COLUMBIA, SC (TPS)

Exhibit 10.17

MANAGEMENT AGREEMENT

by and between

NEWPORT
COLUMBIA MANAGEMENT, LLC

as MANAGER

and

APPLE
TEN HOSPITALITY MANAGEMENT, INC.

as OWNER

Dated as of March 25, 2011

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COLUMBIA, SC (TPS)

Table of Contents

|            |       |                                           |                                                                          |    |     
|----------- | ----- | ----------------------------------------- | ------------------------------------------------------------------------ | -- | ----
|            |       |                                           |                                                                          |    | Page
|            |       |                                           |                                                                          |    |     
|            |       |                                           |                                                                          |    |     
|ARTICLE I   |       | APPOINTMENT OF MANAGER                    |                                                                          | 1 
|            |       |                                           |                                                                          |   
|            | 1.01. |                                           | Appointment                                                              |    | 1   
|            |       |                                           |                                                                          |    |     
|            | 1.02. |                                           | Management
 of the Hotel                                                 |    | 1   
|            |       |                                           |                                                                          |    |     
|            | 1.03. |                                           | Employees                                                                |    | 3   
|            |       |                                           |                                                                          |    |     
|            | 1.04. |                                           | Owners
 Right to Inspect                                                |    | 4   
|            |       |                                           |                                                                          |    |     
|            | 1.05. |                                           | Regular
 Meetings                                                        |    | 4   
|            |       |                                           |                                                                          |    |     
|            | 1.06. |                                           | System
 Standards                                                        |    | 4   
|            |       |                                           |                                                                          |    |     
|            | 1.07. |                                           | Limitations
 on Managers Authority                                      |    | 4   
|            |       |                                           |                                                                          |    |     
|            | 1.08. |                                           | Representations
 and Warranties of Manager                               |    | 5   
|            |       |                                           |                                                                          |    |     
|ARTICLE II  |       | TERM                                      |                                                                          | 5 
|            |       |                                           |                                                                          |   
|            | 2.01. |                                           | Term                                                                     |    | 5   
|            |       |                                           |                                                                          |    |     
|            | 2.02. |                                           | Performance
 Termination                                                 |    | 5   
|            |       |                                           |                                                                          |    |     
|ARTICLE III |       | COMPENSATION OF MANAGER                   |                                                                          | 6 
|            |       |                                           |                                                                          |   
|            | 3.01. |                                           | Management
 Fees                                                         |    | 6   
|            |       |                                           |                                                                          |    |     
|            | 3.02. |                                           | Operating
 Profit                                                        |    | 6   
|            |       |                                           |                                                                          |    |     
|            | 3.03. |                                           | Reimbursables                                                            |    | 7   
|            |       |                                           |                                                                          |    |     
|            | 3.04. |                                           | Termination
 Fee                                                         |    | 7   
|            |       |                                           |                                                                          |    |     
|ARTICLE IV  |       | ACCOUNTING, BOOKKEEPING AND BANK ACCOUNTS |                                                                          | 8 
|            |       |                                           |                                                                          |   
|            | 4.01. |                                           | Accounting,
 Distributions and Annual Reconciliation                     |    | 8   
|            |       |                                           |                                                                          |    |     
|            | 4.02. |                                           | Books and
 Records                                                       |    | 9   
|            |       |                                           |                                                                          |    |     
|            | 4.03. |                                           | Accounts,
 Expenditures                                                  |    | 10  
|            |       |                                           |                                                                          |    |     
|            | 4.04. |                                           | Annual
 Operating Projection                                             |    | 10  
|            |       |                                           |                                                                          |    |     
|            | 4.05. |                                           | Working
 Capital                                                         |    | 11  
|            |       |                                           |                                                                          |    |     
|            | 4.06. |                                           | Fixed Asset
 Supplies                                                    |    | 11  
|            |       |                                           |                                                                          |    |     
|            | 4.07. |                                           | Real Estate
 and Personal Property Taxes                                 |    | 11  
|            |       |                                           |                                                                          |    |     
|            | 4.08. |                                           | Sarbanes-Oxley
 Certification                                            |    | 12  
|            |       |                                           |                                                                          |    |     
|ARTICLE V   |       | REPAIRS, MAINTENANCE AND REPLACEMENTS     |                                                                          | 13
|            |       |                                           |                                                                          |   
|            | 5.01. |                                           | Repairs and
 Maintenance to be Paid from Gross Revenues                  |    | 13  
|            |       |                                           |                                                                          |    |     
|            | 5.02. |                                           | Repairs,
 Maintenance and Equipment Replacements to be Paid from Reserve |    | 14  

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|             |        |                     |                                       |    |   
|------------ | ------ | ------------------- | ------------------------------------- | -- | --
|ARTICLE VI   |        | INSURANCE           |                                       | 15
|             |        |                     |                                       |   
|             | 6.01.  |                     | Property
 Insurance                   |    | 15
|             |        |                     |                                       |    |   
|             | 6.02.  |                     | Operational
 Insurance                |    | 15
|             |        |                     |                                       |    |   
|             | 6.03.  |                     | Coverage                              |    | 16
|             |        |                     |                                       |    |   
|             | 6.04.  |                     | Costs and
 Expenses                   |    | 16
|             |        |                     |                                       |    |   
|             | 6.05.  |                     | Owners
 Right to Provide Insurance   |    | 17
|             |        |                     |                                       |    |   
|ARTICLE VII  |        | DAMAGE AND REPAIR   |                                       | 17
|             |        |                     |                                       |   
|             | 7.01.  |                     | Damage and
 Repair                    |    | 17
|             |        |                     |                                       |    |   
|             | 7.02.  |                     | Condemnation                          |    | 18
|             |        |                     |                                       |    |   
|             | 7.03.  |                     | Business
 Interruption                |    | 18
|             |        |                     |                                       |    |   
|             | 7.04.  |                     | Subordination
 to Mortgage            |    | 18
|             |        |                     |                                       |    |   
|             | 7.05.  |                     | Liens;
 Credit                        |    | 19
|             |        |                     |                                       |    |   
|ARTICLE VIII |        | DEFAULTS            |                                       | 19
|             |        |                     |                                       |   
|             | 8.01.  |                     | Events of
 Default                    |    | 19
|             |        |                     |                                       |    |   
|             | 8.02.  |                     | Remedies                              |    | 20
|             |        |                     |                                       |    |   
|             | 8.03.  |                     | Additional
 Remedies                  |    | 20
|             |        |                     |                                       |    |   
|ARTICLE IX   |        | ASSIGNMENT AND SALE |                                       | 21
|             |        |                     |                                       |   
|             | 9.01.  |                     | Assignment                            |    | 21
|             |        |                     |                                       |    |   
|             | 9.02.  |                     | Sale of the
 Hotel                    |    | 21
|             |        |                     |                                       |    |   
|ARTICLE X    |        | MISCELLANEOUS       |                                       | 22
|             |        |                     |                                       |   
|             | 10.01. |                     | Right to
 Make Agreement              |    | 22
|             |        |                     |                                       |    |   
|             | 10.02. |                     | Consents and
 Cooperation             |    | 22
|             |        |                     |                                       |    |   
|             | 10.03. |                     | Relationship                          |    | 22
|             |        |                     |                                       |    |   
|             | 10.04. |                     | Applicable
 Law; Jurisdiction         |    | 23
|             |        |                     |                                       |    |   
|             | 10.05. |                     | Recordation                           |    | 23
|             |        |                     |                                       |    |   
|             | 10.06. |                     | Headings                              |    | 23
|             |        |                     |                                       |    |   
|             | 10.07. |                     | Notices                               |    | 23
|             |        |                     |                                       |    |   
|             | 10.08. |                     | Environmental
 Matters                |    | 24
|             |        |                     |                                       |    |   
|             | 10.09. |                     | Confidentiality;
 Projections         |    | 25
|             |        |                     |                                       |    |   
|             | 10.10. |                     | Indemnification                       |    | 26
|             |        |                     |                                       |    |   
|             | 10.11. |                     | Actions to
 be Taken Upon Termination |    | 27
|             |        |                     |                                       |    |   
|             | 10.12. |                     | Waiver                                |    | 29
|             |        |                     |                                       |    |   
|             | 10.13. |                     | Partial
 Invalidity                   |    | 29

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|            |        |                         |                                                                          |    |    | 
|----------- | ------ | ----------------------- | ------------------------------------------------------------------------ | -- | -- | 
|            | 10.14. |                         | Survival                                                                 |    | 29
|            |        |                         |                                                                          |    |   
|            | 10.15. |                         | Negotiation
 of Agreement                                                |    | 29
|            |        |                         |                                                                          |    |   
|            | 10.16. |                         | Estoppel
 Certificates                                                   |    | 29
|            |        |                         |                                                                          |    |   
|            | 10.17. |                         | Affiliates                                                               |    | 30
|            |        |                         |                                                                          |    |   
|            | 10.18. |                         | Blocked
 Persons or Entities                                             |    | 30
|            |        |                         |                                                                          |    |   
|            | 10.19. |                         | Restrictions
 on Operating the Hotel in Accordance with System Standards |    | 30
|            |        |                         |                                                                          |    |   
|            | 10.20. |                         | Counterparts                                                             |    | 30
|            |        |                         |                                                                          |    |   
|            | 10.21. |                         | Entire
 Agreement                                                        |    | 31
|            |        |                         |                                                                          |    |   
|            | 10.22. |                         | Franchise
 Agreement                                                     |    | 31
|            |        |                         |                                                                          |    |   
|            | 10.23. |                         | Operation of
 Other Hotels                                               |    | 31
|            |        |                         |                                                                          |    |   
|            | 10.24. |                         | Waiver of
 Jury Trial and Punitive Damages                               |    | 32
|            |        |                         |                                                                          |    |   
|            | 10.25. |                         | Termination
 of the Hotel Lease                                          |    | 32
|            |        |                         |                                                                          |    |   
|            | 10.26. |                         | All Payments
 Subject to the Availability of Funds                       |    | 32
|            |        |                         |                                                                          |    |   
|ARTICLE XI  |        | DEFINITION OF TERMS     |                                                                          | 32
|            |        |                         |                                                                          |   
|            | 11.01. |                         | Definition
 of Terms                                                     |    | 32
|            |        |                         |                                                                          |    |   
|ARTICLE XII |        | SUPPLEMENTAL PROVISIONS |                                                                          | 41
|            |        |                         |                                                                          |    |   
|Schedule 1  |        | -                       | Hotel
 Specific Data                                                     |    |   
|Schedule 2  |        | -                       | Supplemental
 Provisions                                                 |    |   
|Exhibit A   |        | -                       | Legal
 Description of Site                                               |    |   

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MANAGEMENT AGREEMENT

THIS
MANAGEMENT AGREEMENT (Agreement) is executed as of the 25th
day of March, 2011 (Effective Date), byAPPLE TEN
HOSPITALITY MANAGEMENT, INC., a Virginia corporation (Owner),
with a mailing address at c/o Apple REIT Companies, 814 E. Main Street,
Richmond, Virginia 23219, Attention: Krissy Gathright, andNEWPORT COLUMBIA MANAGEMENT, LLC,
a Virginia limited liability company (Manager), with a mailing address at
c/o 4290 New Town Avenue, Williamsburg, Virginia 23188.

A.
The party identified as the Landlord in Schedule 1 attached hereto (Landlord)
is the owner of the hotel identified in Schedule 1, as more particularly
described in the definition of Hotel in Section 11.01 hereof.

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.

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.

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):

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1.
Recruit, employ, relocate, manage, supervise, direct and discharge all
employees at the Hotel and maintain adequate staff, consistent with Prudent
Industry Practices and the Annual Operating Projection, to carry out its duties
under this Agreement.

2.
Establish prices, rates and charges for services provided in the Hotel,
including Guest Room rates, subject to Owners prior approval or as set forth
in the Annual Operating Projection.

3.
Establish and revise, as necessary, administrative policies and procedures,
including employment policies and procedures and policies and procedures 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 and
otherwise incur customary and reasonable expenses in the operation of the
Hotel, subject to the approved Annual Operating Projection.

6.
Prepare and deliver Annual Operating Projections, Accounting Period Statements,
Annual Operating Statements, 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, 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 diligence and efforts to
obtain and keep same in full force and effect).

10.
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 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 Mortgage.

11.
At the direction and with the concurrence of Owner, arrange for and supervise
public relations and advertising and prepare marketing plans.

12.
Negotiate and enter into, on behalf of Owner, service contracts and other third
party agreements required in the ordinary course of operating the Hotel,
provided that each

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such
contract or agreement that requires expenditures in excess of $5,000 or is not
terminable without penalty or fee must first be approved in advance by Owner.

13.
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 in the Franchise Agreement).

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 for
each item or $50,000 in the aggregate for all such items in any 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.

C.
Manager shall comply with and abide by all applicable Legal Requirements
pertaining to its operation of the Hotel. Landlord or Owner 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 paid from Gross
Revenues as Deductions. Owner or Landlord, as applicable, shall indemnify and
hold Manager harmless from any loss, claim, fees or expenses (including
reasonable attorneys fees) arising from the noncompliance with any Legal
Requirement that Owner or Landlord chooses to contest or as to which Owner does
not fund the cost of compliance.

1.03.
Employees

All personnel employed at the Hotel shall at all times be the employees
of Manager and not the employees of Owner. Manager shall 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

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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 or termination of the persons who occupy
the position of General Manager for the Hotel and (ii) 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. Owner
shall not pay for the relocation costs of any employees except for the cost of
relocating the General Manager; provided, however, that (i) the relocation
costs for the General Manager shall be subject to Owners prior approval, which
approval shall not be unreasonably withheld or delayed, and (ii) Manager shall
reimburse Owner for the costs (including relocation costs) of hiring and
training General Managers who are employed at the Hotel for less than one (1)
year and are transferred or relocated except to a hotel owned by Owner or an
Affiliate of Owner. As is consistent with Prudent Industry Practices, Manager
shall be responsible and liable for all acts or omissions of the personnel
employed at the Hotel and all persons managing such employees.

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 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. Manager shall be represented at such meetings by the
General Manager of the Hotel and such other personnel as the Manager and/or
Owner may deem appropriate. The purpose of the meetings shall be, inter alia,
to discuss the performance of the Hotel and other related issues, including any
variations from the 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

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 Ten Thousand
Dollars ($10,000); (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
Twenty-five Thousand Dollars ($25,000) 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

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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.

1.08.
Representations and Warranties of Manager. Manager hereby represents and warrants to Owner as
follows:

A.
Authority; No Conflicts. Manager is a limited liability company duly
formed, validly existing and in good standing in the state identified in Schedule
1. 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 of Manager 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 best of Managers knowledge, 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.

ARTICLE
II
TERM

2.01.
Term.

The Term
of this Agreement shall begin on the Effective Date and shall continue until
the expiration date identified in Schedule 1. The Term will be
automatically renewed for up to two (2) one-year periods unless either party
provides notice not less than one hundred twenty (120) days prior to the
expiration of the Term or the initial renewal Term, as the case may be, in
which case this Agreement shall terminate as of the last day of the Term or the
initial renewal term, as applicable. Notwithstanding the foregoing, Manager or
Owner shall have the option to terminate this Agreement at any time from and
after the date that is one hundred eighty (180) days prior to the expiration of
the initial Term, with or without cause, by giving the other party not less
than one hundred eighty (180) days prior written notice of its election to
terminate.

2.02.
Performance Termination.

A.
Owner shall have the option to terminate this Agreement following any
Performance Termination Period with respect to which the following occurs:

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1.
The Operating Profit for the Performance Termination Period is less than the
Performance Termination Threshold; or

2.
The Revenue Index of the Hotel during the Performance Termination Period is
less than the Revenue Index Threshold for such Performance Termination Period.

Owner shall
exercise such option to terminate by serving written notice thereof on Manager
no later than sixty (60) days after Owners receipt of the last Accounting
Period Statement for Performance Termination Period, 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. Notwithstanding anything contained herein to the contrary, Manager at
its option may elect to void such Termination by so notifying Owner within such
sixty (60) day period; provided, however, that the amount that was necessary to
have achieved the Performance Termination Threshold or Revenue Index Threshold,
as applicable (the Deficit Amount) shall be made up to Owner by either
(i) Managers paying the Deficit Amount to Owner within ten (10) days after
such 60-day period (the Cure Payment) or (ii) offsetting
the Deficit Amount against the Base Management Fees, the Incentive Management
Fees and/or other amounts or reimbursements payable to Manager under this
Agreement, as Owner may direct.

B.
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.

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
except as otherwise provided in this Agreement; plus

B.
the Incentive Management Fee but only to the extent of available Operating
Profit after payment of 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.
An amount up to the maximum amount of Owners Priority shall be paid to Owner;

2.
The Incentive Management Fee shall be paid to Manager; and

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3.
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 and shall not be payable in any subsequent
Fiscal Year. Notwithstanding anything in this Agreement to the contrary,
Manager acknowledges and agrees that Incentive Management Fees are only payable
(i) annually within thirty (30) days after Owners receipt and acceptance of
the Annual Operating Statement, (ii) to the extent of available Operating
Profit after payment in full of Owners Priority and (iii) 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 to
Owner for each such Accounting Period in accordance with Section 4.01. Any
Incentive Management Fee payable to Manager will be payable within thirty (30)
days after Owners receipt and acceptance of the Annual Operating Statement.

3.03 Reimbursables.

Although
Manager shall not be required to advance its own funds for any purpose under
this Agreement, Manager shall, nonetheless, be reimbursed from Gross Revenues
or by Owner for all reasonable amounts advanced by Manager, its employees, or
agents, including, but not limited to, costs paid to third parties for property
specific data processing, third party payroll processing, costs incurred in
complying with the requirements of Section 4.08 hereof, travel and
out-of-pocket expenses, such as postage, facsimile, express courier, and long
distance telephone expenses incurred in the performance of Managers duties and
obligations hereunder. Such expenses shall be set forth in the Annual Operating
Projection. The provisions of this Section 3.03 shall survive Termination.

3.04. Termination
Fee.

A. If this
Agreement is terminated by Owner for any reason prior to the expiration of the
Term (including, but not limited to, a termination by Owner incident to a Sale
of the Hotel as provided in Section 9.02 below), other than (i) a performance
termination as provided for in Section 2.02 above or (ii) in the case of an
Event of Default by Manager or (iii) a termination due to an Operating Loss or
(iv) termination as provided in Section 4.08 or (v) a termination permitted
under Article VII, Owner agrees to pay Manager a Termination Fee, as
liquidated damages, and not as a penalty, equal to the sum obtained by
multiplying: (1) one-twelfth (1/12) of the annual Base Management Fee in the
amount called for in the current Annual Operating Projection (but in no event
less than the Base Management Fee for the preceding full Fiscal Year) times (2)
the number of months remaining in the Term. Nothing in this paragraph is
intended to imply that Owner has any right to terminate this Agreement except
as is expressly set forth elsewhere herein.

B. The
parties recognize that if this Agreement is terminated under circumstances that
would entitle Manager to a Termination Fee in accordance with (A) above,
Manager would suffer an economic loss by virtue of the loss of management fees
that would otherwise have been

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earned under this Agreement. Because such fees vary in amount depending
upon the Gross Revenues of the Hotel and, accordingly, would be extremely
difficult and/or impractical to ascertain with certainty, the parties agree
that the Termination Fee constitutes a reasonable estimate of such economic
loss and is appropriately delineated as liquidated damages and not as a
penalty.

C.
Notwithstanding the foregoing, if in the event of a termination for which a
Termination Fee would otherwise be due, Owner may, in its sole and absolute
discretion, avoid payment of such Termination Fee by, within sixty (60) days of
such termination, by naming Manager as manager for another hotel not already
managed by Manager, provided that such substitute hotel is reasonably
comparable to the Hotel in size, number of rooms, quality of franchise,
strength of geographic market, and gross revenue. If Manager is so appointed as
manager of a substitute hotel, such management shall be pursuant to the terms
and conditions of this Agreement.

D. The
provisions of this Section 3.04 shall survive Termination.

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 mutually agreed upon by Owner and Manager, 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 and the Base
Management Fee 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 each SEC Filing Period, Manager shall deliver
to Owner (1) 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
(or comparable employee) certifying that, to the best of his or her knowledge,
such Annual Operating Statement is true and correct and (2) a statement (the Quarterly
Operating Statement) in reasonable detail summarizing the
operations of the Hotel for the immediately preceding calendar quarter and a
certificate of Managers chief accounting officer (or comparable employee)
certifying that, to the best of his or her knowledge, such Quarterly 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

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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, unless such
loss was due to a force majeureevent, no Base Management Fee or Incentive
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 not accrue and shall not be
payable to Manager. In no event shall Incentive Management Fees accrue, nor
shall any Incentive Management Fee be payable to Manager in respect of any
Accounting Period (i) as to which there is an Operating Loss or (ii) as to
which accrued Base Management Fees are payable to Manager.

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 (without affecting Managers other remedies under this Agreement) to
withdraw an amount to cover such Operating Loss from future distributions of
funds otherwise due to Owner. In the event an Operating Loss occurs in respect
of a Fiscal Year, either Owner or Manager may elect to terminate this
Agreement. In no event shall Manager be obligated to invest its own funds to
cover any Operating Loss.

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 GAAP. Owner may
at reasonable intervals and upon giving reasonable advance notice examine such
records during Managers normal business hours. If Owner desires 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. 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 an independent certified
professional accountant retained 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. The cost of the audit shall be paid by Owner and be a
Deduction; 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

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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 the
General Manager or the Assistant General Manager of the Hotel, a senior officer
of Manager or such other representatives of Manager 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 unless resulting from acts or omissions of Manager that
are in violation of or inconsistent with this Agreement or from Managers
negligence or misconduct (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, and
Owner shall indemnify, defend and hold Manager harmless from and against all
loss, costs, liability, and damage (including, without limitation, reasonable
attorneys fees and expenses) arising from Owners failure to pay or perform
such debts and liabilities. Manager shall pay, indemnify, defend and hold Owner
harmless from and against all Managers Liabilities and all loss, costs,
liability and damage (including, without limitation, reasonable attorneys fees
and expenses) arising from Managers failure to pay or perform Managers
Liabilities. The provisions of this Section 4.03.C shall survive Termination.

4.04.
Annual Operating Projection.

Manager
shall deliver to Owner for its review, at least forty-five (45) 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. 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
are unable to agree upon the Annual Operating Projection by the commencement of
the Fiscal Year

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to which it relates, the Manager shall be entitled to operate the Hotel
in accordance with this Agreement with the maximum approved amount of
expenditures to be equal to (i) the aggregate of all items in the proposed
budget which are not disputed by Owner, plus (ii) the sum of the actual
expenditures for the items in dispute in the previous Fiscal Year increased by
the increase (if any) in the CPI on January 1 of the year in question over the
CPI on January 1 of the previous year.

4.05.
Working Capital.

Owner, as
of the Effective Date, shall establish a level of Working Capital funds, which
shall be held in the Operating Accounts, that 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. Manager may
from time to time during the Term request that Owner advance any additional
funds necessary to maintain Working Capital at levels reasonably determined by
Manager (with the concurrence of Owner) to be necessary to satisfy the needs of
the Hotel. 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 such written notice from Manager, Manager may increase the
amount based on the CPI formula in Paragraph 4.04 above. If Owner and Manager
agree upon the need for and amount of additional Working Capital and thereafter
Owner does not so fund additional Working Capital within ten (10) Business Days
after Owners receipt of a written request from Manager to fund such additional
Working Capital, Manager shall have the right to withdraw an amount equal to
the funds requested by Manager for additional Working Capital from future
distribution of funds otherwise due to Owner. All funds so advanced for Working
Capital shall be utilized by Manager for the purposes of 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 determined by Manager
(with the concurrence of Owner) to be necessary to satisfy the needs of the
Hotel, shall be paid from Gross Revenues as 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

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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 or Owner 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 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.

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 (or equivalent
employee) 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

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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.

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
reasonable best efforts to remedy and/or correct identified weaknesses within
thirty (30) days after notice; provided, however, that in the event that
Manager does not so remedy and/or correct such weaknesses within the applicable
thirty (30) day cure period, Owner shall be entitled to terminate this
Agreement upon thirty (30) days prior notice to Manager. Manager shall be
responsible for any costs of Owner or its auditors associated with correcting
or retesting any such weaknesses.

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, 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.

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

A.
At Owners option and request, a reserve account in the name 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.
Capital Expenditures.

B.
During the Term, Manager shall transfer into the Reserve the amount(s)
specified in 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 at Owners expense 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 agreed upon by Owner
and Manager and as may be required by the Franchise Agreement. At the end of
each Fiscal Year, any amounts remaining in the Reserve shall be carried forward
to the next Fiscal Year. The Reserve will be kept in an interest-bearing
account, and any interest which accrues thereon shall be retained in the
Reserve. Interest which accrues on amounts held in the Reserve, shall not (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.

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 Annual
Operating Projection approved by Owner. In the event that Owner requests that
Manager perform capital improvements that are not included in the Annual
Operating Projection, Manager will perform such improvements provided that
Owner and Manager have theretofore agreed upon a mutually satisfactory funding
mechanism to pay for the cost of such improvements. Notwithstanding the
foregoing, in case of threatened damage or destruction to the Hotel or persons
or property thereon due to force majeure or other comparable
emergency, Manager may at Owners expense make such repairs, replacements or
improvements to the Hotel as Manager reasonably deems necessary to avoid and/or
minimize any such injury, damage or destruction.

E.
Notwithstanding anything contained herein to the contrary, at Owners option
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

14

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incurred.
However, such accrued and unfunded reserves shall be deducted from Gross
Revenues for purposes of calculating the Incentive Management Fee.

F.
Unless otherwise expressly covered by this Article V (including without
limitation in case of emergency as provided in Section 5.02.D.), 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 Owners prior approval, which shall not be unreasonably withheld or
delayed, and 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 in determining Operating Profit, the
following insurance and/or such other insurance as may be required by the
Franchise Agreement or 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 and 2, 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 as is
customary in accordance with local practice.

B.
All policies of insurance required under Section 6.01.A. 1, 2, 3, and 4 shall
insure Owner, Landlord, Manager, and any Mortgagee as named insureds, 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
Owners prior approval, which shall not be unreasonably withheld or delayed,
and 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 in

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determining Operating Profit, with insurance companies approved by
Owner the following insurance and/or such other insurance as may be required by
the Franchise Agreement or approved or required by Owner:

A.
Workers compensation 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;

B.
Fidelity bonds or crime insurance with respect to Hotel employees and other
employees of Manager handling funds of the Hotel, in an amount approved by
Owner;

C.
Comprehensive general public 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;

D.
Employment practices liability insurance covering employment-related claims and
the legal defense of such claims in amounts as Manager in its reasonable
judgment deems advisable (with the concurrence of Owner, which shall not be
unreasonably withheld or delayed);

E.
Such other insurance, including excess/umbrella coverage, in amounts as Manager
in its reasonable judgment deems advisable (with the concurrence of Owner,
which shall not be unreasonable withheld or delayed) 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,
Manager and Landlord shall be the named insureds with respect to the insurance
described in Section 6.02.C and, to the extent applicable, Section 6.02.E.
Manager shall be the named insured and Owner and Landlord shall be additional
insureds on the policies described in Section 6.02.A, 6.02.B. and 6.02.D.

6.03.
Coverage.

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 or Owner without prior
written approval of Manager and 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.

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

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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 property and operational insurance for the Hotel otherwise required to
be maintained by Manager under this Article VI and in lieu of Managers
procuring the same, provided that (i) Owner shall give Manager not less than
thirty (30) days notice of Owners intent to provide such insurance and shall
provide to Manager upon request certificates of insurance, naming Manager as an
additional insured, evidencing the same (ii) Owners insurance provides
reasonably equivalent coverage to Managers policies and (iii) such insurance
procured by Owner shall not become effective until the end of the then-current
term of the applicable policy or policies maintained by Manager. 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. Without
limiting the generality of the foregoing, all insurance premiums and any costs
or expenses with respect to such insurance shall be Deductions in determining
Operating Profit.

6.06 Waiver
of Subrogation. All policies of insurance carried by any party pursuant to
this Agreement shall expressly waive any right on the part of the insurer
against any other party to this Agreement, which right, is hereby expressly
waived to the extent that such waiver is not prohibited by or violative of any
such policy or does not otherwise cause a loss or reduction of coverage. The
parties to this Agreement agree that their policies will include such waiver
clause or endorsement so long as the same shall be obtainable without
unreasonable extra cost.

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. All
proceeds from the insurance described in this Agreement shall be paid to Owner
and/or Landlord, as the case may be. If Owner elects not to repair or replace
said damaged portion of the Hotel, Owner shall so notify Manager by written
notice as soon as reasonable practicable and no later than ninety (90) days
after the date of the casualty.

B.
In the event damage or destruction to the Hotel from any cause materially and
adversely affects the operation of the Hotel and Owner notifies Manager that
Owner will not repair or replace such damage, either party may terminate this
Agreement by at least sixty (60) days prior written notice to the other party.

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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.

7.03.
Business Interruption.

In
the event that the operations of the Hotel are interrupted by the causes
described in Sections 7.01 and 7.02 above, Manager shall nonetheless be
entitled to be paid a Base Management Fee during the period of interruption
equal to one-twelfth (1/12) of the annual Base Management Fee in the
amount called for in the current Annual Operating Projection (but in no
event less than the Base Management Fee for the preceding full Fiscal Year).
The Base Management Fee shall be prorated for any partial period of
interruption.

7.04.
Subordination to Mortgage.

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 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 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

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may
be terminated at the election of such Subsequent Owner as of the date of such
Foreclosure or upon thirty (30) days notice.

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.

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).

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,
provided that only a two (2) business day notice or cure period shall be
required in the case of payments by Manager of Owners Priority or other
distributions of Operating Profit payable to Owner.

E.
Manager, any of its Affiliates or any employee at the Hotel is or becomes a
Specially Designated National or Blocked Person, unless, in the case of an
employee, Manager terminates any such employee promptly after becoming aware of
the same.

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F.
In carrying out its duties hereunder, Manager or an officer, director,
employee, or agent of Manager or its Affiliates commits any act involving
fraud, moral turpitude or willful misconduct relating to the business or
affairs of the Hotel, or commits 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 false or intentionally
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
that continues 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 such default is cured not later than ninety (90) days
after Managers receipt of such written notice and (ii) only a two (2) business
day notice or cure period shall be required in the case of Managers failure to
maintain the insurance required by Article VI.

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 the provisions of Section 10.24
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 (except as specifically limited by this Agreement) and shall survive
Termination.

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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 any controlling
ownership or beneficial interest, direct or indirect, in Manager, including any
such transfer by operation of law except to an Affiliate and (iii) a transfer
of Managers interest in this Agreement by operation of law, including by
merger or consolidation (other than such a transfer to an Affiliate approved by
Owner, which approval shall not be unreasonably withheld).

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 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,
subject to Section 9.02, 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.

Owner or
Landlord may, in its or their sole and absolute discretion, enter into any Sale
of the Hotel to any Person and, in connection with any such Sale of the Hotel,
may assign this Agreement as provided in Section 9.01. However, if Owner or
Landlord enters into a Sale of the Hotel, either Owner or Manager may, at its
option, terminate this Agreement upon thirty (30) days notice to the other
party upon completion of the Sale of the Hotel. 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; provided, however, that Owner shall continue to be liable for all
obligations and amounts due which arise or accrue during the Term of this
Agreement before the date of such Sale of the Hotel, including, but not limited
to, the obligation to pay a Termination Fee as provided in Section 3.04 above
but such Termination Fee shall only be payable if Owner (not Manager)
terminates this Agreement upon Sale of the Hotel. Upon the termination of this
Agreement pursuant to this Section 9.02,

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Manager shall be released of all liabilities and obligations arising
under and with respect to this Agreement on and after the date of such
termination; provided, however, that Manager shall continue to be liable for
all obligations and amounts due which arise or accrue during the Term of this
Agreement before the date of such termination.

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 withheld, delayed or conditioned, 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.

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 or Owner, provided that no such contract or agreement shall be entered
into in the name of Owner without Owners prior written consent and approval of
each such agreement and contract, and Owner shall have no liability with
respect to any contract or agreement entered into in the name of Manager other
than to pay any sums due thereunder which are Deductions or which Owner
otherwise agrees to pay. Notwithstanding anything contained herein to the contrary,
Manager shall defend, indemnify and

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hold Owner harmless from and against any claims by the third party
vendor or supplier under any contract entered into by Manager (a) in the name
of Owner without Owners prior written consent and approval or (b) in the name
of Manager without Owners prior written consent and/or approval if such
consent and/or approval is required by the terms of this Agreement.

10.04.
Applicable Law; Jurisdiction.

This
Agreement shall be construed under and shall be governed by the laws of the
state in which the Hotel is located, 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 state and (to the extent permitted by law) Federal courts
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 or Manager may otherwise have to bring any action or proceeding relating
to this Agreement against the other party in the courts of any other
jurisdiction. Each of Owner and Manager hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection 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.

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             

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| |             |                                     
| | ----------- | ------------------------------------
| |             | 814 E. Main
 Street                 
| |             | Richmond,
 Virginia 23219           
| |             | Attn:
    Krissy Gathright          
| |             | Phone: (804)
 727-6323              
| |             | Fax:     (804)
 727-6353            
| |             |                                     
| | To Manager: | c/o Newport
 Hospitality Group, Inc.
| |             | 4290 New Town Avenue                
| |             | Williamsburg, Virginia 23188        
| |             | Attn: Michael L. Pleninger          
| |             | Fax No.: (757) 221-0400             
| |             |                                     
| | and         |                                     
| |             |                                     
| |             | c/o Newport Hospitality Group, Inc. 
| |             | 116 Park Lane                       
| |             | Concord, Massachusetts 01742        
| |             | Attn: Andrew T. Carey               
| |             | Fax No.: (978) 318-0332             

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 Hotel in compliance with all applicable Environmental
Laws. Manager shall (i) not use, generate or store any Hazardous Materials in
or on 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 Hotel, except for the ordinary use of cleaning and maintenance
supplies in compliance with applicable 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) use best efforts
to 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 Hotel during the Term,
Manager shall

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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.

C.
Notwithstanding the foregoing paragraphs, the parties agree that Manager is not
and shall not be the insurer for the Hotel as to environmental matters and, to
that end, Manager shall only be responsible for environmental remediation
necessitated as a result of Managers negligence or acts or omissions (as
opposed to Owners or a third-partys negligence, acts or omissions).

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; Projections.

A.
Owner and Manager agree that the terms of this Agreement (but not its
existence) 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 or Manager 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 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

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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.

B.
Owner acknowledges that any written or oral projections, pro formas, or other
similar information that has been (prior to execution of this Agreement) or
will (during the Term) be provided by Manager (or any Affiliate of either) to
Owner is for information purposes only, and that Manager, and any such
Affiliate do not guarantee that the Hotel will achieve the results set forth in
any such projections, pro formas, or other similar information. Owner further
acknowledges that any such projections, pro formas, or other similar
information are based on assumptions and estimates, unanticipated events may
occur subsequent to the date of preparation of such projections, pro formas,
and other similar information, and the actual results achieved by the Hotel are
likely to vary from the estimates contained in any such projections, pro
formas, or other similar information and such variations might be material.

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 Affiliates failure to comply with its
obligations under this Agreement and, to the extent provided herein, the
obligations of the franchisee under the Franchise Agreement, (ii) any negligent
act or omission, theft, fraud or willful misconduct of Manager or its
Affiliates and their respective employees or agents and (iii) any claim
asserted by any employee or agent of Manager or its Affiliates, including any
claim for employment discrimination, wrongful termination, violations of law
and other claims asserted by such employees, except, as to any of the items
listed in clauses (i)  (iii) above, to the extent of any costs properly
payable from Gross Revenues as Deductions, to the extent of any costs or claims
covered by insurance and to the extent that the loss or liability giving rise
to such claim was caused directly by Owners breach of its obligations under
this Agreement.

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 (i) Owners failure to comply with its obligations under this
Agreement, (ii) any theft, fraud or willful misconduct of Owner or its
Affiliates or their respective employees or agents and (iii) any claim asserted
by any employee or agent of Owner or its Affiliates except, as to any of the
items listed in clauses (i)-(iii) above, to the extent the loss or liability
giving rise to such claim was caused directly by Managers breach of its
obligations under this Agreement or is covered by insurance.

C. In agreeing to the provisions relating to liability and indemnity contained
in this Section 10.10, Owner, Landlord, and Manager recognize that simple
mistakes and/or errors in judgment by Manager and the employees of Manager are
ordinary risks of business in the operation of the Hotel and that Manager is
not assuming such risks and shall not be responsible for loss, liability, or
costs resulting therefrom. Further, Manager is not undertaking to be an insurer
against third party claims or the insurer of the profitability of the Hotel.
Furthermore,

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Manager is not
assuming any liability for work performed or materials or equipment supplied by
third parties.

D.
Neither Owner, Landlord, nor Manager shall be liable for any special, indirect,
incidental, or consequential damages of any kind in connection with this
Agreement, including without limitation, damages resulting from loss of
profits, lost sales, business or goodwill, whether or not such party has been
advised of the possibility of such damages.

E.
The provisions of this Section 10.10 shall survive Termination.

10.11.
Actions to be Taken Upon Termination.

Upon a
Termination, the following shall be applicable:

A.
All fees or expenses due to Manager for the period before such Termination
shall be paid to Manager. On the effective date of such Termination, Manager
shall cease all activities hereunder on behalf of Owner at the Hotel and shall
have no further obligations hereunder except as to matters arising before such
date and except as otherwise provided in this Agreement. However, Manager shall
cooperate with Owner in the orderly transfer of management to Owner or Owners
designated agent or manager.

B.
Manager shall, within forty-five (45) 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.

C.
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.

D.
Manager shall make available to Owner such books and records respecting the
Hotel (including those from prior years) as will be needed by Owner to prepare
the accounting statements, in accordance with the GAAP, for the Hotel for the
year in which the Termination occurs and for any subsequent year.

E.
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

27

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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.

F.
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.

G.
If this Agreement is terminated before the expiration of the Term for any
reason other than an Event of Default by Manager, Manager may submit to Owner
for its approval a budget with respect to expenses anticipated to be incurred
by Manager to terminate its activities at the Hotel. Upon approval of such
budget by Owner, Owner shall deposit the total amount of such budget into the
Hotels operating account, and Manager may use such deposit to pay such
expenses. Manager shall provide Owner a final accounting of the foregoing, and
any surplus remaining from such deposit shall be refunded to Owner.

H.
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 offer employment to certain of Managers
employees, Manager shall not take any action that would cause such employees
not to continue as employees at the Hotel.

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

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

The
provisions of this Section 10.11 shall survive Termination.

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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 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 or where required to give
effect to a provision of this Agreement or to avoid a forfeiture, 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

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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.

10.17.
Affiliates.

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) or 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. Notwithstanding the foregoing, Manager may contract
with Affiliates to provide marketing, accounting and human resource services
subject to the conditions that (i) the costs of such services are included in
the Annual Operating Projection approved by Owner and (ii) at the time Manager
submits each Annual Operating Projection to Owner for its approval, Manager
specifically identifies the services to be provided by Managers Affiliates.

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 of the officers,
directors, partners or, to Managers knowledge, 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.

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

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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, subject to the availability of adequate funds, 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 Sections XIII (Accounting and Records) and XIV (Insurance)
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 shall send promptly to Owner
any and all notices that Manager receives from the Franchisor with respect to
the Hotel or the Franchise Agreement and shall keep Owner fully informed with
respect to all matters that come to Managers attention under the Franchise
Agreement. Notwithstanding the foregoing, Manager shall not have the right to
grant any consent, approval or other right reserved to the Franchisee 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 for any reason, this Agreement shall also terminate effective as of
the date of termination of the Franchise Agreement, unless the parties hereto
agree otherwise.

10.23.
Operation of Other Hotels.

During the
Term and except for the Hotel and the other hotels described in Schedule 1,
neither Manager nor 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, that is a Competing Hotel without Owners prior
written consent. In addition, 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

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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
this Agreement. For purposes of this Section, a Competing Hotel shall mean
any hotel, inn, motel or other type of lodging facility that markets directly
to or makes efforts to attract customers, guests and/or hotel business that
would otherwise do business with the Hotel.

10.24.
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.

10.25
Termination of the Hotel Lease.

Landlord
represents and agrees that in the event of the cancellation or termination of
the Hotel Lease for any reason, this Agreement shall remain in full force and
effect with Landlord substituted as Owner hereunder.

10.26
All Payments Subject to Availability of Funds.

Whenever
Manager is required to make a payment hereunder, it is agreed that such
obligation is subject to the availability of adequate operating funds (or other
funds provided by Owner) after the payment of all operating expenses of the
Hotel.

ARTICLE
XI
DEFINITION OF TERMS

11.01.
Definition of Terms.

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

Accounting
Period shall mean a calendar month.

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

Accounting
Quarter shall mean three consecutive Accounting Periods, the
first of which begins on the first day of the Fiscal Year.

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

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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.

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 the percentage of Gross Revenues shown on Schedule 1
for each Fiscal Year during the Term.

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.

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, as described in Schedule 1. 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, Owner and Manager
agree to mutually, reasonably and in good faith, discuss appropriate changes to
the foregoing list of the hotels that shall comprise the Competitive Set.

CPI,
shall mean the Consumer Price Index for All Urban
Consumers (CPI-U) for the U.S. City Average for All Items(1982-1984=100) published by the Bureau of Labor
Statistics, United States Department of Labor; provided, however, that if such
index ceases to be published or is converted to a different standard or is
otherwise revised, the index shall be adjusted by any then applicable
conversion factor, or failing that, by any published price or cost indices or
other published data which are as comparable as possible to the Index prior to
its termination or revision.

Cure
Payment shall have the meaning set forth in Section 2.02.A.

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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.

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

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, that meet
Owners capitalization policy consistent with GAAP, but shall not include
Fixed Asset Supplies or Software.

FF&E
Lease means a lease of any property other than real property.

Fiscal
Year shall mean a calendar year commencing on January 1 and
ending on December 31; provided, however, the first fiscal year commences as of
the Effective Date and ends at midnight on December 31 of that same calendar
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.

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.

Foreclosure
shall mean any exercise of the remedies available to a Mortgagee, upon a
default under the 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 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; (vi) 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.

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Franchise
Agreement shall mean the franchise 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, 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; and service
charges; 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; 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.

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

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.

Hotel
Purchase Contract shall have the meaning ascribed to it in Schedule
1.

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 set forth in Schedule 1 of
Available Cash Flow in any Fiscal Year (or portion thereof) after payment to
Owner of Owners Priority.

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

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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 party identified as Landlord in Schedule 1.

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.

Mortgage
shall mean any mortgage, deed of trust or similar security instrument creating
a lien on the Hotel.

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

Operating
Accounts shall have the meaning 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, compensation, fringe
benefits, payroll taxes 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;

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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 with the concurrence of Owner for specialized
services (including, without limitation, quality assurance inspectors) and the
reasonable cost of attendance by employees of the Hotel at training and
manpower development programs sponsored by Manager, provided Owner has approved
attendance at programs and the cost thereof;

7.
the Base Management Fee;

8.
all royalty, marketing fund, reservation, communication support, property
management system 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, Owner or Landlord
related to this Agreement or to Managers operation of the Hotel and
Impositions (exclusive of Managers, Owners and Landlord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 FF&E leases or other forms of financing obtained for
the FF&E located in or connected with the Hotel; and

14.
to the extent 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.

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The term Deductions
shall not include (a) debt service payments pursuant to a Mortgage or (b)
rental payments under any Hotel Lease, all of which shall be paid by Owner from
its own funds.

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 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 after the date of this Agreement 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 so as to equal a twelve percent (12%)
return on an amount equal to the sum of (i) the purchase price paid by Owner
for the Hotel plus (ii) closing costs (including, without limitation,
defeasance costs but excluding any brokerage fees or expenses incurred by
Owners parent in connection with its public equity raise) plus (iii) such
excess capital expenditures.

Performance
Termination Period shall have the meaning
ascribed to it in Schedule 1.

Performance
Termination Threshhold shall have the meaning ascribed thereto
in Schedule 1.

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.

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

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

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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. If the parties
fail to agree on such alternative source within a reasonable period of time,
either party may terminate this Agreement upon sixty (60) days prior written
notice to the other party.

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 Competitive Set, as set forth in the
Revenue Data Publication. Appropriate adjustments to the Revenue Index,
acceptable to Owner in its reasonable discretion, 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. Sale of
the Hotel shall exclude related party transactions with Affiliates of Owner and
shall also exclude granting of security interests in the Hotel or any part
thereof in connection with financing.

SEC
Filing Period shall mean such period of time (a) (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 and (b) (not to exceed twenty (20) days) after the close of each calendar
quarter of a Fiscal Year within which Owner must receive the Quarterly
Operating Statement from Manager with respect to such quarter, in each case in
order for Owner to have a reasonable period of time within which to prepare and
make all

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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 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
7.04.

Subsequent
Owners shall have the meaning ascribed to it in Section 7.04.

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.

40

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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.

ARTICLE
XII

SUPPLEMENTAL
PROVISIONS

All of the
terms, conditions, representations, warranties, covenants and other provisions,
if any, set forth in the supplemental provisions attached hereto as Schedule
2 (the Supplemental Provisions) are hereby incorporated into this
Agreement and shall be considered a part hereof. In the event of any conflict
or inconsistency between the Supplemental Provisions and the other provisions
of this Agreement, the Supplemental Provisions shall control.

41

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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
 HOSPITALITY MANAGEMENT, INC., a Virginia corporation        
| |                                                                         |                          
| | By:                                                                     | /s/ Justin
 G. Knight     | 
| |                                                                         |                           | 
| | Name: Justin
G. Knight                                                 
| |                                                                         |                           | 
| | Title: President                                                       
| |                                                                         |                           | 
| |                                                                         |                          
| | MANAGER:                                                               
| |                                                                         |                          
| | NEWPORT
 COLUMBIA MANAGEMENT, LLC, a Virginia limited liability company
| |                                                                         |                          
| | By:                                                                     | /s/ Michael
 L. Pleninger | 
| |                                                                         |                           | 
| | Name: Michael
L. Pleninger                                             
| |                                                                         |                           | 
| | Title: Manager                                                         
| |                                                                         |                           | 

---



SCHEDULE
1

HOTEL SPECIFIC DATA

1. Description of Hotel: That certain hotel known as the TownePlace
Suites Columbia  Southeast/Fort  Jackson,  250 Exchange  Blvd., Columbia,  South Carolina
29209,  containing  91 guest  suites,  a lobby,  meeting  rooms,  administrative  offices,  parking
 and certain  amenities  and related
facilities located on the Site, including the following:

|   |                                                                                                                                                                                    
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   | a. Number of Guest Rooms: 91                                                                                                                                                       
|   |                                                                                                                                                                                    
|   | b. Other Improvements/Amenities: 540 sq. ft of meeting space; full service
 business center; outdoor swimming pool; whirlpool; exercise room; wireless
 high speed internet access.
|   |                                                                                                                                                                                    
|2. | Franchise Agreement: Franchise Agreement
 between Apple Ten Hospitality Management, Inc. and Marriott International,
 Inc., dated March 25, 2011                                   
|   |                                                                                                                                                                                    
|3. | Competitive Set:                                                                                                                                                                   

|      |  |                                                    
|----- |  | ---------------------------------------------------
|8936  |  | La Quinta
 Inn Columbia Maingate Fort Jackson      
|27402 |  | Whitney
 Hotel                                     
|37287 |  | Country Inn
 & Suites Columbia                     
|37732 |  | Comfort Inn
 & Suites Fort Jackson Maingate        
|54269 |  | Holiday Inn
 Express & Suites Columbia Fort Jackson
|56060 |  | Candlewood
 Suites Columbia Fort Jackson           

|   |                                                                                                                                                                                    
|-- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|4. | Landlord: Apple Ten Business Trust                                                                                                                                                 
|   |                                                                                                                                                                                    
|5. | Base Management Fee: Three percent (3%)                                                                                                                                            
|   |                                                                                                                                                                                    
|6. | a. Incentive Management Fee: 20% of available cash flow after
 payment of Owners Priority                                                                                         
|   |                                                                                                                                                                                    
|   | b. Owners Priority: $1,260,000 (12% of Purchase Price
 [$10,500,000])                                                                                                             
|   |                                                                                                                                                                                    
|7. | a. Performance Termination Threshold: Year 1: $840,000 (8% of Purchase
 Price); Year 2: $945,000 (9% of Purchase Price); Year 3 and thereafter:
 $1,050,000 (10% of Purchase Price)
|   |                                                                                                                                                                                    
|   | b. Performance Termination Period: Any calendar year;
 provided, however, the initial
 Performance Termination Period shall begin on January 1, 2012.                              

2

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|    |                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------
|8.  | Revenue
 Index Threshold: 100%                                                                     
|    |                                                                                                    
|9.  | Hotel
 Purchase Contract: N/A                                                                      
|    |                                                                                                    
|10. | Expiration
 Date of Term: Five (5) years from the Effective Date                                   
|    |                                                                                                    
|11. | State in
 which Manager is Organized: Virginia                                                     
|    |                                                                                                    
|12. | FF&E
 Reserve: An amount equal to five percent (5%) of
 Gross Revenues for each Accounting
 Period.
|    |                                                                                                    
|13. | Other Hotels:
 None                                                                                

3

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SCHEDULE
2

1. Franchise Agreement. During the Term of this Agreement,
subject to the availability of adequate funds, 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 Sections
XIII (Accounts and Receipts) and XIV (Insurance) 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 shall send promptly to Owner any and all
notices that Manager receives from the Franchisor with respect to the Hotel or
the Franchise Agreement and shall keep Owner fully informed with respect to all
matters that come to Managers attention under the Franchise Agreement.
Likewise, Owner shall send promptly to Manager any and all notices that Owner
receives from the Franchisor with respect to the Hotel or the Franchise
Agreement that would require action or compliance on the part of Manager.
Notwithstanding the foregoing, Manager shall not have the right to grant any
consent, approval or other right reserved to the Franchisee 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 for any
reason, this Agreement shall also terminate effective as of the date of
termination of the Franchise Agreement, unless the parties hereto agree
otherwise.

[FOR HILTON BRANDS:] During the Term of this Agreement, subject to the
availability of adequate funds, Manager shall perform all of the obligations of
Owner as Licensee under the Franchise Agreement to the extent such
obligations relate to the management or operation of the Hotel, including,
without limitation, the obligations of Licensee under Paragraphs 6, 7 and 8
of the Franchise Agreement, and Manager shall not commit any act or omit to
take any action that would cause a default by the Licensee 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 shall send promptly to Owner any and
all notices that Manager receives from the Franchisor with respect to the Hotel
or the Franchise Agreement and shall keep Owner fully informed with respect to
all matters that come to Managers attention under the Franchise Agreement.
Notwithstanding the foregoing, Manager shall not have the right to grant any
consent, approval or other right reserved to the Licensee 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 for any
reason, this Agreement shall also terminate effective as of the date of
termination of the Franchise Agreement, unless the parties hereto agree
otherwise.

2. Accounting Period. For purposes of this Agreement, the term
Accounting Periods 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.

4

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3. Fiscal Year. [FOR MARRIOTT BRANDS:] For purposes of this
Agreement, the term Fiscal Year shall mean the fiscal year as of the
Effective Date that ends at midnight on the Friday closest to December 31 in
each calendar year; the new Fiscal Year begins on the Saturday immediately
following said Friday. Any partial Fiscal Year between the Effective Date and
the commencement of the first full Fiscal Year shall constitute a separate
Fiscal Year and shall be deemed the first 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.

[FOR HILTON BRANDS:] For purposes of this Agreement, the term 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 and shall be deemed the first 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.

5

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EXHIBIT
A

LEGAL DESCRIPTION OF SITE

All
that certain, piece, parcel or lot of land, lying, being and situate on the
eastern side of East Exchange
Boulevard, in the City of Columbia, County of Richland, State of South Carolina, containing 2.27 acres, more or less, the same being
designated as Vacant Lot, on a plat prepared for Mitul Patel, plat
prepared by Baxter Land Surveying Co., Inc., Rosser W. Baxter, Jr. SCPLS No,
7613, dated October 1, 2006, approved for recording
on March 28, 2007, and recorded March 28, 2007, in the Register of Deeds Office in Record
Book R1296 at page 2769, reference being made to said plat for a more complete description, all measurements being
a little more or less.

Being a portion of the
property conveyed to Columbia East Investments, LLC by deed of Sun NLF Limited Partnership dated March 3,
2005, recorded March 16, 2005 in Record
Book 1032 at page 3851.

TMS No.:     16308-07-01 (portion of)

6

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