Rooms: 221                                                                                                                        
| |                                                                                                                                                       
| | b. Other
 Improvements/Amenities: Approximately 3,239 sq. ft. aggregate meeting
 room space; indoor swimming pool, exercise room, spa, business center

2. Franchise
Agreement: Hilton Garden Inn  Franchise License Agreement, dated as of the
date of this Management Agreement, between Hilton Garden Inns LLC as licensor,
and Owner, as licensee.

3. Funding
of Reserve for Repairs, Maintenance and Replacements: During the period
from the Effective Date to the expiration or earlier termination of this
Agreement, Manager shall transfer into the Reserve an amount equal to four
percent (4%) of Gross Revenues for each such Accounting Period.

4. Competitive
Set:

| |                
| | ---------------
| | Crowne Plaza   
| | Magnolia       
| | Courtyard      
| | Hampton Inn    
| | Curtis Hotel   
| | Embassy
 Suites

5. Landlord:
Apple Ten Hospitality Ownership, Inc., a Virginia corporation

6. Owners
Priority: Six Million One Hundred Forty-Two Thousand Five Hundred and
No/100 Dollars ($6,142,500.00)

7. Revenue
Index Threshold: 1.0

8. Excluded
Hotel: Potential Homewood Suites by Hilton

Schedule 1  p. 1

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EXHIBIT A

LEGAL DESCRIPTION OF SITE

LOTS 10
THROUGH 16, BLOCK 172, EAST DENVER, CITY AND COUNTY OF DENVER, STATE OF
COLORADO.

Exhibit A  p. 1

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EXHIBIT B

REPRESENTATIONS AND WARRANTIES

Manager
hereby represents and warrants to Owner as set forth below.

(a)
Authority; No Conflicts. Manager is a corporation duly formed, validly
existing and in good standing in the State of Colorado. Manager has obtained
all necessary consents to enter into and perform this Agreement and is fully
authorized to enter into and perform its obligations under this Agreement. No
consent or approval of any person, entity or governmental authority is required
for the execution, delivery or performance by Manager of this Agreement, and
this Agreement is hereby binding and enforceable against Manager. Neither the
execution nor the performance of, or compliance with, this Agreement by Manager
has resulted, or will result, in any violation of, or default under, or
acceleration of, any obligation under any existing corporate charter, certificate
of incorporation, bylaw, articles of organization, limited liability company
agreement or regulations, partnership agreement or other organizational
documents and under any, mortgage indenture, lien agreement, promissory note,
contract, or permit, or any judgment, decree, order, restrictive covenant,
statute, rule or regulation, applicable to Manager or to the Hotel.

(b)
Bankruptcy. Neither Manager nor any of its Affiliates, is insolvent or
the subject of any bankruptcy proceeding, receivership proceeding or other
insolvency, dissolution, reorganization or similar proceeding.

(c)
Employees. All employees employed at the Hotel are the employees of
Manager or an Affiliate of Manager identified to Owner. To the best of
Managers knowledge, there are no (i) unions organized at the Hotel, (ii) union
organizing attempts, strikes, organized work stoppages or slow downs, or any
other labor disputes pending or threatened with respect to any of the employees
at the Hotel, or (iii) collective bargaining or other labor agreements to which
Manager or the Manager or the Hotel is bound with respect to any employees
employed at the Hotel.

Exhibit B  p. 1

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