Exhibit 10.7

Hilton Garden Inn Denver Downtown
1400 Welton Street
Denver, Colorado 80202

HOTEL LEASE AGREEMENT

EFFECTIVE MARCH 4, 2011

BETWEEN

APPLE TEN HOSPITALITY OWNERSHIP, INC.
A VIRGINIA CORPORATION

AS LESSOR

AND

APPLE TEN HOSPITALITY MANAGEMENT, INC.
A VIRGINIA CORPORATION

AS LESSEE

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TABLE OF CONTENTS

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|------------------------------------------------------------------ | ---- | -- | ------------------------------------------------------- |  | ----
|                                                                   |      |    |                                                         |  | PAGE
|                                                                   |      |    |                                                         |  |     
|ARTICLE 1
 LEASED PROPERTY; OTHER DEFINITIONS                      |      | 1 
|                                                                   | 1.1  |    | Leased
 Property                                        |  | 1   
|                                                                   | 1.2. |    | Definitions                                             |  | 2   
|ARTICLE 2
 TERM; TERMINATION                                       |      | 14
|                                                                   | 2.1. |    | Term                                                    |  | 14  
|                                                                   | 2.2. |    | Lessors
 Option to Terminate Lease                     |  | 15  
|                                                                   | 2.3. |    | Transition
 Procedures                                  |  | 15  
|                                                                   | 2.4. |    | Holding
 Over                                           |  | 17  
|ARTICLE 3
 RENT; RENT ADJUSTMENTS                                  |      | 18
|                                                                   | 3.1. |    | Rent                                                    |  | 18  
|                                                                   | 3.2. |    | Confirmation
 of Percentage Rent                        |  | 21  
|                                                                   | 3.3. |    | Additional
 Charges                                     |  | 21  
|                                                                   | 3.4. |    | Net Lease;
 No Termination, Abatement, Etc.             |  | 22  
|                                                                   | 3.5. |    | Material
 Changes in Economic Climate                   |  | 22  
|                                                                   | 3.6. |    | Rent
 Adjustment: Basic Assumptions Incorrect           |  | 24  
|ARTICLE 4
 ANNUAL BUDGETS; BOOKS AND RECORDS                       |      | 25
|                                                                   | 4.1. |    | Annual
 Budget                                          |  | 25  
|                                                                   | 4.2. |    | Books and
 Records                                      |  | 25  
|ARTICLE 5
 IMPOSITIONS; HOTEL COSTS                                |      | 26
|                                                                   | 5.1. |    | Payment of
 Impositions                                 |  | 26  
|                                                                   | 5.2. |    | Notice of
 Impositions                                  |  | 27  
|                                                                   | 5.3. |    | Adjustment
 of Impositions                              |  | 27  
|                                                                   | 5.4. |    | Utility
 Charges                                        |  | 27  
|                                                                   | 5.5. |    | Insurance
 Premiums                                     |  | 27  
|                                                                   | 5.6. |    | Franchise
 Fees                                         |  | 27  
|                                                                   | 5.7. |    | Ground Rent                                             |  | 27  
|ARTICLE 6
 LEASED PROPERTY; LESSEES PERSONAL PROPERTY             |      | 27
|                                                                   | 6.1. |    | Ownership of
 the Leased Property                       |  | 27  
|                                                                   | 6.2. |    | Lessees
 Personal Property                             |  | 27  
|                                                                   | 6.3. |    | Lessors
 Lien                                          |  | 28  
|                                                                   | 6.4. |    | Lessors
 Option to Purchase Assets of Lessee           |  | 28  
|ARTICLE 7
 CONDITION AND USE OF LEASED PROPERTY                    |      | 29
|                                                                   | 7.1. |    | Condition of
 the Leased Property                       |  | 29  
|                                                                   | 7.2. |    | Use of the
 Leased Property                             |  | 29  
|                                                                   | 7.3. |    | Lessor to
 Grant Easements, Etc.                        |  | 30  
|ARTICLE 8
 LESSEES COMPLIANCE WITH LAW; ENVIRONMENTAL COVENANTS   |      | 30
|                                                                   | 8.1. |    | Compliance
 with Legal and Insurance Requirements, Etc. |  | 30  
|                                                                   | 8.2. |    | Legal
 Requirement Covenants                            |  | 31  
|                                                                   | 8.3. |    | Environmental
 Covenants                                |  | 32  
|ARTICLE 9
 MAINTENANCE AND REPAIRS; ENCROACHMENTS AND RESTRICTIONS |      | 34
|                                                                   | 9.1. |    | Maintenance
 and Repairs                                |  | 34  
|                                                                   | 9.2. |    | Encroachments,
 Restrictions, Etc.                      |  | 35  

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|                                                        |       |    |                                                                                |  |   
|------------------------------------------------------- | ----- | -- | ------------------------------------------------------------------------------ |  | --
|ARTICLE 10
 ALTERATIONS AND IMPROVEMENTS; FF&E RESERVE  |       | 36
|                                                        | 10.1. |    | Alterations                                                                    |  | 36
|                                                        | 10.2. |    | Salvage                                                                        |  | 36
|                                                        | 10.3. |    | Joint Use
 Agreements                                                          |  | 36
|                                                        | 10.4. |    | [Reserved]                                                                     |  | 36
|                                                        | 10.5. |    | Furniture,
 Fixture and Equipment Allowance                                    |  | 36
|ARTICLE 11
 COMPLIANCE WITH FRANCHISE                   |       | 37
|                                                        | 11.1. |    | Compliance
 with Franchise Agreement and Management Agreement                  |  | 37
|ARTICLE 12
 PERMITTED LIENS AND CONTESTS                |       | 37
|                                                        | 12.1. |    | Liens                                                                          |  | 37
|                                                        | 12.2. |    | Permitted
 Contests                                                            |  | 38
|ARTICLE 13
 INSURANCE REQUIREMENTS                      |       | 39
|                                                        | 13.1. |    | General
 Insurance Requirements                                                |  | 39
|                                                        | 13.2. |    | Replacement
 Cost                                                              |  | 40
|                                                        | 13.3. |    | Waiver of
 Subrogation                                                         |  | 40
|                                                        | 13.4. |    | Form
 Satisfactory, Etc.                                                       |  | 40
|                                                        | 13.5. |    | Increase in
 Limits                                                            |  | 41
|                                                        | 13.6. |    | Blanket
 Policy                                                                |  | 41
|                                                        | 13.7. |    | No Separate
 Insurance                                                         |  | 41
|                                                        | 13.8. |    | Reports On
 Insurance Claims                                                   |  | 42
|ARTICLE 14
 CASUALTY INSURANCE PROCEEDS; RECONSTRUCTION |       | 42
|                                                        | 14.1. |    | Insurance
 Proceeds                                                            |  | 42
|                                                        | 14.2. |    | Reconstruction
 in the Event of Damage or Destruction Covered by Insurance     |  | 42
|                                                        | 14.3. |    | Reconstruction
 in the Event of Damage or Destruction Not Covered by Insurance |  | 43
|                                                        | 14.4. |    | Lessees
 Property                                                             |  | 44
|                                                        | 14.5. |    | Abatement of
 Rent                                                             |  | 44
|                                                        | 14.6. |    | Damage Near
 End of Term                                                       |  | 44
|                                                        | 14.7. |    | Waiver                                                                         |  | 44
|ARTICLE 15
 CONDEMNATION; AWARD ALLOCATION              |       | 44
|                                                        | 15.1. |    | Definitions                                                                    |  | 44
|                                                        | 15.2. |    | Parties
 Rights and Obligations                                               |  | 45
|                                                        | 15.3. |    | Total Taking                                                                   |  | 45
|                                                        | 15.4. |    | Allocation
 of Award                                                           |  | 45
|                                                        | 15.5. |    | Partial
 Taking                                                                |  | 45
|                                                        | 15.6. |    | Temporary
 Taking                                                              |  | 45
|ARTICLE 16
 DEFAULT BY LESSEE; LESSORS REMEDIES        |       | 46
|                                                        | 16.1. |    | Events of
 Default                                                             |  | 46
|                                                        | 16.2. |    | Surrender                                                                      |  | 47
|                                                        | 16.3. |    | Damages                                                                        |  | 48
|                                                        | 16.4. |    | Waiver                                                                         |  | 49
|                                                        | 16.5. |    | Application
 of Funds                                                          |  | 49
|                                                        | 16.6. |    | Lessors
 Right to Cure Lessees Default                                       |  | 49
|ARTICLE 17
 DEFAULT BY LESSOR; LESSEES REMEDIES        |       | 49
|                                                        | 17.1. |    | Breach by
 Lessor                                                              |  | 49
|                                                        | 17.2. |    | Lessees
 Right to Cure                                                        |  | 50
|                                                        | 17.3. |    | Provisions
 Relating to Purchase of the Leased Property by Lessee              |  | 50

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|                                                                           |        |    |                                              |  |   
|-------------------------------------------------------------------------- | ------ | -- | -------------------------------------------- |  | --
|ARTICLE 18
 INDEMNIFICATION                                                |        | 51
|                                                                           | 18.1.  |    | Indemnification                              |  | 51
|ARTICLE 19
 REIT REQUIREMENTS AND RESTRICTIONS                             |        | 52
|                                                                           | 19.1.  |    | Personal
 Property Limitation                |  | 52
|                                                                           | 19.2.  |    | Sublease
 Rent Limitation                    |  | 52
|                                                                           | 19.3.  |    | Sublease
 Tenant Limitation                  |  | 52
|                                                                           | 19.4.  |    | Lessee
 Ownership Limitations                |  | 52
|                                                                           | 19.5.  |    | Lessee
 Officer and Employee Limitation      |  | 52
|                                                                           | 19.6.  |    | Payments to
 Affiliates of Lessee            |  | 53
|ARTICLE 20
 SUBLETTING AND ASSIGNMENT                                      |        | 53
|                                                                           | 20.1.  |    | Subletting
 and Assignment                   |  | 53
|                                                                           | 20.2.  |    | Attornment                                   |  | 53
|                                                                           | 20.3.  |    | Conveyance
 by Lessor                        |  | 54
|ARTICLE 21
 QUIET ENJOYMENT; RISK OF LOSS                                  |        | 54
|                                                                           | 21.1.  |    | Quiet
 Enjoyment                             |  | 54
|                                                                           | 21.2.  |    | Risk of
 Loss                                |  | 54
|ARTICLE 22
 LESSOR MORTGAGES; SUBORDINATION OF LEASE                       |        | 54
|                                                                           | 22.1.  |    | Lessor May Grant
 Liens                      |  | 54
|                                                                           | 22.2.  |    | Subordination
 of Lease                      |  | 55
|ARTICLE 23
 ESTOPPEL CERTIFICATES; FINANCIAL STATEMENTS; INSPECTION RIGHTS |        | 55
|                                                                           | 23.1.  |    | Estoppel
 Certificates; Financial Statements |  | 55
|                                                                           | 23.2.  |    | Lessors
 Right to Inspect                   |  | 56
|ARTICLE 24
 APPRAISERS                                                     |        | 56
|                                                                           | 24.1.  |    | Appraisers                                   |  | 56
|ARTICLE 25
 ARBITRATION AND DISPUTE RESOLUTION PROCEDURES                  |        | 57
|                                                                           | 25.1.  |    | Arbitration                                  |  | 57
|                                                                           | 25.2.  |    | Alternative
 Arbitration                     |  | 57
|                                                                           | 25.3.  |    | Arbitration
 Procedure                       |  | 58
|ARTICLE 26
 NOTICES                                                        |        | 58
|                                                                           | 26.1.  |    | Notices                                      |  | 58
|ARTICLE 27
 MISCELLANEOUS                                                  |        | 58
|                                                                           | 27.1.  |    | No Waiver                                    |  | 58
|                                                                           | 27.2.  |    | Remedies
 Cumulative                         |  | 59
|                                                                           | 27.3.  |    | Waiver of
 Trial by Jury                     |  | 59
|                                                                           | 27.4.  |    | Acceptance
 of Surrender                     |  | 59
|                                                                           | 27.5.  |    | No Merger of
 Title                          |  | 59
|                                                                           | 27.6.  |    | Waiver of
 Presentment, Etc.                 |  | 59
|                                                                           | 27.7.  |    | Action for
 Damages                          |  | 59
|                                                                           | 27.8.  |    | Lease
 Assumption in Bankruptcy Proceeding   |  | 59
|                                                                           | 27.9.  |    | Enforceability                               |  | 60
|                                                                           | 27.10. |    | Memorandum
 of Lease                         |  | 60

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|                                           
|-------------------------------------------
|Exhibit A 
 Legal Description             
|Exhibit B 
 Space Leases                  
|Schedule 2.1
  Commencement Dates         
|Schedule
 3.1(a)  Base Rents              
|Schedule 3.1(b)
  Suite Revenue Breakpoint

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HOTEL LEASE AGREEMENT

THIS
HOTEL LEASE AGREEMENT (hereinafter called Lease), effective as of the 4th
day of March, 2011, by and between Apple Ten Hospitality Ownership, Inc., a
Virginia corporation (hereinafter called Lessor), and Apple Ten Hospitality
Management, Inc., a Virginia corporation (hereinafter called Lessee),
provides as follows:

AGREEMENT:

Lessor,
for and in consideration of the payment of rent by Lessee to Lessor, the
covenants and agreements to be performed by Lessee, and upon the terms and
conditions hereinafter stated, does hereby rent and lease unto Lessee, and
Lessee does hereby rent and lease from Lessor, the Leased Property.

ARTICLE 1
LEASED PROPERTY; OTHER DEFINITIONS

1.1.
Leased Property. The Leased Property shall mean and is comprised of
Lessors interest in the following:

(a)
the land described in Exhibit A attached hereto and by reference
incorporated herein (the Land);

(b)
all buildings, structures and other improvements of every kind including, but
not limited to, alleyways and connecting tunnels, sidewalks, utility pipes,
conduits and lines (on-site and offsite), parking areas and roadways
appurtenant to such buildings and structures presently situated upon the Land
(collectively, the Leased Improvements);

(c)
all easements, rights and appurtenances relating to the Land and the Leased
Improvements;

(d)
all equipment, machinery, fixtures, and other items of property required for or
incidental to the use of the Leased Improvements as a hotel, including all
components thereof, now and hereafter permanently affixed to or incorporated
into the Leased Improvements, including, without limitation, all furnaces,
boilers, heaters, electrical equipment, heating, plumbing, lighting,
ventilating, refrigerating, incineration, air and water pollution control,
waste disposal, air-cooling and air-conditioning systems and apparatus,
sprinkler systems and fire and theft protection equipment, all of which to the
greatest extent permitted by law are hereby deemed by the parties hereto to
constitute real estate, together with all replacements, modifications,
alterations and additions thereto (collectively, the Fixtures);

(e)
all furniture and furnishings and all other items of personal property
(excluding Inventory and personal property owned by Lessee) located on, and
used in connection with, the operation of the Leased Improvements as a hotel,
together with all replacements, modifications, alterations and additions
thereto; and

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LESS
AND EXCEPT all portions of the foregoing that are leased under Space Leases and
all right, title and interest of Lessor under the Space Leases (including any
rents, security deposits or collateral held by or owing to Lessor pursuant
thereto).

THE LEASED
PROPERTY IS DEMISED IN ITS PRESENT CONDITION WITHOUT REPRESENTATION OR WARRANTY
(EXPRESSED OR IMPLIED) BY LESSOR AND SUBJECT TO THE RIGHTS OF PARTIES IN
POSSESSION, AND TO THE EXISTING STATE OF TITLE INCLUDING ALL COVENANTS,
CONDITIONS, RESTRICTIONS, EASEMENTS AND OTHER MATTERS OF RECORD INCLUDING ALL
APPLICABLE LEGAL REQUIREMENTS AND OTHER MATTERS WHICH WOULD BE DISCLOSED BY AN
INSPECTION OF THE LEASED PROPERTY OR BY AN ACCURATE SURVEY THEREOF.

1.2.
Definitions. For all purposes of this Lease, except as otherwise
expressly provided or unless the context otherwise requires, (a) the terms
defined in this Article have the meanings assigned to them in this Article and
include the plural as well as the singular, (b) all accounting terms not
otherwise defined herein have the meanings assigned to them in accordance with
generally accepted accounting principles as are at the time applicable, (c) all
references in this Lease to designated Articles, Sections and other
subdivisions are to the designated Articles, Sections and other subdivisions of
this Lease and (d) the words herein, hereof and hereunder and other words
of similar import refer to this Lease as a whole and not to any particular
Article, Section or other subdivision:

Additional
Charges: As defined in Section 3.3.

Affiliate:
As used in this Lease the term Affiliate of a Person shall mean (a) any
Person that, directly or indirectly, controls or is controlled by or is under
common control with such Person, (b) any other Person that owns, beneficially,
directly or indirectly, ten percent (10%) or more of the outstanding capital
stock, shares or equity interests of such Person, or (c) any officer, director,
employee, partner, manager or trustee of such Person or any Person controlling,
controlled by or under common control with such Person or any Person that owns,
beneficially, directly or indirectly, ten percent (10%) or more of the
outstanding capital stock, shares or equity interests of such Person (excluding
trustees and Persons serving in similar capacities who are not otherwise an
Affiliate of such Person). For the purposes of this definition, control
(including the correlative meanings of the terms controlled by and under
common control with), as used with respect to any Person, shall mean the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, through the ownership
of voting securities, partnership interests or other equity interests.

Annual
Budget: As used in this Lease, the term Annual Budget shall mean an
operating and capital budget prepared by Lessee and delivered to Lessor in
accordance with Section 4.1.

Annual
Revenues Computation: As defined in Subsection 3.1(b).

Award:
As defined in Subsection 15.1(a).

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Base
Rate: The rate of interest announced publicly by Citibank, N.A., in New
York, New York, from time to time, as such banks base rate. If no such rate is
announced or if such rate becomes discontinued, then such other rate as Lessor
may reasonably designate.

Base
Rent: As defined in Subsection 3.1(a).

Business
Day: Each Monday, Tuesday, Wednesday, Thursday and Friday that is not a day
on which national banks in the City of New York, New York, or in the
municipality wherein the Leased Property is located are closed.

CERCLA:
The Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended.

Change
of Control: The sale, conveyance, assignment, encumbering, pledging,
hypothecation, granting a security interest in, granting of options with
respect to, or other disposition of (directly or indirectly, voluntarily or
involuntarily, by operation of law or otherwise, and whether or not for
consideration) of any class stock or other equity interests in a Person (other
than among existing holders of interests in such Person on the Commencement
Date and/or family members of such holders and/or trusts for the benefit of any
of the foregoing) that, upon a transfer of any portion thereof, will create in
the transferee thereof, directly or indirectly, a majority of any class of
stock or other equity interests of such Person.

Claims:
As defined in Section 12.2.

COBRA:
As defined in Subsection 8.2(b).

Code:
The Internal Revenue Code of 1986, as amended.

Commencement
Date: As defined in Section 2.1.

Competitive
Set: As defined in the STR Reports. Lessor and Lessee shall work in good
faith to determine any additions and deletions to the Hotels Competitive Set,
on or before November 15th of each year, with such changes to be applicable for
the following Fiscal Year. In the event Lessor and Lessee cannot agree to the
Hotels Competitive Set by November 15th of any year, such unagreed items shall
be determined by Smith Travel Research (or, if it refuses or is unable to do
so, by arbitration pursuant to Section 25.2). The costs of resetting the
Hotels Competitive Set shall be borne equally by the parties.

Comparison
Month: As defined in Subsection 3.1(d).

Condemnation,
Condemnor: As defined in Section 15.1

Consolidated
Financials: For any fiscal year or other accounting period for Lessee and
its consolidated subsidiaries, if any, statements of earnings and retained
earnings and of changes in financial position for such period and for the
period from the beginning of the respective fiscal year to the end of such
period and the related balance sheet as at the end of such period,

3

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together with
the notes thereto, all in reasonable detail and setting forth in comparative
form the corresponding figures for the corresponding period in the preceding
fiscal year, and prepared in accordance with generally accepted accounting
principles and audited by independent certified public accountants acceptable
to Lessor in its sole discretion.

Consumer
Price Index: The U.S. City Average, All Items Consumer Price Index for All
Urban Consumers published by the Bureau of Labor Statistics of the United
States Department of Labor (Base: 1982-1984=100), or any successor index
thereto. If the Consumer Price Index is hereafter converted to a different
standard reference base or otherwise revised, any determination hereunder that
uses the Consumer Price Index shall be made with the use of such conversion
factor, formula or table for converting the Consumer Price Index as may be
published by the Bureau of Labor Statistics, or, if the Bureau shall no longer
publish the same, then with the use of such conversion factor, formula or table
as may be published by Prentice Hall, Inc., or, failing such publication, by
any other nationally recognized publisher of similar statistical information.

Date
of Taking: As defined in Subsection 15.1(d).

Encumbrance:
As defined in Section 22.1.

Environmental
Audit: As defined in Subsection 8.3(b).

Environmental
Authority: Any department, agency or other body or component of any
Government that exercises any form of jurisdiction or authority under any
Environmental Law.

Environmental
Authorization: Any license, permit, order, approval, consent, notice,
registration, filing or other form of permission or authorization required
under any Environmental Law.

Environmental
Laws: All applicable federal, state, local and foreign laws and regulations
relating to pollution of the environment (including without limitation, ambient
air, surface water, ground water, land surface or subsurface strata), including
without limitation laws and regulations relating to emissions, discharges,
Releases or threatened Releases of Hazardous Materials or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Hazardous Materials. Environmental Laws include but
are not limited to CERCLA, FIFRA, RCRA, SARA and TSCA.

Environmental
Liabilities: Any and all obligations to pay the amount of any judgment or
settlement, the cost of complying with any settlement, judgment or order for
injunctive or other equitable relief, the cost of compliance or corrective
action in response to any notice, demand or request from an Environmental
Authority, the amount of any civil penalty or criminal fine, and any court
costs and reasonable amounts for attorneys fees, fees for witnesses and
experts, and costs of investigation and preparation for defense of any claim or
any Proceeding, regardless of whether such Proceeding is threatened, pending or
completed, that may be or have been asserted against or imposed upon Lessor,
Lessee, any Predecessor, the Leased Property or any property used therein and
arising out of:

4

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(a)
Failure of Lessee, Lessor, any Predecessor or the Leased Property to comply at
any time with all Environmental Laws;

(b)
Presence of any Hazardous Materials on, in, under, at or in any way affecting the
Leased Property;

(c)
A Release at any time of any Hazardous Materials on, in, at, under or in any
way affecting the Leased Property;

(d)
Identification of Lessee, Lessor or any Predecessor as a potentially responsible
party under CERCLA or under any Environmental Law similar to CERCLA;

(e)
Presence at any time of any above-ground and/or underground storage tanks, as
defined in RCRA or in any applicable Environmental Law on, in, at or under the
Leased Property or any adjacent site or facility; or

(f)
Any and all claims for injury or damage to Persons or property arising out of
exposure to Hazardous Materials originating or located at the Leased Property,
or resulting from operation thereof or any adjoining property.

Event
of Default: As defined in Section 16.1.

Fair
Market Rental: The fair market rental of the Leased Property means the
rental which a willing tenant not compelled to rent would pay a willing
landlord not compelled to lease for the use and occupancy of such Leased
Property pursuant to the Lease for the term in question, (a) assuming that
Lessee is not in default thereunder and (b) determined in accordance with the
appraisal procedures set forth in Article 24 or in such other manner as shall
be mutually acceptable to Lessor and Lessee.

Fair
Market Value: The fair market value of the Leased Property means an amount
equal to the price that a willing buyer not compelled to buy would pay a
willing seller not compelled to sell for such Leased Property, (a) assuming the
same is unencumbered by this Lease, (b) determined in accordance with the
appraisal procedures set forth in Article 24 or in such other manner as shall
be mutually acceptable to Lessor and Lessee, (c) assuming that such seller must
pay customary closing costs and title premiums, and (d) taking into account the
positive or negative effect on the value of the Leased Property attributable to
the interest rate, amortization schedule, maturity date, prepayment penalty and
other terms and conditions of any encumbrance that is assumed by the
transferee. In addition, in determining the Fair Market Value with respect to
damaged or destroyed Leased Property such value shall be determined as if such
Leased Property had not been so damaged or destroyed.

FIFRA:
The Federal Insecticide, Fungicide, and Rodenticide Act, as amended.

Fiscal
Year: The twelve (12) month period from January 1 to December 31, or any
shorter period at the beginning or end of the Term.

5

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Fixtures:
As defined in Section 1.1.

Force
Majeure: An Unavoidable Occurrence, generally affecting travel and/or the
hotel or lodging business in the market and/or submarket in which the Hotel is
located.

Franchise
Agreement: Any franchise agreement or license agreement with a franchisor
(such as Hilton Garden Inn) under which the Hotel is operated.

Furniture
and Equipment: For purposes of this Lease, the terms furniture and
equipment shall mean collectively all furniture, furnishings, wall coverings,
fixtures and hotel equipment and systems located at, or used in connection
with, the Hotel, together with all replacements therefor and additions thereto,
including, without limitation, (i) all equipment and systems required for the
operation of kitchens and bars, laundry and dry cleaning facilities, (ii)
office equipment, (iii) material handling equipment, cleaning and engineering
equipment, (iv) telephone and computerized accounting systems, and (v)
vehicles.

Government:
The United States of America, any state, district or territory thereof, any
foreign nation, any state, district, department, territory or other political
division thereof, or any agency or political subdivision of any of the
foregoing.

Gross
Operating Expenses: The term Gross Operating Expenses shall include (i)
all costs and expenses of operating the Hotel included within the meaning of
the term Total Costs and Expenses contained in the Uniform System and, (ii)
without duplication, the following: all salaries and employee expense and
payroll taxes (including salaries, wages, bonuses and other compensation of all
employees of the Hotel, and benefits including life, medical and disability
insurance and retirement benefits), expenditures described in Section 9.1,
operational supplies, utilities, insurance to be provided by Lessee under the
terms of this Lease, governmental fees and assessments, common area maintenance
costs and other common area fees and assessments, food, beverages, laundry
service expense, the cost of Inventories, license fees, advertising, marketing,
reservation systems and any and all other operating expenses as are reasonably
necessary for the proper and efficient operation of the Hotel and the Leased
Property incurred by Lessee in accordance with the provisions hereof
(excluding, however, (i) federal, state and municipal excise, sales and use
taxes collected directly from patrons and guests or as a part of the sales
price of any goods, services or displays, such as gross receipts, admissions,
cabaret or similar or equivalent taxes paid over to federal, state or municipal
governments, (ii) the cost of insurance to be provided under Article 13, (iii)
expenditures by Lessor pursuant to Article 13 and (iv) payments on any Mortgage
or other mortgage or security instrument on the Hotel); all determined in
accordance with generally accepted accounting principles. No part of Lessees
central office overhead or general or administrative expense (as opposed to
that of the Hotel), and no operating expenses paid or payable by tenants under
Space Leases, shall be deemed to be a part of Gross Operating Expenses, as
herein provided. Reasonable out-of-pocket expenses of Lessee incurred for the
account of or in connection with the Hotel operations, including but not
limited to postage, telephone charges and reasonable travel expenses of employees,
officers and other representatives and consultants of Lessee and its
Affiliates, shall be deemed to be a part of Gross Operating Expenses and such

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Persons shall
be afforded reasonable accommodations, food, beverages, laundry, valet and
other such services by and at the Hotel without charge to such Persons or
Lessee.

Gross
Operating Profit: For any Fiscal Year, the excess of Gross Revenues for
such Fiscal Year over Gross Operating Expenses for such Fiscal Year.

Gross
Revenues: All revenues, receipts, and income of any kind derived directly
or indirectly by Lessee from or in connection with the Hotel (including rentals
or other payments from tenants, lessees, licensees or concessionaires but not
including their gross receipts receipts and not including rentals or other
payments under Space Leases) whether on a cash basis or credit, paid or
collected, determined in accordance with generally accepted accounting
principles, excluding, however: (i) funds furnished by Lessor, (ii) federal,
state and municipal excise, sales, and use taxes collected directly from
patrons and guests or as a part of the sales price of any goods, services or
displays, such as gross receipts, admissions, cabaret or similar or equivalent
taxes and paid over to federal, state or municipal governments, (iii) the
amount of all credits, rebates or refunds to customers, guests or patrons, and
all service charges, finance charges, interest and discounts attributable to
charge accounts and credit cards, to the extent the same are paid to Lessee by
its customers, guests or patrons, or to the extent the same are paid for by
Lessee to, or charged to Lessee by, credit card companies, (iv) gratuities or
service charges actually paid to employees, (v) proceeds of insurance and
condemnation, (vi) proceeds from sales other than sales in the ordinary course
of business, (vii) all loan proceeds from financing or refinancings of the
Hotel or interests therein or components thereof, (viii) judgments and awards,
except any portion thereof arising from normal business operations of the
Hotel, and (ix) items constituting allowances under the Uniform System.

Hazardous
Materials: All chemicals, pollutants, contaminants, wastes and toxic substances,
including without limitation:

(a)
Solid or hazardous waste, as defined in RCRA or any other Environmental Law;

(b)
Hazardous substances, as defined in CERCLA or any other Environmental Law;

(c)
Toxic substances, as defined in TSCA or any other Environmental Law;

(d)
Insecticides, fungicides, or rodenticides, as defined in FIFRA or any other
Environmental Law; and

(e)
Gasoline or any other petroleum product or byproduct, polychlorinated biphenyl,
asbestos and urea formaldehyde.

Hotel:
The hotel and/or other facility offering lodging and other services or
amenities being operated or proposed to be operated on the Leased Property.

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Hotel
Market Decline: A period of six (6) consecutive calendar months during
which there is (i) a twenty percent (20%) decline in average hotel occupancy
for the Hotel from the average hotel occupancy levels for same period during
the prior calendar year and (ii) a twenty percent (20%) decline in average
hotel occupancy for the Hotels Competitive Set from the average hotel
occupancy levels for the same period during the prior calendar year, as
published in the applicable STR Reports.

Impositions:
Collectively, all taxes (including, without limitation, all ad valorem, sales
and use, single business, gross receipts, transaction, privilege, rent or
similar taxes as the same relate to or are imposed upon Lessee or its business
conducted upon the Leased Property), assessments (including, without
limitation, all assessments for public improvements or benefit, whether or not
commenced or completed prior to the date hereof and whether or not to be
completed within the Term), ground rents, water, sewer or other rents and
charges, excises, tax inspection, authorization and similar fees and all other
governmental charges, in each case whether general or special, ordinary or
extraordinary, or foreseen or unforeseen, of every character in respect of the
Leased Property or the business conducted thereon by Lessee (including all
interest and penalties thereon caused by any failure in payment by Lessee),
which at any time prior to, during or with respect to the Term hereof may be
assessed or imposed on or with respect to or be a lien upon (a) Lessors
interest in the Leased Property, (b) the Leased Property, or any part thereof
or any rent therefrom or any estate, right, title or interest therein, or (c)
any occupancy, operation, use or possession of, or sales from, or activity
conducted on or in connection with the Leased Property, or the leasing or use
of the Leased Property or any part thereof by Lessee. Nothing contained in this
definition of Impositions shall be construed to require Lessee to pay (1) any
tax based on net income (whether denominated as a franchise or capital stock or
other tax) imposed on Lessor or any other Person, or (2) any net revenue tax of
Lessor or any other Person, or (3) any tax imposed with respect to the sale,
exchange or other disposition by Lessor of any Leased Property or the proceeds
thereof, or (4) any single business, gross receipts (other than a tax on any
rent received by Lessor from Lessee), transaction, privilege or similar taxes
as the same relate to or are imposed upon Lessor, except to the extent that any
tax, assessment, tax levy or charge that Lessee is obligated to pay pursuant to
the first sentence of this definition and that is in effect at any time during
the Term hereof is totally or partially repealed, and a tax, assessment, tax
levy or charge set forth in clause (1) or (2) is levied, assessed or imposed
expressly in lieu thereof.

Indemnified
Party: Either of a Lessee Indemnified Party or a Lessor Indemnified Party.

Indemnifying
Party: Any party obligated to indemnify an Indemnified Party pursuant to
Sections 8.3 or 18.1.

Insurance
Requirements: All terms of any insurance policy required by this Lease and
all requirements of the issuer of any such policy.

Inventory:
All Inventories of Merchandise and Inventories of Supplies as defined in
the Uniform System, including without limitation linens, china, silver,
glassware and other non-depreciable personal property, and including any
property of the type described in Section 1221(1) of the Code.

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Land:
As defined in Section 1.1.

Lease:
This Lease.

Leased
Improvements; Leased Property: Each as defined in Section 1.1.

Legal
Requirements: All federal, state, county, municipal and other governmental
statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and
injunctions affecting either the Leased Property or the maintenance,
construction, use or alteration thereof (whether by Lessee or otherwise),
whether now in force or hereafter enacted and in force, including (a) all laws,
rules or regulations pertaining to the environment, occupational health and
safety and public health, safety or welfare, and (b) any laws, rules or
regulations that may (1) require repairs, modifications or alterations in or to
the Leased Property or (2) in any way adversely affect the use and enjoyment
thereof; and all permits, licenses and authorizations and regulations relating
thereto and all covenants, agreements, restrictions and encumbrances contained
in any instruments, either of record or known to Lessee (other than
encumbrances created by Lessor without the consent of Lessee), at any time in
force affecting the Leased Property.

Lending
Institution: Any insurance company, credit company, federally-insured
commercial or savings bank, national banking association, savings and loan
association, employees welfare, pension or retirement fund or system, corporate
profit sharing or pension trust, college or university, or real estate
investment trust, including any corporation qualified to be treated for federal
tax purposes as a real estate investment trust, such trust having a net worth
of at least $10,000,000.

Lessee:
The Lessee designated in this Lease and its respective permitted successors and
assigns.

Lessee
Indemnified Party: Lessee, any Affiliate of Lessee, any other Person
against whom any claim for indemnification may be asserted hereunder as a
result of a direct or indirect ownership interest (including a stockholders or
members interest) in Lessee, the officers, directors, stockholders, members,
managers, employees, agents and representatives of Lessee, and the respective
heirs, personal representatives, successors and assigns of any such officer,
director, stockholder, member, manager, employee, agent or representative.

Lessees
Personal Property: As defined in Section 6.2.

Lessor:
The Lessor designated in this Lease and its respective successors and assigns.

Lessor
Indemnified Party: Lessor, any Affiliate of Lessor, any other Person
against whom any claim for indemnification may be asserted hereunder as a
result of a direct or indirect ownership interest (including a stockholders or
partnership interest) in Lessor, the officers, directors, stockholders,
members, managers, employees, agents and representatives of the general partner
of Lessor and any partner, agent, or representative of Lessor, and the
respective heirs,

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personal
representatives, successors and assigns of any such officer, director,
stockholder, partner, member, manager, employee, agent or representative.

Licenses:
As defined in Subsection 2.3(a).

Management
Agreement: The agreement pursuant to which Manager operates the Hotel.

Manager:
Stonebridge Realty Advisors, Inc., a Colorado corporation, or any successor
manager that is retained by Lessee to operate the Hotel pursuant to this Lease
and the Franchise Agreement.

Minimum
Price: The sum of (a) the equity in the Leased Property at the time of
acquisition of the Leased Property by Lessor, plus (b) other capital
expenditures on the Leased Property by Lessor after the date hereof (less
depreciation and amortization thereof) plus (c) the unpaid principal balance of
all encumbrances against the Leased Property at the time of purchase of the
Leased Property by Lessee, less (x) all proceeds received by Lessor from any
financing or refinancing of the Leased Property after the date hereof (after
payment of any debt refinanced and net of any costs and expenses incurred in
connection with such financing or refinancing, including, without limitation,
loan points, commitment fees and commissions and legal fees) and (y) the net
amount (after deduction of all reasonable legal fees and other costs and
expenses, including without limitation expert witness fees, incurred by Lessor
in connection with obtaining any such proceeds or award) of all insurance
proceeds received by Lessor and awards received by Lessor from any partial
Taking of the Leased Property that are not applied to restoration.

Mortgage:
As defined in Section 22.2.

National
Economic Decline: A period of six (6) consecutive calendar months during
which there occurs or continues a ten percent (10%) decline in average hotel
occupancy, from average hotel occupancy levels for the same period during the
prior calendar year, for all open and operating hotels in the United States as
determined from the applicable STR Reports or, if the STR Reports are not
longer published, other reputable national economic data regarding the
hospitality industry.

Notice:
As defined in Article 26.

Officers
Certificate: A certificate of Lessee reasonably acceptable to Lessor,
signed by the chief financial officer or another officer authorized so to sign
by the board of directors or other governing body of Lessee, or bylaws or
limited liability company agreement of Lessee, or any other Person whose power
and authority to act has been authorized by delegation in writing by any such officer.

Optional
Termination Date: As defined in Section 2.2.

Overdue
Rate: On any date, a rate equal to the Base Rate plus five percent (5%) per
annum, but in no event greater than the maximum rate then permitted under
applicable law.

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Payment
Date: Any due date for the payment of any installment of Base Rent.

Percentage
Rent: As defined in Subsection 3.1(b).

Person:
Any Government, natural person, corporation, general or limited partnership,
limited liability company, stock company or association, joint venture,
association, company, trust, bank, trust company, land trust, business trust,
or other entity.

Personal
Property Taxes: All personal property taxes imposed on the furniture,
furnishings or other items of personal property located on, and used in
connection with, the operation of the Leased Improvements as a hotel (other
than Inventory and other personal property owned by Lessee), together with all
replacement, modifications, alterations and additions thereto.

Predecessor:
Any Person whose liabilities arising under any Environmental Law have or may
have been retained or assumed by Lessor or Lessee, either contractually or by
operation of law, relating to the Leased Property.

Primary
Intended Use: As defined in Subsection 7.2(b).

Proceeding:
Any judicial action, suit or proceeding (whether civil or criminal), any
administrative proceeding (whether formal or informal), any investigation by a
governmental authority or entity (including a grand jury), and any arbitration,
mediation or other non-judicial process for dispute resolution.

RCRA:
The Resource Conservation and Recovery Act, as amended.

Real
Estate Taxes: All real estate taxes, including general and special
assessments, if any, which are imposed upon the Land, and any improvements
thereon.

Regional
Market Decline: A period of six (6) consecutive calendar months during
which there is a twenty percent (20%) decline in average hotel occupancy from
hotel occupancy levels for the same period during the then prior calendar year,
for all open and operating hotels in the Smith Travel Research Region in which
the Hotel is located, as determined from applicable STR Reports or, if the STR
Reports are no longer published, other reputable regional economic data
regarding the hospitality industry.

Rejectable
Offer Price: An amount equal to the greater of (a) the Fair Market Value,
determined as of the applicable purchase date, or (b) the Minimum Price.

Release:
A Release as defined in CERCLA or in any Environmental Law, unless such Release
has been properly authorized and permitted in writing by all applicable
Environmental Authorities or is allowed by such Environmental Law without
authorizations or permits.

Rent:
Collectively, the Base Rent, Percentage Rent and Additional Charges.

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Repositioning:
As defined in Section 3.6.

SARA:
The Superfund Amendments and Reauthorization Act of 1986, as amended.

Solvent:
As to any Person, (a) the sum of the assets of such Person exceeds its
liabilities and (b) such Person has sufficient capital with which to conduct
its business as presently conducted and as proposed to be conducted.

Space
Leases: With respect to the Land and Leased Improvements, all leases,
licenses, occupancy agreements, or other agreements, demising space in,
providing for the use or occupancy of, or otherwise similarly affecting or
relating to the use or occupancy of, the Leased Improvements or Land, including
(without limitation) the leases described in Exhibit B attached hereto,
together with all amendments, modifications, renewals and extensions thereof,
and all guaranties by third parties of the obligations of the tenants
thereunder, and any successor leases for such space. Space Leases shall
specifically exclude hotel room or suite rental to hotel guests or convention
or meeting space rental, each conducted in the ordinary course of business in
the operation of a hotel.

State:
The state or commonwealth in which the Hotel is located.

STR
Reports: Reports compiled by Smith Travel Research, or its successor, which
contain historical supply and demand, occupancy, and average rate information
for the Hotel and hotels with which it competes (or, in the event that Smith
Travel Research discontinues providing such information, reports of similar
nature compiled by an authority recognized nationally in the hospitality
industry).

Subsidiaries:
Persons in which Lessee owns, directly or indirectly, more than fifty percent
(50%) of the voting stock or control, as applicable.

Suite
Revenue Breakpoint: As defined in Subsection 3.1(b).

Suite
Revenues: All revenues, receipts, and income of any kind derived directly
or indirectly by Lessee from or in connection with (i) the rental of guest
rooms or suites, whether to individuals, groups or transients, at the Hotel and
(ii) the Hotels meeting rooms, telephones, TV and movie rentals, check room,
washroom, laundry, valet, vending machines, and other sources (other than Space
Leases), in each case, whether on a cash basis or credit, paid or collected,
determined in accordance with generally accepted accounting principles, but, in
each case, excluding the following:

(a)
The amount of all credits, rebates or refunds to customers, guests or patrons,
and all service charges, finance charges, interest and discounts attributable
to charge accounts and credit cards, to the extent the same are paid to Lessee
by its customers, guests or patrons, or to the extent the same are paid for by
Lessee to, or charged to Lessee by, credit card companies;

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(b)
All sales taxes or any other taxes imposed on the rental of such guest rooms or
suites or imposed in connection with the Hotels meeting rooms, telephones, TV
and movie rentals, check room, washroom, laundry, valet, vending machines, and
other sources of revenue;

(c)
Gratuities or service charges actually paid to employees; and

(d)
Proceeds of business interruption and other insurance.

Taking:
A taking or voluntary conveyance during the Term hereof of all or part of the
Leased Property, or any interest therein or right accruing thereto or use
thereof, as the result of, or in settlement of, any Condemnation or other
eminent domain Proceeding affecting the Leased Property whether or not the same
shall have actually been commenced.

Term:
As defined in Section 2.1.

TSCA:
The Toxic Substances Control Act, as amended.

Unavoidable
Delays: Delays due to strikes, lock-outs, labor unrest, inability to
procure materials, power failure, acts of God, governmental restrictions, enemy
action, civil commotion, fire, unavoidable casualty or other causes beyond the
control of the party responsible for performing an obligation hereunder,
provided that lack of funds shall not be deemed a cause beyond the control of
either party hereto unless such lack of funds is caused by the failure of the
other party hereto to perform any obligations of such party under this Lease or
any guaranty of this Lease.

Unavoidable
Occurrence. The occurrence of strikes, lockouts, labor unrest, gasoline and
other energy shortages, widespread disruption of air, auto or other travel,
inability to procure materials or services, power or other utility failure,
acts of God (such as hurricanes, tornadoes, earthquakes, floods and mud
slides), governmental restrictions, war or other enemy or terrorist action,
civil commotion, fire, casualty, condemnation or other similar causes, in each
case, if such cause is beyond the reasonable control of Lessee; provided that
(i) lack of funds shall not be deemed a cause beyond the reasonable control of
either party hereto unless such lack of funds is caused by the failure of the
other party hereto to perform any obligations of such party under this Lease or
any guaranty of this Lease, and (ii) any such occurrence is an extraordinary,
as opposed to a routine or cyclical, material event that was not reasonably
foreseeable when the then-applicable Annual Budget was prepared.

Uneconomic
for its Primary Intended Use: A state or condition of the Hotel such that,
in the good faith judgment of Lessee, reasonably exercised and evidenced by the
resolution of the board of directors or other governing body of Lessee, the
Hotel cannot be operated on a commercially practicable basis for its Primary
Intended Use, taking into account, among other relevant factors, the number of
usable rooms and projected revenues, such that Lessee intends to, and shall,
complete the cessation of operations from the Leased Hotel.

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Uniform
System: The Uniform System of Accounts for Hotels (9th Revised Edition,
1996) as published by the American Hotel and Lodging Association, with such
later revisions as may be agreed to by both Lessor and Lessee.

Unsuitable
for its Primary Intended Use: A state or condition of the Hotel such that,
in the good faith judgment of Lessee, reasonably exercised and evidenced by the
resolution of the board of directors or other governing body of Lessee, due to
casualty damage or loss through Condemnation, the Hotel cannot function as an
integrated hotel facility consistent with standards applicable to a well
maintained and operated hotel.

WARN
Act: As defined in Subsection 8.2(b).

Working
Capital: Funds reasonably necessary for the day-to-day operation of the
Hotels business for a thirty (30) day period, including, without limitation,
amounts sufficient for the maintenance of change and petty cash funds,
operating bank accounts, payrolls, accounts payable, accrued current liabilities,
and funds required to maintain Inventories.

ARTICLE 2 TERM; TERMINATION

2.1.
Term.

(a)
The term of the Lease (the Term) shall commence on the date specified in Schedule
2.1 (the Commencement Date), and shall end on the tenth (10th)
anniversary of the Commencement Date, unless sooner terminated in accordance
with the provisions hereof or extended to an anniversary of the initial
expiration date pursuant to this Article 2.

(b)
Lessee is granted the option to extend the Term of this Lease for a period of
five (5) years (the First Extension), provided that Lessee is not in default
hereunder either at the time of deemed exercise of the option or at the end of
the original Term, which option must be exercised by written notice to Lessor
at least one hundred twenty (120) days prior to the expiration of the original
Term. The First Extension shall be upon the same terms, conditions and rentals
as set forth herein for the original Term.

(c)
Lessee is granted an option to extend the Term for a period commencing at the
expiration of the First Extension and ending on March 3, 2031 (the Second
Extension), provided that Lessee is not in default hereunder either at the
time of exercise of the option or at the end of the First Extension, which
option must be exercised by written notice to Lessor at least one hundred
twenty (120) days prior to the expiration of the First Extension. If such
option is exercised, Lessor and Lessee shall negotiate in good faith
modifications to the Rent for the Second Extension to adjust such Rent to
market rates for arms-length hotel REIT leases between unrelated parties for
similar hotel properties at that time. In the event Lessor and Lessee are
unable to agree upon Rent terms for the Second Extension at least ninety (90)
days prior to the expiration of the Term, the Rent terms for the Second
Extension shall be determined by a panel of three (3) persons who have
generally recognized expertise in evaluating hotel REIT leases and who are not
Affiliates

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of Lessor or
Lessee. Lessee and the Lessor each shall have the right to designate one panel
member and the two (2) panel members so designated will designate the third
panel member. Rent terms approved by at least two (2) of the three (3) panel
members will be binding on Lessee and Lessor for the Second Extension, which
shall be otherwise on the terms set forth herein. In determining the market
rates for the Second Extension, the panel members shall be instructed to
consider hotel REIT lease terms with respect to similar hotel property types.
The Second Extension shall be otherwise upon the same terms and conditions as
set forth herein for the original Term.

2.2.
Lessors Option to Terminate Lease. In the event Lessor enters into a
bona fide contract to sell the Leased Property to a non-Affiliate, there is a
Change of Control of Lessor, or the provisions of the Code are amended to
permit Lessor to operate hotels or otherwise render the structure embodied by
this Lease to be obsolete, Lessor may terminate the Lease by giving not less
than thirty (30) days prior Notice to Lessee of Lessors election to terminate
the Lease effective upon, as appropriate, the closing under such contract, the
date of such Change of Control, or the effective date of such amendment to the
Code (or any other specified date within 30 days after such date) (the
Optional Termination Date). Effective upon the Optional Termination Date,
this Lease shall terminate and be of no further force and effect except as to
any obligations of the parties existing as of such date that survive
termination of this Lease. As compensation for the early termination of its
leasehold estate under this Section 2.2, Lessor shall within 12 months of the
Optional Termination Date either (a) pay to Lessee the fair market value of
Lessees leasehold estate hereunder plus interest thereon at the Base Rate as
of the Optional Termination Date or (b) offer to lease to Lessee one or more
substitute hotel facilities pursuant to one or more leases that would create
for Lessee leasehold estates that have an aggregate fair market value of no
less than the fair market value of the original leasehold estate, both such
values as determined as of the Optional Termination Date. Lessor also shall pay
to Lessee, or reimburse Lessee for any assignment fees, termination fees or
other liabilities arising under the Franchise Agreement or Management Agreement
solely as a result of the assignment or termination of such Franchise Agreement
or Management Agreement in connection with the termination of this Lease under
this Section 2.2. If Lessor elects and complies with the option described in
(b) above, regardless of whether Lessee enters into the lease(s) described
therein, Lessor shall have no further obligations to Lessee with respect to
compensation for the early termination of this Lease. In the event Lessor and
Lessee are unable to agree upon the fair market value of an original or
replacement leasehold estate, it shall be determined by appraisal using the
appraisal procedure set forth in Article 24.

For
the purposes of this Article, fair market value of the leasehold estate means,
as applicable, an amount equal to the price that a willing buyer not compelled
to buy would pay a willing seller not compelled to sell for Lessees leasehold
estate under this Lease or an offered replacement leasehold estate, taking into
account that the leasehold estate is encumbered by the Franchise Agreement and
an arms-length Management Agreement.

2.3.
Transition Procedures. Upon the expiration or termination of the Term of
this Lease, for whatever reason (other than a purchase of the Leased Property
by Lessee), Lessor and Lessee shall do the following (and the provisions of this
Section 2.3 shall survive the expiration or termination of this Lease until
they have been fully performed) and, in general, shall cooperate in good faith
to effect an orderly transition of the management and/or lease of the Hotel:

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(a)
Transfer of Licenses. Lessee shall use reasonable efforts (i) to
transfer to Lessor or Lessors nominee all licenses, operating permits and
other governmental authorizations and all contracts, including contracts with
governmental or quasi-governmental entities, that may be necessary for the
operation of the Hotel (collectively, Licenses), or (ii) if such transfer is
prohibited by law or Lessor otherwise elects, to cooperate with Lessor or
Lessors nominee in connection with the processing by Lessor or Lessors
nominee of any applications for, all Licenses; provided, in either case, that
the costs and expenses of any such transfer or the processing of any such
application shall be paid by Lessor or Lessors nominee.

(b)
Leases and Concessions. Lessee shall assign to Lessor or Lessors
nominee simultaneously with the termination of this Lease, and the assignee
shall assume, all leases and concession agreements in effect with respect to
the Hotel then in Lessees name.

(c)
Books and Records. All books and records for the Hotel kept by Lessee
pursuant to Section 4.2 shall be delivered promptly to Lessor or Lessors
nominee, simultaneously with the termination of this Lease, but such books and
records shall thereafter be available to Lessee at all reasonable times for
inspection, audit, examination, and transcription for a period of one (1) year
and Lessee may retain (on a confidential basis) copies or computer records
thereof.

(d)
Receivables and Payables. Lessee shall be entitled to retain all cash,
bank accounts and house banks, and to collect all Gross Revenues and accounts
receivable accrued through the termination date. Lessee shall be responsible
for the payment of Rent, all Gross Operating Expenses and all other obligations
of Lessee accrued under this Lease as of the termination date, and Lessor or
Lessors nominee shall be responsible for all Gross Operating Expenses of the
Hotel accruing after the termination date.

(e)
Final Accounting. Lessee shall, within forty five (45) days after the
expiration or termination of the Term, prepare and deliver to Lessor a final
accounting statement, dated as of the date of the expiration or termination,
along with a statement of any sums due from Lessee to Lessor pursuant hereto
and payment of such funds.

(f)
Inventory. Lessee shall insure that the Leased Property, at the date of
such termination or expiration, has Inventory of a substantially equivalent
nature and amount as exists at the Leased Property on the Commencement Date,
and Lessor or its designee shall acquire such Inventory from Lessee for a sale
price equal to the fair market value of such Inventory.

(g)
Surrender. Lessee will, upon the expiration or prior termination of the
Term, vacate and surrender the Leased Property to Lessor in the condition in
which the Leased Property was originally received from Lessor, except as
repaired, rebuilt, restored, altered or added to as permitted or required by
the provisions of this Lease and except for ordinary wear and tear (subject to
the obligation of Lessee to maintain the Leased Property in good order and
repair, as would a prudent owner, during the entire Term of the Lease), or
damage by casualty or Condemnation (subject to the obligations of Lessee to
restore or repair as set forth in the Lease)

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The
provisions of this Section 2.3 shall survive the expiration or termination of
this Lease until they have been fully performed. Nothing contained herein shall
limit Lessors rights and remedies under this Lease if such termination occurs
as the result of an Event of Default.

2.4.
Holding Over. If Lessee for any reason remains in possession of the
Leased Property after the expiration or earlier termination of the Term, such
possession shall be as a tenant at sufferance during which time Lessee shall
pay as rental each month 150% of the aggregate of (a) one-twelfth of the
aggregate Base Rent and Percentage Rent payable with respect to the last Fiscal
Year of the Term, (b) all Additional Charges accruing during the applicable
month and (c) all other sums, if any, payable by Lessee under this Lease with
respect to the Leased Property. During such period, Lessee shall be obligated
to perform and observe all of the terms, covenants and conditions of this
Lease, but shall have no rights hereunder other than the right, to the extent
given by law to tenancies at sufferance, to continue its occupancy and use of
the Leased Property. Nothing contained herein shall constitute the consent,
express or implied, of Lessor to the holding over of Lessee after the
expiration or earlier termination of this Lease.

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ARTICLE 3
RENT; RENT ADJUSTMENTS

3.1.
Rent. Lessee will pay to Lessor in lawful money of the United States of
America which shall be legal tender for the payment of public and private
debts, in immediately available funds, at Lessors address set forth in Article
26 hereof or at such other place or to such other Person as Lessor from time to
time may designate in a Notice, all Base Rent, Percentage Rent and Additional
Charges, during the Term, as follows:

(a)
Base Rent: The annual sum specified in Schedule 3.1(a) (prorated
for fiscal year 2011), as adjusted pursuant to Subsection 3.1(d) hereof,
payable in advance in equal, consecutive monthly installments, on or before the
tenth day of each calendar month of the Term (Base Rent); provided, however,
that the first monthly payment of Base Rent shall be payable during the second
calendar month of the Term, and that the first and last monthly payments of
Base Rent shall be pro rated as to any partial month (subject to adjustment as
provided in Sections 14.5, 15.3 and 15.5).

(b)
Percentage Rent: For each fiscal year during the Term commencing with
the fiscal year in which the Commencement Date falls and ending with the fiscal
year in which the Term (including any applicable extensions) ends, Lessee shall
pay percentage rent (Percentage Rent).

Percentage
Rent for the applicable Fiscal Year shall be an amount equal to the applicable Annual Revenues Computation
(as defined below) less an amount equal to the Base Rent paid with respect to
such Fiscal Year.

For the
purpose of the foregoing calculation:

The
annual revenues computation (Annual Revenues Computation) is equal to the
amount obtained by adding, for the applicable Fiscal Year, an amount equal to
the sum of (i) seventeen percent (17%) of all Suite Revenues for the applicable
Fiscal Year up to the applicable suite revenue breakpoint (the Suite Revenue
Breakpoint) described in Schedule 3.1(b), attached hereto, (prorated
for the first and last Fiscal Year of the Term (including any applicable
extensions)) and fifty-five percent (55%) of all Suite Revenues for the
applicable Fiscal Year in excess of the applicable Suite Revenue Breakpoint. At
the beginning of each Fiscal Year, the Suite Revenue Breakpoints shall be
adjusted by the same percentage that the Base Rent is adjusted pursuant to
Subsection 3.1(d).

The Percentage
Rent shall be payable as follows:

| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) | with respect
 to each calendar month of the Term, Lessee shall pay on or before the last
 day of the calendar month an amount equal to the excess, if any, of (A) seventy-five
 percent (75%) of the amount of Lessees budgeted Percentage Rent payable with
 respect to the then current calendar month (which budgeted amount shall be
 equal to one-twelfth (1/12) of the annual estimate of Percentage Rent
 included in the

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| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      | Annual
 Budget for the Fiscal Year in which the calendar month occurs) over (B) Base
 Rent for such calendar month; and                                                                                                                                                                                                                                                                                                            
| |      |                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | (ii) | with respect
 to each Fiscal Year of the Term, Lessee shall pay on or before the 15th day
 following the end of the Fiscal Year an amount equal to the amount by which
 the aggregate amount of all payments pursuant to Section 3.1(b)(i) in respect
 of Percentage Rent for such Fiscal Year shall be less than one hundred
 percent (100%) of the estimated Percentage Rent included in the Annual Budget
 for such Fiscal Year.

In no event
will the amount of Percentage Rent payable for any Fiscal Year or the result of
any Annual Revenues Computation be less than zero, and there shall be no
reduction in the Base Rent regardless of the result of any Annual Revenues
Computation.

(c)
Officers Certificates. On or before March 1 of each year, commencing
with March 1, 2012, Lessee shall deliver to Lessor an Officers Certificate
reasonably acceptable to Lessor setting forth the computation of the actual
Percentage Rent that accrued for the Fiscal Year that ended on the immediately
preceding December 31. If the annual Percentage Rent due and payable for any
Fiscal Year (as shown in the applicable Officers Certificate) exceeds the
amount actually paid as Percentage Rent by Lessee for such year, Lessee shall
pay such excess to Lessor at the time such certificate is delivered. If the
Percentage Rent actually due and payable for such Fiscal Year is shown by such
certificate to be less than the amount actually paid as Percentage Rent for the
applicable Fiscal Year, Lessor, at its option, shall reimburse such amount to
Lessee or credit such amount against subsequent months Base Rent, and with
respect to Percentage Rent, to the extent necessary, subsequent months
Percentage Rent payments. Any such credit to Base Rent shall not be applied for
purposes of calculating Percentage Rent payable for any subsequent month.

Any
difference between the annual Percentage Rent due and payable for any Fiscal
Year (as shown in the applicable Officers Certificate or as adjusted pursuant
to Section 3.3) and the total amount of monthly payments for such Fiscal Year
actually paid by Lessee as Percentage Rent, whether in favor of Lessor or Lessee,
shall bear interest at the Overdue Rate, which interest shall accrue from the
due date of the last monthly payment for the Fiscal Year until the amount of
such difference shall be paid or otherwise discharged. Any such interest
payable to Lessor shall be deemed to be and shall be payable as Additional
Charges.

The
obligation to pay Percentage Rent shall survive the expiration or earlier
termination of the Term, and a final reconciliation, taking into account, among
other relevant adjustments, any adjustments which are accrued after such
expiration or termination date but which related to Percentage Rent accrued
prior to such termination date, and Lessees good faith best estimate of the
amount of any unresolved contractual allowances, shall be made not later than
two (2) years after such expiration or termination date, but Lessee shall
advise Lessor within sixty (60) days after such expiration or termination date
of Lessees best estimate at that time of the approximate amount of such
adjustments, which estimate shall not be binding on Lessee or have any legal
effect whatsoever.

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(d)
CPI Adjustments to Base Rent and Percentage Rent. For each year of the
Term beginning on or after January 1, 2012, the Base Rent shall be adjusted
from time to time as follows:

| |                                                                                                                                                                                                                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1)
 If the most recently published Consumer Price Index as of the last day of the
 last month (the Comparison Month) of any Fiscal Year is different than the
 average Consumer Price Index for the twelve (12) month period prior thereto,
 the Base Rent for the next Fiscal Year shall be adjusted by the percentage
 change in the Consumer Price Index calculated as follows:
| |                                                                                                                                                                                                                                                                                                                                                                                      
| | (A)
 The difference between the Consumer Price Index for the most recent
 Comparison Month and the average Consumer Price Index for the twelve (12)
 month period prior thereto shall be divided by the average Consumer Price
 Index for the twenty four (24) month period prior thereto.                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                      
| | (B)
 The Base Rent shall be multiplied by the lesser of (i) seven percent (7%) or
 (ii) the quotient obtained in subparagraph (d)(1)(A) above.                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                      
| | (C)
 The product obtained in subparagraph (d)(1)(B) above shall be added to the
 Base Rent.                                                                                                                                                                                                                                                                                          

Adjustments
in the Base Rent shall be effective on the first day of the first calendar
month of the Fiscal Year to which such adjusted Base Rent applies. The Suite
Revenue Breakpoint then included in the Annual Revenues Computation pursuant to
Subsection 3.1(b) shall be similarly adjusted, effective with any such
adjustment in the Base Rent.

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2)
 If (i) a significant change is made in the number or nature (or both) of
 items used in determining the Consumer Price Index, or (ii) the Consumer
 Price Index shall be discontinued for any reason, the Bureau of Labor
 Statistics shall be requested to furnish a new index comparable to the
 Consumer Price Index, together with information which will make possible a
 conversion to the new index in computing the adjusted Base Rent hereunder. If
 for any reason the Bureau of Labor Statistics does not furnish such an index
 and such information, the parties will instead mutually select, accept and
 use such other index or comparable statistics on the cost of living in
 Washington, D.C. that is computed and published by an agency of the United
 States or a responsible financial periodical of recognized authority.

(e)
Manager Fund-up Cure Payments. If and to the extent that Manager pays
amounts to Lessee pursuant to the Management Agreement in order to avoid
termination of the Management Agreement by Lessee for Managers failure to meet
certain performance hurdles described therein, such amounts shall be treated as
additional Suite Revenues for purposes of the Percentage Rent calculation
hereunder.

(f)
Allocation of Rent. The parties hereto acknowledge and agree that the
Base Rent paid or payable by Lessee to Lessor hereunder shall, to the extent
relevant, be allocated between the personal property and real property
constituting Leased Property hereunder in direct

20

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proportion to
the then recognizable fair market value of such personal property and real
property. Percentage Rent in excess of Base Rent shall be allocated solely to
real property.

3.2.
Confirmation of Percentage Rent. Lessee shall utilize, or cause to be
utilized, an accounting system for the Leased Property in accordance with its
usual and customary practices, and in accordance with generally accepted
accounting principles, that will accurately record all data necessary to
compute Percentage Rent, and Lessee shall retain, for at least four (4) years
after the expiration of each Fiscal Year (and in any event until the
reconciliation described in Subsection 3.1(c) for such Fiscal Year has been
made), reasonably adequate records conforming to such accounting system showing
all data necessary to compute Percentage Rent for the applicable Fiscal Years.
Lessor, at its expense (except as provided hereinbelow), shall have the right
from time to time, upon prior written notice to Lessee and Manager, by its
accountants or representatives to audit the information that formed the basis
for the data set forth in any Officers Certificate provided under Subsection
3.1(d) and, in connection with such audits, to examine all Lessees records
(including supporting data and sales and excise tax returns) reasonably
required to verify Percentage Rent, subject to any prohibitions or limitations
on disclosure of any such data under Legal Requirements; provided, however that
Lessor may only inspect or audit records in Managers possession subject to the
terms of Lessees access thereto under the Management Agreement. If any such
audit discloses a deficiency in the payment of Percentage Rent, and either
Lessee agrees with the result of such audit or the matter is otherwise
determined or compromised, Lessee shall forthwith pay to Lessor the amount of
the deficiency, as finally agreed or determined, together with interest at the
Overdue Rate from the date when said payment should have been made to the date
of payment thereof; provided, however, that as to any audit that is commenced
more than two (2) years after the date Percentage Rent for any Fiscal Year is
reported by Lessee to Lessor, the deficiency, if any, with respect to such
Percentage Rent shall bear interest at the Overdue Rate only from the date such
determination of deficiency is made unless such deficiency is the result of
gross negligence or willful misconduct on the part of Lessee, in which case
interest at the Overdue Rate will accrue from the date such payment should have
been made to the date of payment thereof. If any such audit discloses that the
Percentage Rent actually due from Lessee for any Fiscal Year exceed those
reported by Lessee by more than three percent (3%), Lessee shall pay the cost
of such audit and examination. Any proprietary information obtained by Lessor
pursuant to the provisions of this Section shall be treated as confidential,
except that such information may be used, subject to appropriate
confidentiality safeguards, in any litigation between the parties and except
further that Lessor may disclose such information to prospective lenders. The
obligations of Lessee contained in this Section shall survive the expiration or
earlier termination of this Lease.

3.3.
Additional Charges. In addition to the Base Rent and Percentage Rent,
(a) Lessee also will pay and discharge as and when due and payable all other
amounts, liabilities, obligations and Impositions that Lessee assumes or agrees
to pay under this Lease, and (b) in the event of any failure on the part of
Lessee to pay any of those items referred to in clause (a) of this Section 3.3,
Lessee also will promptly pay and discharge every fine, penalty, interest and
cost that may be added for non-payment or late payment of such items (the items
referred to in clauses (a) and (b) of this Section 3.3 being additional rent
hereunder and being referred to herein collectively as the Additional
Charges), and Lessor shall have all legal, equitable and contractual rights,
powers and remedies provided either in this Lease or by statute or otherwise in
the case of non-payment of the Additional Charges as in the case of non-payment
of the Base Rent. If any installment of Base Rent

21

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and Percentage
Rent or Additional Charges (but only as to those Additional Charges that are
payable directly to Lessor) shall not be paid on its due date, Lessee will pay
Lessor on demand, as Additional Charges, a late charge (to the extent permitted
by law) computed at the Overdue Rate on the amount of such installment, from
the due date of such installment to the date of payment thereof. To the extent
that Lessee pays any Additional Charges to Lessor pursuant to any requirement
of this Lease, Lessee shall be relieved of its obligation to pay such
Additional Charges to the entity to which they would otherwise be due and
Lessor shall pay same from monies received from Lessee.

3.4.
Net Lease; No Termination, Abatement, Etc.

(a)
The Rent shall be paid absolutely net to Lessor, so that this Lease shall yield
to Lessor the full amount of the installments of Base Rent, Percentage Rent and
Additional Charges throughout the Term, all as more fully set forth in Article
5, but subject to any other provisions of this Lease that expressly provide for
adjustment or abatement of Rent or other charges or expressly provide that
certain expenses or maintenance shall be paid or performed by Lessor.

(b)
Except as otherwise specifically provided in this Lease, and except for loss of
the Franchise Agreement solely by reason of any action or inaction by Lessor,
Lessee, to the extent permitted by law, shall remain bound by this Lease in
accordance with its terms and shall neither take any action without the written
consent of Lessor (which shall not be unreasonably withheld or delayed) to
modify, surrender or terminate the same, nor seek nor be entitled to any
abatement, deduction, deferment or reduction of the Rent, or setoff against the
Rent, nor shall the obligations of Lessee be otherwise affected by reason of
(a) any damage to, or destruction of, any Leased Property or any portion
thereof from whatever cause or any Taking of the Leased Property or any portion
thereof, (b) the lawful or unlawful prohibition of, or restriction upon,
Lessees use of the Leased Property, or any portion thereof, or the
interference with such use by any Person other than Lessor, (c) any claim which
Lessee has or might have against Lessor by reason of any default or breach of
any warranty by Lessor under this Lease or any other agreement between Lessor
and Lessee, or to which Lessor and Lessee are parties, (d) any bankruptcy,
insolvency, reorganization, composition, readjustment, liquidation,
dissolution, winding up or other proceedings affecting Lessor or any assignee
or transferee of Lessor, or (e) for any other cause whether similar or
dissimilar to any of the foregoing other than a discharge of Lessee from any
such obligations as a matter of law. Lessee hereby specifically waives all
rights, arising from any occurrence whatsoever, which may now or hereafter be
conferred upon it by law to (1) modify, surrender or terminate this Lease or
quit or surrender the Leased Property or any portion thereof, or (2) entitle
Lessee to any abatement, reduction, suspension or deferment of the Rent or
other sums payable by Lessee hereunder, except as otherwise specifically
provided in this Lease. The obligations of Lessee hereunder shall be separate
and independent covenants and agreements and the Rent and all other sums
payable by Lessee hereunder shall continue to be payable in all events unless
the obligations to pay the same shall be terminated pursuant to the express
provisions of this Lease or by termination of this Lease other than by reason
of an Event of Default.

3.5.
Material Changes in Economic Climate.

22

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(a)
In the event of the occurrence of a Force Majeure or a Hotel Market Decline,
Lessor and Lessee shall, in good faith, negotiate possible modifications to the
Base Rent and Percentage Rent to reduce such Base Rent and Percentage Rent to
recent market rates for hotel REIT leases for similar hotel properties in the
Hotels Competitive Set, retroactively effective as of the first calendar month
of the Term following the last day of the six-month period during which such
Hotel Market Decline has occurred with the excess of Base Rent and Percentage
Rent actually paid for such period over the reduced Base Rent and Percentage
Rent, plus interest thereon at the Base Rate, to be credited to the next
payments of Rent due and owing hereunder. If Lessor and Lessee are unable to
agree that a Force Majeure or a Hotel Market Decline has occurred, within
thirty (30) days after the date of written certification from Lessee to Lessor
that a Force Majeure and Hotel Market Decline has occurred (accompanied by
reasonably detailed computations and documentation to support such assertion),
the matter may be submitted by either party to arbitration under Section 25.2
hereof for resolution (during which period Lessee shall continue to pay Base
Rent and Percentage Rent as required under Section 3.1 of this Lease). If,
within ninety (90) days (during which period Lessee shall continue to pay Base
Rent and Percentage Rent as required under Section 3.1 of this Lease) following
the date of such written certification from Lessee (or the date of a decision
of an arbitrator if required hereunder to determine that a Force Majeure and
Hotel Market Decline has occurred), Lessor and Lessee are unable to agree upon
the amount of reduction in Base Rent and Percentage Rent contemplated hereby,
Lessee shall have the option to terminate this Lease upon not less than thirty
(30) days prior written notice to Lessor.

(b)
In the event of the occurrence of a National Economic Decline or a Regional
Market Decline, Lessor and Lessee shall, in good faith, negotiate (i) possible
modifications to the Base Rent and Percentage Rent to reduce such Base Rent and
Percentage Rent to recent market rates for hotel REIT leases for similar hotel
properties in the Hotels Competitive Set, and (ii) possible modifications to
the Base and Percentage Rent payable under each of the Other Leases for Other
Hotels in the same Region (as defined in the STR Reports) as the Hotel to
reduce such Base Rent and Percentage Rent to recent market rates for hotel REIT
leases for similar hotel properties in the Hotels Competitive Set, in each
case retroactively effective as of the first calendar month of the Term
following the last day of the six month period during which such Regional
Market Decline has occurred with the excess of Base Rent and Percentage Rent
actually paid for such period over the reduced Base Rent and Percentage Rent,
plus interest thereon at the Base Rent, to be credited to the next payments of
Rent due and owing hereunder. If, within thirty (30) days after the date of
written certification from Lessee to Lessor that a National Economic Decline
and Regional Market Decline has occurred (accompanied by reasonably detailed
computations and documentation to support such assertion), Lessor and Lessee
are unable to agree that a National Economic Decline or Regional Market Decline
has occurred, the matter may be submitted by either party to arbitration under
Section 25.2 hereof for resolution (during which period Lessee shall continue
to pay Base Rent and Percentage Rent as required under Section 3.1 of this
Lease). If, within ninety (90) days (during which period Lessee shall continue
to pay Base Rent and Percentage Rent as required under Section 3.1 of this
Lease) following the date of such initial written certification from Lessee (or
the date of a decision of an arbitrator if required hereunder to determine that
a National Economic Decline and Regional Market Decline has occurred), Lessor
and Lessee are unable to agree upon the amount of reduction in Base Rent and
Percentage Rent contemplated hereby, Lessee shall have the option, upon not
less than sixty (60) days prior written notice to Lessor, to terminate all (but
not less than all) of the Existing Leases of hotels in the same

23

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Region as the
Hotel, including this Lease. Any downward adjustment in Base Rent or Percentage
Rent that results in total monthly rent that is less than the total monthly
loan payment (including reserves) payable by Lessor to Lessors primary lender
(i.e., the lender having a first lien position on the Hotel) shall be subject
to the prior written approval of Lessors primary lender or its designee.

3.6.
Rent Adjustment: Basic Assumptions Incorrect. Except to the extent that
doing so would cause Lessor to recognize income other than rents from real
property as defined in Section 856(d) of the Code, notwithstanding anything
herein (other than Article 19) to the contrary, if (i) the facts and
circumstances underlying the documented, basic assumptions upon which both
Lessor and Lessee have relied in determining the Base Rent, the Suite Revenue
Breakpoint, and the Percentage Rent payable hereunder become materially
incorrect solely as a result of (A) a decision to re-brand the Hotel that is
made after the Commencement Date, (B) the scope or cost of substantial
renovations or other capital improvements to the Hotel, or (C) the implementation
of any other hotel repositioning strategies (that were not planned as of the
Commencement Date) resulting in significant disruption of the operations of the
Hotel (collectively, a Repositioning), and (ii) Lessor and Lessee so agree in
writing, then Lessor and Lessee shall, in good faith, negotiate modifications
to the Base Rent, Suite Revenue Breakpoint and Percentage Rent to adjust (i.e.,
increase, decrease or reallocate among revenue categories) such Base Rent,
Suite Revenue Breakpoint and Percentage Rent to reflect such change in basic
assumptions for the affected periods, using the same methodology and other
basic assumptions as were initially utilized in determining the Base Rent,
Suite Revenue Breakpoint and Percentage Rent hereunder. If Lessor and Lessee
are unable to agree, within thirty (30) days after the date of written
certification from either Lessee or Lessor to the other party that a good faith
dispute exists, as to the existence of the occurrence of a Repositioning or the
adjustments to be made to the amounts or percentages for the Base Rent, Suite
Revenue Breakpoint and Percentage Rent hereunder as a result of any
repositioning, the dispute may be submitted by either party to arbitration
under Section 25.2 hereof for resolution (during which period Lessee shall
continue to pay Base Rent and Percentage Rent as required under Section 3.1 of
this Lease); provided, however, that for purposes of applying the procedures in
Section 25.3 to such arbitration, the target deadline therein for concluding
the arbitration shall be shortened from ninety (90) days to thirty (30) days.

24

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ARTICLE 4
ANNUAL BUDGETS; BOOKS AND RECORDS

4.1.
Annual Budget. Not later than thirty (30) days prior to the commencement
of each Fiscal Year, Lessee shall submit the Annual Budget to Lessor. The
Annual Budget shall contain the following, to the extent included in the
operating budgets and capital budgets provided to Lessee by Manager under the
management agreement for the Hotel:

(a)
Lessees reasonable estimate of Gross Revenues (including room rates and Suite
Revenues), Gross Operating Expenses, and Gross Operating Profits for the
forthcoming Fiscal Year itemized on schedules on a quarterly basis as approved
by Lessor and Lessee, as same may be revised or replaced from time to time by
Lessee and approved by Lessor, together with the assumptions, in narrative
form, forming the basis of such schedules.

(b)
An estimate of the amounts to be dedicated to the repair, replacement, or
refurbishment of Furniture and Equipment.

(c)
An estimate of any amounts Lessor will be required to provide for required or
desirable capital improvements to the Hotel or any of its components.

(d)
A cash flow projection.

(e)
A business plan, which shall describe business objectives and strategies for
the forthcoming Fiscal Year, and shall include without limitation an analysis
of the market area in which the Hotel competes, a comparison of the Hotel and
its business with competitive hotels, an analysis of categories of potential
guests, and a description of sales and marketing activities designed to achieve
and implement identified objectives and strategies.

4.2.
Books and Records. Lessee shall keep full and adequate books of account
and other records reflecting the results of operation of the Hotel on an
accrual basis, all in accordance with generally accepted accounting principles
and the obligations of Lessee under this Lease. The books of account and all
other records relating to or reflecting the operation of the Hotel shall be
kept either at the Hotel or at Lessees offices in Richmond, Virginia or at
Managers central offices, and shall be available to Lessor and its representatives
and its auditors or accountants, at all reasonable times, upon prior written
notice to Lessee and Manager, for examination, audit, inspection, and
transcription; provided, however that Lessor may only inspect or audit records
in Managers possession subject to the terms of Lessees access thereto under
the Management Agreement. All of such books and records pertaining to the Hotel
including, without limitation, books of account, guest records and front office
records, at all times shall be the property of Lessor and shall not be removed
from the Hotel or Lessees offices or Managers central offices (but may be
moved among any of the foregoing) by Lessee without Lessor approval.

25

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ARTICLE 5
IMPOSITIONS; HOTEL COSTS

5.1.
Payment of Impositions. Subject to Section 12.2 (relating to permitted
contests), Lessee will pay, or cause to be paid, all Impositions (other than
Real Estate Taxes and Personal Property Taxes, which shall be paid by Lessor)
before any fine, penalty, interest or cost may be added for non-payment, such
payments to be made directly to the taxing or other authorities where feasible,
and will promptly furnish to Lessor copies of official receipts or other
satisfactory proof evidencing such payments. Lessees obligation to pay such
Impositions shall be deemed absolutely fixed upon the date such Impositions
become a lien upon the Leased Property or any part thereof. If any such
Imposition may, at the option of the taxpayer, lawfully be paid in installments
(whether or not interest shall accrue on the unpaid balance of such
Imposition), Lessee may exercise the option to pay the same (and any accrued
interest on the unpaid balance of such Imposition) in installments and in such
event, shall pay such installments during the Term hereof (subject to Lessees
right of contest pursuant to the provisions of Section 12.2) as the same
respectively become due and before any fine, penalty, premium, further interest
or cost may be added thereto. Lessor, at its expense, shall, to the extent required
or permitted by applicable law, prepare and file all tax returns in respect of
Lessors net income, gross receipts, sales and use, single business,
transaction privilege, rent, ad valorem, franchise taxes, Real Estate Taxes,
Personal Property Taxes and taxes on its capital stock, and Lessee, at its
expense, shall, to the extent required or permitted by applicable laws and
regulations, prepare and file all other tax returns and reports in respect of
any Imposition as may be required by governmental authorities. If any refund
shall be due from any taxing authority in respect of any Imposition paid by
Lessee, the same shall be paid over to or retained by Lessee if no Event of
Default shall have occurred hereunder and be continuing. If an Event of Default
shall have occurred and be continuing, any such refund shall be paid over to or
retained by Lessor. Any such funds retained by Lessor due to an Event of
Default shall be applied as provided in Article 16. Lessor and Lessee shall,
upon request of the other, provide such data as is maintained by the party to
whom the request is made with respect to the Leased Property as may be
necessary to prepare any required returns and reports. Lessee shall file all
Personal Property Tax returns in such jurisdictions where it is legally
required so to file. Lessor, to the extent it possesses the same, and Lessee,
to the extent it possesses the same, will provide the other party, upon
request, with cost and depreciation records necessary for filing returns for
any property classified as personal property. Where Lessor is legally required
to file Personal Property Tax returns, Lessee shall provide Lessor with copies
of assessment notices in sufficient time for Lessor to file a protest. Lessor
may, upon Notice to Lessee, at Lessors option and at Lessors sole expense,
protest, appeal, or institute such other proceedings (in its or Lessees name)
as Lessor may deem appropriate to effect a reduction of real estate or personal
property assessments for those Impositions to be paid by Lessor, and Lessee, at
Lessors expense as aforesaid, shall fully cooperate with Lessor in such
protest, appeal, or other action. Lessor hereby agrees to indemnify, defend,
and hold harmless Lessee from and against any claims, obligations, liabilities
and loss against or incurred by Lessee in connection with such cooperation.
Billings for reimbursement of Personal Property Taxes by Lessee to Lessor shall
be accompanied by copies of a bill therefor and payments thereof which identify
the personal property with respect to which such payments are made. Lessor,
however, reserves the right to effect any such protest, appeal or other action
and, upon

26

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Notice to
Lessee, shall control any such activity, which shall then go forward at
Lessors sole expense. Upon such Notice, Lessee, at Lessors expense, shall
cooperate fully with such activities.

5.2.
Notice of Impositions. Lessor shall give prompt Notice to Lessee of all
Impositions payable by Lessee hereunder of which Lessor at any time has
knowledge, provided that Lessors failure to give any such Notice shall in no
way diminish Lessees obligations hereunder to pay such Impositions, but such
failure shall obviate any default hereunder for a reasonable time after Lessee
receives Notice of any Imposition which it is obligated to pay during the first
taxing period applicable thereto.

5.3.
Adjustment of Impositions. Impositions imposed in respect of the
tax-fiscal period during which the Term terminates shall be adjusted and
prorated between Lessor and Lessee, whether or not such Imposition is imposed
before or after such termination, and Lessees obligation to pay its prorated
share thereof after termination shall survive such termination.

5.4.
Utility Charges. Lessee will be solely responsible for obtaining and
maintaining utility services to the Leased Property and will pay or cause to be
paid all charges for electricity, gas, oil, water, sewer and other utilities
used in the Leased Property during the Term.

5.5.
Insurance Premiums. Lessee will pay or cause to be paid all premiums for
the insurance coverages required to be maintained by it under Article 13.

5.6.
Franchise Fees. Lessee will maintain in full force and effect, and pay
or cause to be paid all fees and other charges payable pursuant to, any
Franchise Agreement with respect to the Hotel.

5.7.
Ground Rent. In the event that Lessors interest in the Land is pursuant
to a Ground Lease or sublease, Lessor shall be solely responsible for the
payment of any ground rent, building rent or subrent, as the case may be, due
with respect to the Leased Property.

ARTICLE 6
LEASED PROPERTY; LESSEES PERSONAL PROPERTY

6.1.
Ownership of the Leased Property. Lessee acknowledges that the Leased
Property is the property of Lessor and that Lessee has only the right to the
possession and use of the Leased Property upon the terms and conditions of this
Lease.

6.2.
Lessees Personal Property. Lessee will acquire and maintain throughout
the Term such Inventory as is required to operate the Leased Property in the
manner contemplated by this Lease. Lessee may (and shall as provided
hereinbelow), at its expense, install, affix or assemble or place on any
parcels of the Land or in any of the Leased Improvements, any items of personal
property (including Inventory) owned by Lessee. Lessee, at the commencement of
the Term, and from time to time thereafter, shall provide Lessor with an
accurate list of all such items of Lessees personal property (collectively,
the Lessees Personal Property). Lessee may, subject to the first sentence of
this Section 6.2 and the conditions set forth below, remove any of Lessees
Personal

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Property set
forth on such list at any time during the Term or upon the expiration or any
prior termination of the Term. All of Lessees Personal Property, other than
Inventory, not removed by Lessee within ten (10) days following the expiration
or earlier termination of the Term shall be considered abandoned by Lessee and
may be appropriated, sold, destroyed or otherwise disposed of by Lessor without
first giving Notice thereof to Lessee, without any payment to Lessee and
without any obligation to account therefor. Lessee will, at its expense,
restore the Leased Property to the condition required by Subsection 2.3(g),
including repair of all damage to the Leased Property caused by the removal of
Lessees Personal Property, whether effected by Lessee or Lessor. Upon the
expiration or earlier termination of the Term, Lessor or its designee shall
have the option to purchase all Inventory on hand at the Leased Property at the
time of such expiration or termination for a sale price equal to the fair
market value of such Inventory. Lessee may make such financing arrangements,
title retention agreements, leases or other agreements with respect to Lessees
Personal Property as it sees fit provided that Lessee first advises Lessor of
any such arrangement and such arrangement expressly provides that in the event
of Lessees default thereunder, Lessor (or its designee) may assume Lessees
obligations and rights under such arrangement.

6.3.
Lessors Lien. To the fullest extent permitted by applicable law, Lessor
is granted a lien and security interest on all Lessees personal property now
or hereinafter placed in or upon the Leased Property, and such lien and
security interest shall remain attached to such Lessees personal property
until payment in full of all Rent and satisfaction of all of Lessees
obligations hereunder; provided, however, Lessor shall subordinate its lien and
security interest to that of any non-Affiliate of Lessee which finances such
Lessees personal property or any non-Affiliate conditional seller of such
Lessees personal property, the terms and conditions of such subordination to
be satisfactory to Lessor in the exercise of reasonable discretion. Lessee
shall, upon the request of Lessor, execute such financing statements or other
documents or instruments reasonably requested by Lessor to perfect the lien and
security interests herein granted. Lessee hereby authorizes Lessor to execute
and file financing statements signed only be a representative of Lessor
covering the security interest of Lessor in Lessees personal property.

6.4.
Lessors Option to Purchase Assets of Lessee. Effective on not less than
ninety (90) days prior Notice given at any time within one hundred eighty
(180) days before the expiration of the Term, but not later than ninety (90)
days prior to such expiration, or upon such shorter Notice period as shall be
appropriate if this Lease is terminated prior to its expiration date, Lessor
shall have the option to purchase all (but not less than all) of the assets of
Lessee, tangible and intangible, relating to the Leased Property (other than
this Lease), at the expiration or termination of this Lease for an amount
(payable in cash on the expiration date of this Lease) equal to the fair market
value thereof as appraised in conformity with Article 24, except that the
appraisers need not be members of the American Institute of Real Estate
Appraisers, but rather shall be appraisers having at least ten (10) years
experience in valuing similar assets. Notwithstanding any such purchase, Lessor
shall obtain no rights to any trade name or logo used in connection with the
Franchise Agreement unless separate agreement as to such use is reached with
the applicable franchisor.

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ARTICLE 7
CONDITION AND USE OF LEASED PROPERTY

7.1.
Condition of the Leased Property. Lessee acknowledges receipt and delivery
of possession of the Leased Property. Lessee has examined and otherwise has
knowledge of the condition of the Leased Property and has found the same to be
satisfactory for its purposes hereunder. Lessee is leasing the Leased Property
as is in its present condition. Lessee waives any claim or action against
Lessor in respect of the condition of the Leased Property. LESSOR MAKES NO
WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, IN RESPECT OF THE LEASED
PROPERTY, OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN OR
CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, AS TO THE QUALITY OF
THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT, IT BEING AGREED THAT ALL
SUCH RISKS ARE TO BE BORNE BY LESSEE. LESSEE ACKNOWLEDGES THAT THE LEASED
PROPERTY HAS BEEN INSPECTED BY LESSEE AND IS SATISFACTORY TO IT. Provided,
however, to the extent permitted by law, Lessor hereby assigns to Lessee all of
Lessors rights to proceed against any predecessor in title (other than any
Affiliate of Lessee, which conveyed the Property to Lessor) for breaches of
warranties or representations or for latent defects in the Leased Property.
Lessor shall fully cooperate with Lessee in the prosecution of any such claim,
in Lessors or Lessees name, all at Lessees sole cost and expense. Lessee
hereby agrees to indemnify, defend and hold harmless Lessor from and against
any claims, obligations and liabilities against or incurred by Lessor in
connection with such cooperation.

7.2.
Use of the Leased Property.

(a)
Lessee covenants that it will proceed with all due diligence and will exercise
reasonable efforts to obtain and to maintain all Licenses and other approvals
needed to use and operate the Leased Property and the Hotel under applicable local,
state and federal law.

(b)
Lessee shall use or cause to be used the Leased Property only as a Hilton
Garden Inn hotel facility, and for such other uses as may be necessary or
incidental to such use or such other use as otherwise approved by Lessor (the
Primary Intended Use). Lessee shall not use the Leased Property or any
portion thereof for any other use without the prior written consent of Lessor,
which consent may be granted, denied or conditioned in Lessors sole discretion.
No use shall be made or permitted to be made of the Leased Property, and no
acts shall be done, which will cause the cancellation or increase the premium
of any insurance policy covering the Leased Property or any part thereof
(unless another adequate policy satisfactory to Lessor is available and Lessee
pays any premium increase), nor shall Lessee sell or permit to be kept, used or
sold in or about the Leased Property any article which may be prohibited by law
or fire underwriters regulations. Lessee shall, at its sole cost, comply with
all of the requirements pertaining to the Leased Property of any insurance
board, association, organization or company necessary for the maintenance of
insurance, as herein provided, covering the Leased Property and Lessees
Personal Property.

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(c)
Subject to the provisions of Articles 14, 15, 18 and 21, Lessee covenants and
agrees that during the Term it will (1) operate continuously the Leased
Property as a hotel facility, (2) keep in full force and effect and comply with
all the provisions of the Franchise Agreement and the Management Agreement, (3)
not terminate or amend the Franchise Agreement or the Management Agreement
without the consent of Lessor (which shall not be unreasonably withheld or delayed),
(4) maintain appropriate certifications and Licenses for such use and (5) seek
to maximize the Gross Revenues generated therefrom consistent with sound
business practices.

(d)
Lessee shall not commit or suffer to be committed any waste on the Leased
Property, or in the Hotel, nor shall Lessee cause or permit any nuisance
thereon.

(e)
Lessee shall neither suffer nor permit the Leased Property or any portion
thereof, or Lessees Personal Property, to be used in such a manner as (1)
might reasonably tend to impair Lessors (or Lessees, as the case may be)
title thereto or to any portion thereof, or (2) may reasonably make possible a
claim or claims of adverse usage or adverse possession by the public, as such,
or of implied dedication of the Leased Property or any portion thereof, except
as necessary in the ordinary and prudent operation of the Hotel on the Leased
Property.

7.3.
Lessor to Grant Easements, Etc. Lessor will, from time to time, so long
as no Event of Default has occurred and is continuing, at the request of Lessee
and at Lessees cost and expense (but subject to the approval of Lessor, which
approval shall not be unreasonably withheld or delayed), (a) grant easements
and other rights in the nature of easements with respect to the Leased Property
to third parties, (b) release existing easements or other rights in the nature
of easements which are for the benefit of the Leased Property, (c) dedicate or
transfer unimproved portions of the Leased Property for road, highway or other
public purposes, (d) execute petitions to have the Leased Property annexed to
any municipal corporation or utility district, (e) execute amendments to any
covenants and restrictions affecting the Leased Property and (f) execute and
deliver to any Person any instrument appropriate to confirm or effect such
grants, releases, dedications, transfers, petitions and amendments (to the
extent of its interests in the Leased Property), but only upon delivery to
Lessor of an Officers Certificate stating that such grant, release,
dedication, transfer, petition or amendment does not interfere with the proper
conduct of the business of Lessee on the Leased Property and does not
materially reduce the value of the Leased Property.

ARTICLE 8
LESSEES COMPLIANCE WITH LAW; ENVIRONMENTAL COVENANTS

8.1.
Compliance with Legal and Insurance Requirements, Etc. Subject to
Subsection 8.3(b) below and Section 12.2 (relating to permitted contests),
Lessee, at its expense, will promptly (a) comply with all applicable Legal
Requirements and Insurance Requirements in respect of the use, operation,
maintenance, repair and restoration of the Leased Property (excluding any
repair or restoration of any portion of the Leased Property required to be made
by Lessor pursuant to Subsection 9.1(b) below, which repair shall be made by
Lessor), and (b) procure, maintain and comply with all appropriate Licenses and
other authorizations required for any use of the Leased Property and Lessees
Personal Property then being made, and for the proper erection, installation,
operation and maintenance of the Leased Property or any part thereof.

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8.2.
Legal Requirement Covenants.

(a)
Subject to Subsection 8.3(b) and Subsection 9.1(b) below, Lessee covenants and
agrees that the Leased Property and Lessees Personal Property shall not be
used for any unlawful purpose, and that Lessee shall not permit or suffer to
exist any unlawful use of the Leased Property by others. Lessee shall acquire
and maintain all appropriate licenses, certifications, permits and other
authorizations and approvals needed to operate the Leased Property in its
customary manner for the Primary Intended Use, and any other lawful use
conducted on the Leased Property as may be permitted from time to time
hereunder. Lessee further covenants and agrees that Lessees use of the Leased
Property and maintenance, alteration, and operation of the same, and all parts
thereof, shall at all times conform to all Legal Requirements, unless the same
are finally determined by a court of competent jurisdiction to be unlawful (and
Lessee shall cause all sub-tenants, invitees or others within its control so to
comply with all Legal Requirements). Lessee may, however, upon prior Notice to
Lessor, contest the legality or applicability of any such Legal Requirement or
any licensure or certification decision if Lessee maintains such action in good
faith, with due diligence, without prejudice to Lessors rights hereunder, and
at Lessees sole expense. If by the terms of any such Legal Requirement
compliance therewith pending the prosecution of any such proceeding may legally
be delayed without the occurrence of any charge or liability of any kind, or
the filing of any lien, against the Hotel or Lessees leasehold interest
therein and without subjecting Lessee or Lessor to any liability, civil or
criminal, for failure so to comply therewith, Lessee may delay compliance
therewith until the final determination of such proceeding. If any lien, charge
or civil or criminal liability would be incurred by reason of any such delay,
Lessee, on the prior written consent of Lessor, which consent shall not be
unreasonably withheld or delayed, may nonetheless contest as aforesaid and
delay as aforesaid provided that such delay would not subject Lessor to
criminal liability and Lessee both (a) furnishes to Lessor security reasonably
satisfactory to Lessor against any loss or injury by reason of such contest or
delay and (b) prosecutes the contest with due diligence and in good faith.

(b)
As between Lessor and Lessee, Lessee is solely responsible for all liabilities
or obligations of any kind with respect to employees at the Leased Property
during the Term. Without limiting the generality of the foregoing sentence,
Lessee is solely responsible for any required compliance with the Worker
Adjustment, Retraining and Notification Act of 1988 (the WARN Act) or any
similar state law applicable to the Leased Property; any required compliance
with the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(COBRA); and all alleged and actual obligations and claims arising from or
relating to any employment agreement, collective bargaining agreement or
employee benefit plans, any grievances, arbitrations, or unfair labor practice
charges, and relating to compliance with any applicable state or federal labor
employment law, including but not limited to all laws pertaining to
discrimination, workers compensation, unemployment compensation, occupational
safety and health, unfair labor practices, family and medical leave, and wages,
hours or employee benefits. Lessee agrees to indemnify and defend and hold
harmless Lessor from and against any claims relating to any of the foregoing
matters. Lessee further agrees to reimburse Lessor for any and all losses,
damages, costs, expenses, liabilities and obligations of any kind, including
without limitation reasonable attorneys fees and other legal costs and
expenses, incurred by Lessor in connection with any of the foregoing matters.

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(c)
Notwithstanding the Lessees obligations under Section 8.1 to obtain and
maintain all permits and licenses required for the use of the Leased Property,
and without limiting any obligations of Lessee hereunder, if (i) applicable law
requires that the owner (rather than a lessee) of a hotel be the licensee under
the required liquor license for the Hotel or (ii) the former owner of the Hotel
is holding the liquor license and continuing to exercise management and
supervision of the liquor services at the Hotel pending transfer of the license
to Lessor or Lessee, the Lessee shall indemnify and hold Lessor harmless from
any liability, damages or claims (a) arising in connection with liquor operations
at the Hotel during such period of time following the Commencement Date, except
to the extent caused by Lessors gross negligence or willful misconduct or (b)
made by or through the former owner with respect to liquor operations at the
Hotel following the Commencement Date.

8.3.
Environmental Covenants. Lessor and Lessee (in addition to, and not in
diminution of, Lessees covenants and undertakings in Sections 8.1 and 8.2
hereof) covenant and agree as follows:

(a)
At all times hereafter until the later of (i) such time as all liabilities,
duties or obligations of Lessee to Lessor under the Lease have been satisfied
in full and (ii) such time as Lessee completely vacates the Leased Property and
surrenders possession of the same to Lessor, Lessee shall fully comply with all
Environmental Laws applicable to the Leased Property and the operations
thereon. Lessee agrees to give Lessor prompt Notice of (1) all Environmental
Liabilities; (2) all pending, threatened or anticipated Proceedings, and all
notices, demands, requests or investigations, relating to any Environmental
Liability or relating to the issuance, revocation or change in any
Environmental Authorization required for operation of the Leased Property; (3)
all Releases at, on, in, under or in any way affecting the Leased Property, or
any Release known by Lessee at, on, in or under any property adjacent to the
Leased Property; and (4) all facts, events or conditions that could reasonably
lead to the occurrence of any of the above-referenced matters.

(b)
Lessor hereby agrees to defend, indemnify and save harmless any and all Lessee
Indemnified Parties from and against any and all Environmental Liabilities
other than (i) Environmental Liabilities resulting from conditions disclosed in
any environmental audit obtained by Lessor and provided to Lessee prior to the
execution of this Lease (the Environmental Audit), and (ii) Environmental
Liabilities which were caused by the acts or negligent failures to act of
Lessee.

(c)
Lessee hereby agrees to defend, indemnify and save harmless any and all Lessor
Indemnified Parties from and against any and all Environmental Liabilities
which were (i) resulting from conditions disclosed in the Environmental Audit,
and (ii) caused by the acts or negligent failures to act of Lessee.

(d)
If any Proceeding is brought against any Indemnified Party in respect of an
Environmental Liability with respect to which such Indemnified Party may claim
indemnification under either Subsection 8.3(b) or (c), the Indemnifying Party,
upon request, shall at its sole expense resist and defend such Proceeding, or
cause the same to be resisted and defended by counsel designated by the
Indemnified Party and approved by the Indemnifying Party, which approval shall

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not be
unreasonably withheld or delayed; provided, however, that such approval shall
not be required in the case of defense by counsel designated by any insurance
company undertaking such defense pursuant to any applicable policy of
insurance. Each Indemnified Party shall have the right to employ separate
counsel in any such Proceeding and to participate in the defense thereof, but
the fees and expenses of such counsel will be at the sole expense of such
Indemnified Party unless such counsel has been approved by the Indemnifying
Party, which approval shall not be unreasonably withheld or delayed. The
Indemnifying Party shall not be liable for any settlement of any such
Proceeding made without its consent, which shall not be unreasonably withheld
or delayed, but if settled with the consent of the Indemnifying Party, or if
settled without its consent (if its consent shall be unreasonably withheld or
delayed), or if there be a final, nonappealable judgment for an adversary party
in any such Proceeding, the Indemnifying Party shall indemnify and hold
harmless the Indemnified Parties from and against any liabilities and loss
incurred by such Indemnified Parties by reason of such settlement or judgment.

(e)
At any time any Indemnified Party has reason to believe circumstances exist
which could reasonably result in an Environmental Liability, upon reasonable prior
Notice to Lessee and Manager stating such Indemnified Partys basis for such belief,
an Indemnified Party shall be given immediate access to the Leased Property
(including, but not limited to, the right to enter upon, investigate, drill
wells, take soil borings, excavate, monitor, test, cap and use available land
for the testing of remedial technologies), Lessees employees, and to all
relevant documents and records regarding the matter as to which a
responsibility, liability or obligation is asserted or which is the subject of
any Proceeding; provided that such access may he conditioned or restricted as
may be reasonably necessary to ensure compliance with law and the safety of
personnel and facilities or to protect confidential or privileged information.
All Indemnified Parties requesting such immediate access and cooperation shall
endeavor to coordinate such efforts to result in as minimal interruption of the
operation of the Leased Property as practicable.

(f)
The indemnification rights and obligations provided for in this Article 8 shall
be in addition to any indemnification rights and obligations provided for
elsewhere in this Lease.

(g)
The indemnification rights and obligations provided for in this Article 8 shall
survive the termination of this Lease.

For
purposes of this Section 8.3, all amounts for which any Indemnified Party seeks
indemnification shall be computed net of (a) any actual income tax benefit
resulting therefrom to such Indemnified Party, (b) any insurance proceeds
received (net of tax effects) with respect thereto, and (c) any amounts
recovered (net of tax effects) from any third parties based on claims the
Indemnified Party has against such third parties which reduce the damages that
would otherwise be sustained; provided that in all cases, the timing of the receipt
or realization of insurance proceeds or income tax benefits or recoveries from
third parties shall be taken into account in determining the amount of
reduction of damages. Each Indemnified Party agrees to use its reasonable
efforts to pursue, or assign to Lessee or Lessor, as the case may be, any
claims or rights it may have against any third party that would materially
reduce the amount of damages otherwise incurred by such Indemnified Party.

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Notwithstanding
anything to the contrary contained in this Lease, if Lessor shall become
entitled to the possession of the Leased Property by virtue of the termination
of the Lease or repossession of the Leased Property, then Lessor may assign its
indemnification rights under this Section 8.3 (but not any other rights under
this Section 8.3) to any Person to whom Lessor subsequently transfers the
Leased Property, subject to the following conditions and limitations, each of
which shall be deemed to be incorporated into the terms of such assignment, whether
or not specifically referred to therein:

| |                                                                                                                                                                                                                                                                     
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)
 The indemnification rights referred to in this section may be assigned only
 if a known Environmental Liability then exists or if a Proceeding is then
 pending or, to the knowledge of Lessee or Lessor, then threatened with
 respect to the Leased Property;
| |                                                                                                                                                                                                                                                                     
| | (ii)
 Such indemnification rights shall be limited to Environmental Liabilities
 relating to or specifically affecting the Leased Property; and                                                                                                                     
| |                                                                                                                                                                                                                                                                     
| | (iii)
 Any assignment of such indemnification rights shall be limited to the
 immediate transferee of Lessor, and shall not extend to any such transferees
 successors or assigns.                                                                                 

ARTICLE 9
MAINTENANCE AND REPAIRS; ENCROACHMENTS AND RESTRICTIONS

9.1.
Maintenance and Repairs.

(a)
Lessee, at its sole expense, will keep the Leased Property, and all private
roadways, sidewalks and curbs appurtenant thereto that are under Lessees
control, including windows and plate glass, mechanical, electrical and plumbing
systems and equipment (including conduit and ductware), and non-load bearing
interior walls, and parking lot surfaces, in good order and repair, except (i)
for ordinary wear and tear (whether or not the need for such repairs occurred
as a result of Lessees use, any prior use, the elements or the age of the
Leased Property, or any portion thereof) and (ii) to the extent of damage
caused by Lessors gross negligence or willful misconduct or that of its
employees or agents, and, except as otherwise provided in Subsection 9.1(b),
Article 14 or Article 15, with reasonable promptness, make all necessary and
appropriate repairs replacements, and improvements thereto of every kind and
nature, whether interior or exterior ordinary or extraordinary, foreseen or unforeseen
or arising by reason of a condition existing prior to the commencement of the
Term of this Lease (concealed or otherwise), or required by any governmental
agency having jurisdiction over the Leased Property, except as to the
structural elements of the Leased Improvements. Lessee, however, shall be
permitted to prosecute claims against Lessors predecessors in title for breach
of any representation or warranty or for any latent defects in the Leased
Property to be maintained by Lessee unless Lessor is already diligently
pursuing such a claim. All repairs shall, to the extent reasonably achievable,
be at least equivalent in quality to the original work. Lessee will not take or
omit to take any action, the taking or omission of which might materially impair
the value or the usefulness of the Leased Property or any part thereof for its
Primary Intended Use.

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(b)
Notwithstanding Lessees obligations under Subsection 9.1(a) above, except to
the extent of damage caused by Lessees negligence or willful misconduct or
that of its employees or agents, Lessor shall be required to bear the cost of
maintaining any underground utilities and the structural elements of the Leased
Improvements, including exterior walls and the roof of the Hotel (but excluding
windows and plate glass, mechanical, electrical and plumbing systems and
equipment, including conduit and ductware, and non-load bearing walls, and
parking lot surfaces). Except as set forth in the preceding sentence and in
Section 10.5, Lessor shall not under any circumstances be required to build or
rebuild any improvement on the Leased Property, or to make any repairs,
replacements, alterations, restorations or renewals of any nature or
description to the Leased Property, whether ordinary or extraordinary, foreseen
or unforeseen, or to make any expenditure whatsoever with respect thereto, in
connection with this Lease, or to maintain the Leased Property in any way.
Lessee hereby waives, to the extent permitted by law, the right to make repairs
at the expense of Lessor, pursuant to any law in effect at the time of the
execution of this Lease or hereafter enacted, except following default by
Lessor under this Lease, to the extent of repairs (for which Lessor is
obligated hereunder) required to be made in order for the Hotel, and Lessees
use thereof, to comply with Lessees obligations under the Franchise Agreement
and the Management Agreement. Lessor shall have the right to give, record and
post, as appropriate, notices of nonresponsibility under any mechanics lien
laws now or hereafter existing.

(c)
Nothing contained in this Lease and no action or inaction by Lessor shall be
construed as (1) constituting the request of Lessor, expressed or implied, to
any contractor, subcontractor, laborer, materialman or vendor to or for the
performance of any labor or services or the furnishing of any materials or
other property for the construction, alteration, addition, repair or demolition
of or to the Leased Property or any part thereof, or (2) giving Lessee any
right, power or permission to contract for or permit the performance of any
labor or services or the furnishing of any materials or other property in such
fashion as would permit the making of any claim against Lessor in respect
thereof or to make any agreement that may create, or in any way be the basis
for any right, title, interest, lien, claim or other encumbrance upon the
estate of Lessor in the Leased Property, or any portion thereof.

9.2.
Encroachments, Restrictions, Etc. Lessor represents and warrants that
the Leased Improvements do not materially encroach upon any property, street or
right-of-way adjacent to the Leased Property, or violate the agreements or
conditions contained in any lawful restrictive covenant or other agreement
affecting the Leased Property, or any part thereof, or impair the rights of
others under any easement or right-of-way to which the Leased Property is
subject. Except to the extent that such representation and warranty is breached
by Lessor, if any of the Leased Improvements, at any time hereafter, materially
encroach upon any property, street or right-of-way adjacent to the Leased
Property, or violate the agreements or conditions contained in any lawful
restrictive covenant or other agreement affecting the Leased Property, or any
part thereof, or impair the rights of others under any easement or right-of-way
to which the Leased Property is subject, then promptly upon the request of
Lessor or at the behest of any Person affected by any such encroachment,
violation or impairment, Lessee shall, at its expense, subject to its right to
contest the existence of any encroachment, violation or impairment and in such
case, in the event of an adverse final determination, either (a) obtain valid and
effective waivers or settlements of all claims, liabilities and damages
resulting from each such encroachment, violation or impairment,

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whether the
same shall affect Lessor or Lessee or (b) make such changes in the Leased
Improvements, and take such other actions, as Lessee in the good faith exercise
of its judgment deems reasonably practicable to remove such encroachment, and
to end such violation or impairment, including, if necessary, the alteration of
any of the Leased Improvements, and in any event take all such actions as may
be necessary in order to be able to continue the operation of the Leased
Improvements for the Primary Intended Use substantially in the manner and to
the extent the Leased Improvements were operated prior to the assertion of such
violation, impairment or encroachment. Any such alteration shall be made in
conformity with the applicable requirements of Article 10. Lessees obligations
under this Section 9.2 shall be in addition to and shall in no way discharge or
diminish any obligation of any insurer under any policy of title or other
insurance held by Lessor.

ARTICLE 10
ALTERATIONS AND IMPROVEMENTS; FF&E RESERVE

10.1.
Alterations. After receiving approval of Lessor, which approval shall
not be unreasonably withheld or delayed, Lessee shall have the right to make
such additions, modifications or improvements to the Leased Property from time
to time as Lessee deems desirable for its permitted uses and purposes, provided
that such action will not significantly alter the character or purposes or
significantly detract from the value or operating efficiency thereof and will
not significantly impair the revenue-producing capability of the Leased
Property or adversely affect the ability of Lessee to comply with the provisions
of this Lease. The cost of such additions, modifications or improvements to the
Leased Property shall be paid by Lessee, and all such additions, modifications
and improvements shall, without payment by Lessor at any time, be included
under the terms of this Lease and upon expiration or earlier termination of
this Lease shall pass to and become the property of Lessor.

10.2.
Salvage. All materials which are scrapped or removed in connection with
the making of repairs required by Articles 9 or 10 shall be or become the
property of Lessor or Lessee depending on which party is paying for or
providing the financing for such work.

10.3.
Joint Use Agreements. If Lessee constructs additional improvements that
are connected to the Leased Property or share maintenance facilities, HVAC,
electrical, plumbing or other systems, utilities, parking or other amenities,
the parties shall enter into a mutually agreeable cross-easement or joint use
agreement, the form of which has been approved in advance by Lessor, to make
available necessary services and facilities in connection with such additional
improvements, to protect each of their respective interests in the properties
affected, and to provide for separate ownership, use, and/or financing of such
improvements.

10.4.
[Reserved].

10.5.
Furniture, Fixture and Equipment Allowance. Lessor shall be obligated to
pay Lessee, when and as required to meet the requirements of the Franchise
Agreement and the Management Agreement for a reserve for periodic repair,
replacement or refurbishing of furniture, fixtures and equipment that
constitute Leased Property, an amount equal up to five percent (5%) of Suite
Revenues monthly. Upon written request by Lessee to Lessor stating the specific
use to be

36

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made and the
reasonable approval thereof by Lessor (or as otherwise required by the
franchisor under the Franchise Agreement or Manager under the Management
Agreement), such reserve funds (and additional funds of Lessor, if necessary)
shall be made available by Lessor for use by Lessee for replacement or
refurbishing of furniture, fixtures and equipment that constitute Leased
Property in connection with the Primary Intended Use; provided, however, that
no amounts made available under this Article shall be used to purchase property
(other than real property within the meaning of Treasury Regulations Section
1.856-3(d)), to the extent that doing so would cause Lessor to recognize income
other than rents from real property as defined in Section 856(d) of the Code.
Lessors obligation shall be cumulative, but not compounded, and any amounts
that have accrued hereunder shall be payable in future periods for such uses
and in accordance with the procedure set forth herein. Lessee shall have no
interest in any accrued obligation of Lessor hereunder after the termination of
this Lease.

ARTICLE 11
COMPLIANCE WITH FRANCHISE

11.1.
Compliance with Franchise Agreement and Management Agreement. To the
extent any of the provisions of the Franchise Agreement or Management Agreement
impose a greater obligation on Lessee than the corresponding provisions of the
Lease, then Lessee shall be obligated to comply with, and to take all
reasonable actions necessary to prevent breaches or defaults under, the provisions
of the Franchise Agreement and the Management Agreement. It is the intent of
the parties hereto that Lessee shall comply in every respect with the
provisions of the Franchise Agreement and the Management Agreement so as to
avoid any material default thereunder during the term of this Lease. Lessee
shall not terminate, extend or enter into any material modification of the
Franchise Agreement or the Management Agreement without in each instance first
obtaining Lessors prior written consent, which shall not be unreasonably
withheld. Lessor and Lessee agree to cooperate with each other in the event it
becomes necessary to obtain a franchise extension or modification (or, at
Lessors option, a new franchise) for the Leased Property, and in any transfer
of the Franchise Agreement or Management Agreement to Lessor or any designee of
Lessor or any successor to Lessee upon the termination of this Lease. In the
event of expiration or termination of a Franchise Agreement or Management
Agreement, for whatever reason, Lessor will have the right, in the exercise of
its sole discretion, to approve any new Franchise Agreement or Management
Agreement for the Hotel.

ARTICLE 12
PERMITTED LIENS AND CONTESTS

12.1.
Liens. Subject to the provisions of Section 12.2 relating to permitted
contests, Lessee will not directly or indirectly create or allow to remain and
will promptly discharge at its expense any lien, encumbrance, attachment, title
retention agreement or claim upon the Leased Property or any attachment, levy,
claim or encumbrance in respect of the Rent, not including, however, (a) this
Lease, (b) the matters included as exceptions in the title policy insuring
Lessors interest in the Leased Property, (c) restrictions, liens and other
encumbrances which are consented to in writing by Lessor or any easements
granted pursuant to the provisions of Section 7.3 of this Lease, (d) liens for
those taxes upon Lessor or the Leased Property which Lessee is not required to
pay hereunder, (e) subleases permitted by Article 20 hereof, (f) liens for
Impositions or for sums

37

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resulting from
noncompliance with Legal Requirements so long as (1) the same are not yet
payable or are payable without the addition of any fine or penalty or (2) such
liens are in the process of being contested as permitted by Section 12.2, (g)
liens of mechanics, laborers, materialmen, suppliers or vendors for sums either
disputed or not yet due provided that (1) the payment of such sums shall not be
postponed under any related contract for more than sixty (60) days after the
completion of the action giving rise to such lien and such reserve or other
appropriate provisions as shall be required by law or generally accepted
accounting principles shall have been made therefor or (2) any such liens are in
the process of being contested as permitted by Section 12.2 hereof, and (h) any
liens which are the responsibility of Lessor pursuant to the provisions of
Article 22 of this Lease.

12.2.
Permitted Contests. Lessee shall have the right to contest the amount or
validity of any Imposition to be paid by Lessee or any Legal Requirement or
Insurance Requirement or any lien, attachment, levy, encumbrance, charge or
claim (Claims) not otherwise permitted by Section 12.1, by appropriate legal
proceedings in good faith and with due diligence (but this shall not be deemed
or construed in any way to relieve, modify or extend Lessees covenants to pay
or its covenants to cause to be paid any such charges at the time and in the
manner as in this Section provided), on condition, however, that such legal
proceedings shall not operate to relieve Lessee from its obligations hereunder
and shall not cause the sale or risk the loss of any portion of the Leased
Property, or any part thereof, or cause Lessor or Lessee to be in default under
any mortgage, deed of trust, security deed or other agreement encumbering the
Leased Property or any interest therein. Upon the request of Lessor, Lessee
shall either (a) provide a bond or other assurance reasonably satisfactory to Lessor
that all Claims which may be assessed against the Leased Property together with
interest and penalties, if any, thereon will be paid, or (b) deposit within the
time otherwise required for payment with a bank or trust company as trustee
upon terms reasonably satisfactory to Lessor, as security for the payment of
such Claims, money in an amount sufficient to pay the same, together with
interest and penalties in connection therewith, as to all Claims which may be
assessed against or become a Claim on the Leased Property, or any part thereof,
in said legal proceedings. Lessee shall furnish Lessor and any lender of Lessor
with reasonable evidence of such deposit within five (5) days of the same.
Lessor agrees to join in any such proceedings if the same be required legally
to prosecute such contest of the validity of such Claims; provided, however,
that Lessor shall not thereby be subjected to any liability or loss for the
payment of any costs or expenses in connection with any proceedings brought by
Lessee; and Lessee covenants to indemnify and save harmless Lessor from any
such liabilities, losses, costs or expenses. Lessee shall be entitled to any
refund of any Claims and such charges and penalties or interest thereon which
have been paid by Lessee or paid by Lessor and for which Lessor has been fully
reimbursed. In the event that Lessee fails to pay any Claims when due or to
provide the security therefor as provided in this Section and diligently to
prosecute any contest of the same, Lessor may, upon ten (10) days advance
Notice to Lessee, and Lessees failure to correct the same within such ten (10)
day period, pay such charges together with any interest and penalties and the
same shall be repayable by Lessee to Lessor as Additional Charges at the next Payment
Date provided for in this Lease; provided, however, that should Lessor
reasonably determine that the giving of such Notice would risk loss to the
Leased Property or cause damage to Lessor, then Lessor shall give such Notice
as is practical under the circumstances. Lessor reserves the right to contest
any of the Claims at its expense not pursued by Lessee. Lessor and Lessee agree
to cooperate in coordinating the contest of any Claims.

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ARTICLE 13
INSURANCE REQUIREMENTS

13.1.
General Insurance Requirements. During the Term of this Lease, Lessor
and Lessee shall at all times keep the Leased Property insured with the kinds
and amounts of insurance described below, or such other insurance coverage(s)
as may be required by the Franchise Agreement. This insurance shall be written
by companies authorized to issue insurance in the State. The policies must name
Lessor and/or Lessee, as applicable, as the insured or as an additional named
insured, as the case may be. Losses shall be payable to Lessor or Lessee as
provided in this Lease. Any loss adjustment shall require the written consent
of Lessor and Lessee, each acting reasonably and in good faith. Evidence of
insurance shall be deposited with Lessor. The policies on the Leased Property,
including the Leased Improvements, Fixtures and Lessees Personal Property,
shall include the following:

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (a) Lessor
 shall obtain and maintain, at its own expense:                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (i)
 Building insurance on the Special Form (formerly All Risk form)
 (including earthquake and flood in reasonable amounts as determined by
 Lessor) in an amount not less than 100% of the then full replacement cost
 thereof (as defined in Section 13.2) or such other amount which is acceptable
 to Lessor and Lessee, and personal property insurance (on other than Lessees
 Personal Property) on the Special Form in the full amount of the
 replacement cost thereof;             
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (ii)
 Insurance for loss or damage (direct and indirect) from steam boilers,
 pressure vessels or similar apparatus, now or hereafter installed in the
 Hotel, in the minimum amount of $5,000,000 or in such greater amounts as are
 then customary; and                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (iii)
 Loss of income insurance on the Special Form, in the amount of one year of
 Base Rent and Additional Charges (to the extent quantifiable) for the benefit
 of Lessor.                                                                                                                                                                                                                                                                                                                       
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (b) Lessee
 shall obtain and maintain, at its own expense:                                                                                                                                                                                                                                                                                                                                                                                                                                           
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (i)
 Personal property insurance on Lessees Personal Property on the Special
 Form in the full amount of the replacement cost thereof;                                                                                                                                                                                                                                                                                                                                                            
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | (ii)
 Comprehensive general liability insurance, with amounts not less than
 $10,000,000 covering each of the following: bodily injury, death, or property
 damage liability per occurrence, personal and advertising injury, general
 aggregate, products and completed operations, with respect to Lessor, and
 all risk legal liability (including liquor law or dram shop liability, if
 liquor or alcoholic beverages are served on the Leased Property) with respect
 to Lessor and Lessee;

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| |                                                                                                                                                                                                                                                                                                                                                                                                                
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (iii)
 Insurance covering such other hazards and in such amounts as may be customary
 for comparable properties in the area of the Leased Property and is available
 from insurance companies, insurance pools or other appropriate companies
 authorized to do business in the State at rates which are economically
 practicable in relation to the risks covered, as may be reasonably requested
 by Lessor;
| |                                                                                                                                                                                                                                                                                                                                                                                                                
| | (iv)
 Fidelity bonds with limits and deductibles as may be reasonably requested by
 Lessor, covering Lessees employees in job classifications normally bonded
 under prudent hotel management practices in the United States or otherwise
 required by law;                                                                                                                                                   
| |                                                                                                                                                                                                                                                                                                                                                                                                                
| | (v)
 Workers compensation insurance coverage for all persons, if any, employed by
 Lessee on the Leased Premises, to the extent necessary to protect Lessor and
 the Leased Property against Lessees workers compensation claims, such
 workers compensation insurance to be in accordance with the requirements of
 applicable local, state and federal law;                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                
| | (vi)
 Vehicle liability insurance for owned, non-owned, and hired vehicles, in the
 amount of $5,000,000; and                                                                                                                                                                                                                                                                                                  
| |                                                                                                                                                                                                                                                                                                                                                                                                                
| | (vii)
 Such other insurance as Lessor may reasonably request for facilities such as
 the Leased Property and the operation thereof.                                                                                                                                                                                                                                                                            

13.2.
Replacement Cost. The term full replacement cost as used herein shall
mean the actual replacement cost of the Leased Property requiring replacement
from time to time including an increased cost of construction endorsement, if
available, and the cost of debris removal. In the event either party believes
that full replacement cost (the then-replacement cost less such exclusions) has
increased or decreased at any time during the Lease Term, it shall have the right
to have such full replacement cost re-determined.

13.3.
Waiver of Subrogation. All insurance policies carried by Lessor or
Lessee covering the Leased Property, the Fixtures, the Hotel or Lessees
Personal Property, including, without limitation, contents, fire and casualty
insurance, shall expressly waive any right of subrogation on the part of the
insurer against the other party. The parties hereto agree that their policies
will include such waiver clause or endorsement so long as the same are
obtainable without extra cost, and in the event of such an extra charge the
other party, at its election, may pay the same, but shall not be obligated to
do so.

13.4.
Form Satisfactory, Etc.

(a)
All of the policies of insurance referred to in this Article 13 to be
maintained by Lessee shall be written in a form, with deductibles and by
insurance companies satisfactory to Lessor. Lessee shall pay all of the
premiums therefor, and deliver such policies or certificates thereof to Lessor
prior to their effective date (and, with respect to any renewal policy, thirty
(30) days prior to the expiration of the existing policy), and in the event of
the failure of Lessee either to effect such insurance as herein called for or
to pay the premiums therefor, or to deliver such

40

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policies or
certificates thereof to Lessor at the times required, Lessor shall be entitled,
but shall have no obligation, to effect such insurance and pay the premiums
therefor, and Lessee shall reimburse Lessor for any premium or premiums paid by
Lessor for the coverages required of Lessee under this Article 13 upon written
demand therefor, and Lessees failure to repay the same within thirty (30) days
after Notice of such failure from Lessor shall constitute an Event of Default
within the meaning of Section 16.1. Each insurer mentioned in this Article 13
shall agree, by endorsement to the policy or policies issued by it, or by
independent instrument furnished to Lessor, that it will give to Lessor thirty
(30) days written notice before the policy or policies in question shall be
materially altered, allowed to expire or canceled.

(b)
All of the policies of insurance referred to in this Article 13 to be
maintained by Lessor shall be written in a form, with deductibles and by
insurance companies satisfactory to Lessee. Lessor shall pay all of the
premiums therefor, and deliver such policies or certificates thereof to Lessee
prior to their effective date (and, with respect to any renewal policy, thirty
(30) days prior to the expiration of the existing policy), and in the event of
the failure of Lessor either to effect such insurance as herein called for or
to pay the premiums therefor, or to deliver such policies or certificates
thereof to Lessee at the times required, Lessee shall be entitled, but shall
have no obligation, to effect such insurance and pay the premiums therefor, and
Lessor shall reimburse Lessee for any premium or premiums paid by Lessee for
the coverages required under this Section upon written demand therefor. Each
insurer mentioned in this Article 13 shall agree, by endorsement to the policy
or policies issued by it, or by independent instrument furnished to Lessee,
that it will give to Lessee thirty (30) days written notice before the policy
or policies in question shall be materially altered, allowed to expire or
canceled.

13.5.
Increase in Limits. If either Lessor or Lessee at any time deems the
limits of the personal injury or property damage under the comprehensive public
liability insurance then carried to be either excessive or insufficient, Lessor
and Lessee shall endeavor in good faith to agree on the proper and reasonable
limits for such insurance to be carried and such insurance shall thereafter be
carried with the limits thus agreed on until further change pursuant to the
provisions of this Article 13.

13.6.
Blanket Policy. Notwithstanding anything to the contrary contained in
this Article 13. Lessee or Lessor may bring the insurance provided for herein
within the coverage of a so-called blanket policy or policies of insurance
carried and maintained by Lessee (or Manager) or Lessor; provided, however,
that the coverage afforded to Lessor and Lessee will not be reduced or
diminished or otherwise be different from that which would exist under a
separate policy meeting all other requirements of this Lease by reason of the
use of such blanket policy of insurance, and provided further that the
requirements of this Article 13 are otherwise satisfied.

13.7.
No Separate Insurance. Lessee shall not, on Lessees own initiative or
pursuant to the request or requirement of any third party, take out separate
insurance concurrent in form or contributing in the event of loss with that
required in this Article to be furnished, or increase the amount of any then
existing insurance by securing an additional policy or additional policies,
unless all parties having an insurable interest in the subject matter of the
insurance, including in all cases Lessor, are included therein as additional
insured, and the loss is payable under such additional separate insurance in
the same manner as losses are payable under this Lease. Lessee

41

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shall
immediately notify Lessor of any such separate insurance that Lessee has obtained
or of the increase of any of the amounts of the then existing insurance.

13.8.
Reports On Insurance Claims. Lessee shall promptly investigate and make
a complete and timely written report to the appropriate insurance company as to
all accidents, claims for damage relating to the ownership, operation, and
maintenance of the Hotel, any damage or destruction to the Hotel and the
estimated cost of repair thereof and shall prepare any and all reports required
by any insurance company in connection therewith. All such reports shall be
timely filed with the insurance company as required under the terms of the
insurance policy involved, and a final copy of such report shall be furnished
to Lessor. Lessee shall be authorized to adjust, settle, or compromise any
insurance loss, or to execute proofs of such loss, in the aggregate amount of
$25,000 or less, with respect to any single casualty or other event.

ARTICLE 14
CASUALTY INSURANCE PROCEEDS; RECONSTRUCTION

14.1.
Insurance Proceeds. Subject to the provisions of Section 14.4, all
proceeds payable by reason of any loss or damage to the Leased Property, or any
portion thereof, insured under any policy of insurance required by Article 13
of this Lease, shall be paid to Lessor and held in trust by Lessor in an
interest-bearing account, shall be made available, if applicable, for
reconstruction or repair, as the case may be, of any damage to or destruction
of the Leased Property, or any portion thereof, and, if applicable, shall be
paid out by Lessor from time to time for the reasonable costs of such
reconstruction or repair upon satisfaction of reasonable terms and conditions
specified by Lessor. Any excess proceeds of insurance (and accrued interest)
remaining after the completion of the restoration or reconstruction of the
Leased Property, as hereinafter set forth, shall be paid to Lessee. If neither
Lessor nor Lessee is required or elects to repair and restore, and the Lease is
terminated without purchase by Lessee as described in Section 14.2, all such
insurance proceeds shall be retained by Lessor. All salvage resulting from any
risk covered by insurance shall belong to Lessor.

14.2.
Reconstruction in the Event of Damage or Destruction Covered by Insurance.

(a)
Except as provided in Section 14.6, if during the Term the Leased Property is
totally or partially destroyed by a risk covered by the insurance described in
Article 13 and the Hotel thereby is rendered Unsuitable for its Primary
Intended Use, Lessee shall, at Lessees option, either (1) restore the Hotel to
substantially the same condition as existed immediately before the damage or
destruction and otherwise in accordance with the terms of the Lease, or (2)
offer to acquire the Leased Property from Lessor for a purchase price equal to
the Rejectable Offer Price of the Leased Property. If Lessee restores the
Hotel, the insurance proceeds shall be paid out by Lessor from time to time for
the reasonable costs of such restoration upon satisfaction of reasonable terms
and conditions, and any excess proceeds remaining after such restoration shall
be paid to Lessee. If Lessee acquires the Leased Property, Lessee shall receive
the insurance proceeds. If Lessor does not accept Lessees offer so to purchase
the Leased Property within ninety (90) days, Lessee may withdraw its offer to
purchase the Leased Property and, if so withdrawn, Lessee may terminate the
Lease with respect to the Leased Property without further liability hereunder
and Lessor shall be entitled to retain all insurance proceeds.

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(b)
Except as provided in Section 14.6, if during the Term the Leased Property is
partially destroyed by a risk covered by the insurance described in Article 13,
but the Hotel is not thereby rendered Unsuitable for its Primary Intended Use,
Lessee shall restore the Hotel to substantially the same condition as existed
immediately before the damage or destruction and otherwise in accordance with
the terms of the Lease. Such damage or destruction shall not terminate this
Lease; provided, however, that if Lessee cannot within a reasonable time obtain
all necessary government approvals, including building permits, licenses and
conditional use permits, after diligent efforts to do so, to perform all
required repair and restoration work and to operate the Hotel for its Primary
Intended Use in substantially the same manner as that existing immediately
prior to such damage or destruction and otherwise in accordance with the terms
of the Lease, Lessee may offer to purchase the Leased Property for a purchase
price equal to the Rejectable Offer Price of the Leased Property, determined
without regard to such damage or destruction if insurance proceeds are
available to restore the Hotel. If Lessee makes such offer and Lessor does not
accept the same, Lessee shall withdraw such offer, in which event this Lease
shall remain in full force and effect and Lessee shall immediately proceed to
restore the Hotel to substantially the same condition as existed immediately
before such damage or destruction and otherwise in accordance with the terms of
the Lease. If Lessee restores the Hotel, the insurance proceeds shall be paid
out by Lessor from time to time for the reasonable costs of such restoration
upon satisfaction of reasonable terms and conditions specified by Lessor, and
any excess proceeds remaining after such restoration shall be paid to Lessee.

(c)
If the cost of the repair or restoration exceeds the amount of proceeds
received by Lessor from the insurance it maintains as required under Article
13, Lessee shall be obligated to contribute any excess amounts needed to
restore the Hotel. Such difference shall be paid by Lessee to Lessor promptly
after Lessee receives Lessors written invoice therefor, to be held in trust in
an interest-bearing account, together with any other insurance proceeds, for
application to the cost of repair and restoration.

(d)
If Lessor accepts Lessees offer to purchase the Leased Property under this
Article, this Lease shall terminate as to the Leased Property upon payment of
the purchase price, and Lessor shall remit to Lessee all insurance proceeds
pertaining to the Leased Property being held in trust by Lessor.

14.3.
Reconstruction in the Event of Damage or Destruction Not Covered by
Insurance. Except as provided in Section 14.6, if during the Term the Hotel
is totally or materially destroyed by a risk not covered by the insurance
described in Article 13, whether or not such damage or destruction renders the
Hotel Unsuitable for its Primary Intended Use, Lessee at its option shall
either, (a) at Lessees sole cost and expense, restore the Hotel to
substantially the same condition it was in immediately before such damage or
destruction and such damage or destruction shall not terminate this Lease, or
(b) offer to purchase the Leased Property for a purchase price equal to the
Rejectable Offer Price of the Leased Property without regard to such damage or
destruction. If such damage or destruction is not material, Lessee shall
restore the Hotel to substantially the same condition as existed immediately
before the damage or destruction and otherwise in accordance with the terms of
the Lease. If Lessor does not accept Lessees offer so to purchase the Leased
Property within ninety (90) days, Lessee may withdraw its offer to purchase the
Leased Property

43

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and, if so
withdrawn, Lessee may terminate the Lease with respect to the Leased Property
without further liability hereunder.

14.4.
Lessees Property. All insurance proceeds payable by reason of any loss
of or damage to any of Lessees Personal Property shall be paid to Lessee;
provided, however, no such payments shall diminish or reduce the insurance
payments otherwise payable to or for the benefit of Lessor hereunder.

14.5.
Abatement of Rent. Any damage or destruction due to casualty
notwithstanding, this Lease shall remain in full force and effect and Lessees
obligation to make rental payments and to pay all other charges required by
this Lease shall remain unabated during the first three (3) months of any
period required for the applicable repair and restoration. Thereafter, Base
Rent shall be equitably abated.

14.6.
Damage Near End of Term. Notwithstanding any provisions of Section 14.2
or 14.3 appearing to the contrary, if damage to or destruction of the Hotel
rendering it unsuitable for its Primary Intended Use occurs during the last
twenty-four (24) months of the Term, then Lessor or Lessee shall have the right
to terminate this Lease by giving Notice, respectively, to Lessee or Lessor
within thirty (30) days after the date of damage or destruction, whereupon all
accrued Rent shall be paid immediately, and this Lease shall automatically
terminate five (5) days after the date of such Notice.

14.7.
Waiver. Lessee hereby waives any statutory rights of termination that
may arise by reason of any damage or destruction of the Hotel that Lessor is
obligated to restore or may restore under any of the provisions of this Lease.

ARTICLE 15
CONDEMNATION; AWARD ALLOCATION

15.1.
Definitions.

(a)
Award means all compensation,
sums or anything of value awarded, paid or received on a total or partial
Condemnation.

(b)
Condemnation means a Taking
resulting from (1) the exercise of any governmental power, whether by legal
proceedings or otherwise, by a Condemnor, and (2) a voluntary sale or transfer
by Lessor to any Condemnor, either under threat of condemnation or while legal
proceedings for condemnation are pending.

(c)
Condemnor means any public or
quasi-public authority, or private corporation or individual, having the power
of Condemnation.

(d)
Date of Taking means the date
the Condemnor has the right to possession of the property being condemned.

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15.2.
Parties Rights and Obligations. If during the Term there is any
Condemnation of all or any part of the Leased Property or any interest in this
Lease, the rights and obligations of Lessor and Lessee shall be determined by
this Article 15.

15.3.
Total Taking. If title to the fee of the whole of the Leased Property is
condemned by any Condemnor, this Lease shall cease and terminate as of the Date
of Taking by the Condemnor. If title to the fee of less than the whole of the
Leased Property is so taken or condemned, which nevertheless renders the Leased
Property Unsuitable or Uneconomic for its Primary Intended Use, Lessee and
Lessor shall each have the option, by Notice to the other, at any time prior to
the Date of Taking, to terminate this Lease as of the Date of Taking. Upon such
date, if such Notice has been given, this Lease shall thereupon cease and
terminate. All Base Rent, Percentage Rent and Additional Charges paid or
payable by Lessee hereunder shall be apportioned as of the Date of Taking, and
Lessee shall promptly pay Lessor such amounts.

15.4.
Allocation of Award. The total Award made with respect to the Leased
Property or for loss of rent, or for Lessors loss of business beyond the Term,
shall be solely the property of and payable to Lessor. Any Award made for loss
of Lessees business during the remaining Term, if any, for the taking of
Lessees Personal Property, or for removal and relocation expenses of Lessee in
any such proceedings shall be the sole property of and payable to Lessee. In
any Condemnation proceedings Lessor and Lessee shall each seek its Award in
conformity herewith, at its respective expense; provided, however, Lessee shall
not initiate, prosecute or acquiesce in any proceedings that may result in a
diminution of any Award payable to Lessor.

15.5.
Partial Taking. If title to less than the whole of the Leased Property
is condemned, and the Leased Property is not Unsuitable for its Primary
Intended Use, and not Uneconomic for its Primary Intended Use, or if Lessee or
Lessor is entitled but neither elects to terminate this Lease as provided in
Section 15.3, Lessee at its cost shall with all reasonable dispatch restore the
untaken portion of any Leased Improvements so that such Leased Improvements
constitute a complete architectural unit of the same general character and
condition (as nearly as may be possible under the circumstances) as the Leased
Improvements existing immediately prior to the Condemnation. Lessor shall
contribute to the cost of restoration that part of its Award specifically
allocated to such restoration, if any, together with severance and other
damages awarded for the taken Leased Improvements; provided, however, that the
amount of such contribution shall not exceed such cost. In the event of such a
partial Taking, this Lease shall not terminate, but the Base Rent shall be
abated in the manner and to the extent that is fair, just and equitable to both
Lessee and Lessor, taking into consideration, among other relevant factors, the
number of usable rooms, the amount of square footage, or the revenues affected
by such partial Taking. If Lessor and Lessee are unable to agree upon the
amount of such abatement within thirty (30) days after such partial Taking, the
matter may be submitted by either party to a court of competent jurisdiction
for resolution.

15.6.
Temporary Taking. If the whole or any part of the Leased Property (other
than the fee) or of Lessees interest under this Lease is condemned by any
Condemnor for its temporary use or occupancy (which shall mean a period not to
exceed two years), this Lease shall not terminate by reason thereof, and Lessee
shall continue to pay, in the manner and at the terms herein specified, the
full amounts of Base Rent and Additional Charges. In addition, Lessee shall pay
Percentage Rent at a rate equal to the average Percentage Rent during the last
three (3) preceding Fiscal Years

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(or if three
(3) Fiscal Years shall not have elapsed, the average during the preceding
Fiscal Years). Except only to the extent that Lessee may be prevented from so
doing pursuant to the terms of the order of the Condemnor, Lessee shall
continue to perform and observe all of the other terms, covenants, conditions
and obligations hereof on the part of Lessee to be performed and observed, as
though such Condemnation had not occurred. In the event of any Condemnation as
in this Section 15.6 described, the entire amount of any Award made for such
Condemnation allocable to the Term of this Lease, whether paid by way of
damages, rent or otherwise, shall be paid to Lessee. Lessee covenants that upon
the termination of any such period of temporary use or occupancy it will, at
its sole cost and expense (subject to Lessors contribution as set forth
below), restore the Leased Property as nearly as may be reasonably possible to
the condition in which the same was immediately prior to such Condemnation,
unless such period of temporary use or occupancy extends beyond the expiration
of the Term, in which case Lessee shall not be required to make such
restoration. If restoration is required hereunder, Lessor shall contribute to
the cost of such restoration that portion of its entire Award that is specifically
allocated to such restoration in the judgment or order of the court, if any,
and Lessee shall fund the balance of such costs in a manner reasonably
satisfactory to Lessor.

ARTICLE 16
DEFAULT BY LESSEE; LESSORS REMEDIES

16.1.
Events of Default. If any one or more of the following events
(individually, an Event of Default) occurs:

(a)
if an Event of Default occurs under any other lease between Lessor or any
Affiliate of Lessor and Lessee or any Affiliate of Lessee; or

(b)
if Lessee fails to make payment of the Base Rent within five (5) days after the
same becomes due and payable; or

(c)
if Lessee fails to make payment of Percentage Rent when the same becomes due
and payable and such condition continues for a period of thirty (30) days after
the end of the applicable quarter; or

(d)
if Lessee fails to observe or perform any other term, covenant or condition of
this Lease and such failure is not cured by Lessee within a period of thirty
(30) days after receipt by Lessee of Notice thereof from Lessor, unless such
failure cannot with due diligence be cured within a period of thirty (30) days,
in which case it shall not be deemed an Event of Default if Lessee proceeds promptly
and with due diligence to cure the failure and diligently completes the curing
thereof provided, however, in no event shall such cure period extend beyond
ninety (90) days after such Notice; or

(e)
if Lessee shall file a petition in bankruptcy or reorganization for an
arrangement pursuant to any federal or state bankruptcy law or any similar
federal or state law, or shall be adjudicated a bankrupt or shall make an
assignment for the benefit of creditors or shall admit in writing its inability
to pay its debts generally as they become due, or if a petition or answer
proposing the adjudication of Lessee as a bankrupt or its reorganization
pursuant to any federal or

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state
bankruptcy law or any similar federal or state law shall be filed in any court
and Lessee shall be adjudicated a bankrupt and such adjudication shall not be
vacated or set aside or stayed within sixty (60) days after the entry of an
order in respect thereof, or if a receiver of Lessee or of the whole or substantially
all of the assets of Lessee shall be appointed in any proceeding brought by
Lessee or if any such receiver, trustee or liquidator shall be appointed in any
proceeding brought against Lessee and shall not be vacated or set aside or
stayed within sixty (60) days after such appointment; or

(f)
if Lessee is liquidated or dissolved, or begins proceedings toward such
liquidation or dissolution, or, in any manner, permits the sale or divestiture
of substantially all of its assets; or

(g)
if, except as expressly permitted herein, the estate or interest of Lessee in
the Leased Property or any part thereof is voluntarily or involuntarily
transferred, assigned, conveyed, levied upon or attached in any proceeding
(unless Lessee is contesting such lien or attachment in good faith in
accordance with Section 12.2 hereof) or there is a Change of Control of Lessee;
or

(h)
if, except as a result of damage, destruction or a partial or complete
Condemnation as contemplated by this Lease, Lessee voluntarily ceases
operations on the Leased Property for a period in excess of thirty (30) days;
or

(i)
if an event of default has been declared by the franchisor under the Franchise
Agreement with respect to the Hotel as a result of any action or failure to act
by Lessee or any Person with whom Lessee contracts for management services at
the Hotel, and such default is not cured by the earlier of (A) ten (10) days
following notice from Lessor or (B) such earlier date as is required for Lessee
to avoid termination of the Franchise Agreement by the franchisor;

then, and in
any such event, Lessor may exercise one or more remedies available to it herein
or at law or in equity, including but not limited to its right to terminate
this Lease by giving Lessee not less than ten (10) days Notice of such
termination.

If
litigation is commenced with respect to any alleged default under this Lease,
the prevailing party in such litigation shall receive, in addition to its
damages incurred, such sum as the court shall determine as its reasonable
attorneys fees, and all costs and expenses incurred in connection therewith.

No
Event of Default (other than a failure to make a payment of money) shall be
deemed to exist under clause (d) during any time the curing thereof is
prevented by an Unavoidable Delay, provided that upon the cessation of such
Unavoidable Delay, Lessee remedies such default or Event of Default without
further delay.

16.2.
Surrender. If an Event of Default occurs (and the event giving rise to
such Event of Default has not been cured within the curative period relating
thereto as set forth in Section 16.1) and is continuing, whether or not this
Lease has been terminated pursuant to Section 16.1, Lessee shall, if requested
by Lessor so to do, immediately surrender to Lessor the Leased Property
including, without limitation, any and all books, records, files, licenses,
permits and keys relating

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thereto, and
quit the same and Lessor may enter upon and repossess the Leased Property by
summary proceedings, ejectment or otherwise, and may remove Lessee and all
other Persons and any and all personal property from the Leased Property,
subject to rights of any hotel guests and to any requirement of law. Lessee
hereby waives any and all requirements of applicable laws for service of notice
to re-enter the Leased Property. Lessor shall be under no obligation to, but
may if it so chooses, relet the Leased Property or otherwise mitigate Lessors
damages.

16.3.
Damages. Neither (a) the termination of this Lease, (b) the repossession
of the Leased Property, (c) the failure of Lessor to relet the Leased Property,
nor (d) the reletting of all or any portion thereof, shall relieve Lessee of
its liability and obligations hereunder, all of which shall survive any such
termination, repossession or reletting. In the event of any such termination,
Lessee shall forthwith pay to Lessor all Rent due and payable with respect to
the Leased Property to and including the date of such termination.

Lessee
shall forthwith pay to Lessor, at Lessors option, as and for liquidated and
agreed current damages for Lessees default, either:

| |                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)
 Without termination of Lessees right to possession of the Leased Property,
 each installment of Rent (including Percentage Rent as determined below) and
 other sums payable by Lessee to Lessor under the Lease as the same becomes
 due and payable, which Rent and other sums shall bear interest at the Overdue
 Rate, and Lessor may enforce, by action or otherwise, any other term or
 covenant of this Lease; or                 
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (ii)
 the sum of:                                                                                                                                                                                                                                                                                                                                                                                                                              
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (A)
 the unpaid Rent which had been earned at the time of termination,
 repossession or reletting, and                                                                                                                                                                                                                                                                                                                                         
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (B)
 the worth at the time of termination, repossession or reletting of the amount
 by which the unpaid Rent for the balance of the Term after the time of
 termination, repossession or reletting, exceeds the amount of such rental
 loss that Lessee proves could be reasonably avoided and as reduced for
 rentals received after the time of termination, repossession or reletting, if
 and to the extent required by applicable law, and
| |                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | (C)
 any other amount necessary to compensate Lessor for all the detriment
 proximately caused by Lessees failure to perform its obligations under this
 Lease or which in the ordinary course of things, would be likely to result
 therefrom.                                                                                                                                                                                               

The
worth at the time of termination, repossession or reletting of the amount
referred to in subparagraph (B) is computed by discounting such amount at the
discount rate of the Federal Reserve Bank of New York at the time of award plus
one percent (1%). Percentage Rent for the purposes of this Section 16.3 shall
be a sum equal to (i) the average of the annual amounts of the Percentage Rent
for the three (3) Fiscal Years immediately preceding the Fiscal Year in

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which the
termination, re-entry or repossession takes place, or (ii) if three (3) Fiscal
Years shall not have elapsed, the average of the Percentage Rent during the
preceding Fiscal Years during which the Lease was in effect, or (iii) if one
Fiscal Year has not elapsed, the amount derived by annualizing the Percentage
Rent from the effective date of this Lease.

16.4.
Waiver. If this Lease is terminated pursuant to Section 16.1, Lessee
waives, to the extent permitted by applicable law, (a) any right to a trial by
jury in the event of summary proceedings to enforce the remedies set forth in
this Article 16, and (b) the benefit of any laws now or hereafter in force
exempting property from liability for rent or for debt and Lessor waives any
right to pierce the corporate veil of Lessee other than to the extent funds
shall have been fraudulently paid by Lessee to any Affiliate of Lessee
following a default resulting in an Event of Default.

16.5.
Application of Funds. Any payments received by Lessor under any of the
provisions of this Lease during the existence or continuance of any Event of
Default shall be applied to Lessees obligations in the order that Lessor may
determine or as may be prescribed by the laws of the State.

16.6.
Lessors Right to Cure Lessees Default. If Lessee fails to make any
payment or to perform any act required to be made or performed under this
Lease, including, without limitation, Lessees failure to comply with the terms
of any Franchise Agreement, and fails to cure the same within the relevant time
periods provided in Section 16.1, Lessor, without waiving or releasing any
obligation of Lessee, and without waiving or releasing any obligation or
default, may (but shall be under no obligation to) at any time thereafter make
such payment or perform such act for the account and at the expense of Lessee,
and may, to the extent permitted by law, enter upon the Leased Property for
such purpose and, subject to Section 16.4, take all such action thereon as, in
Lessors opinion, may be necessary or appropriate therefor. No such entry shall
be deemed an eviction of Lessee. All sums so paid by Lessor and all costs and
expenses (including, without limitation, reasonable attorneys fees and
expenses, in each case to the extent permitted by law) so incurred, together
with a late charge thereon (to the extent permitted by law) at the Overdue Rate
from the date on which such sums or expenses are paid or incurred by Lessors,
shall be paid by Lessee to Lessor on demand. The obligations of Lessee and
rights of Lessor contained in this Article shall survive the expiration or
earlier termination of this Lease.

ARTICLE 17
DEFAULT BY LESSOR; LESSEES REMEDIES

17.1.
Breach by Lessor. It shall be a breach of this Lease if Lessor fails to
observe or perform any term, covenant or condition of this Lease on its part to
be performed and such failure continues for a period of thirty (30) days after
Notice thereof from Lessee, unless such failure cannot with due diligence be
cured within a period of thirty (30) days, in which case such failure shall not
be deemed to continue if Lessor, within such thirty (30) day period, proceeds
promptly and with due diligence to cure the failure and diligently completes
the curing thereof; provided, however, that such default shall be cured by
Lessor in any event prior to the date on which the default becomes an event of
default under the terms of the Franchise Agreement for the Hotel. The time
within which Lessor shall be obligated to cure any such failure also shall be
subject to

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extension of
time due to the occurrence of any Unavoidable Delay. If Lessor fails to cure
any such breach within the grace period described above, Lessee, without
waiving or releasing any obligations hereunder, and in addition to all other
remedies available to Lessee at law or in equity, may purchase the Leased
Property from Lessor for a purchase price equal to the then Fair Market Value.
If Lessee elects to purchase the Leased Property it shall deliver a Notice
thereof to Lessor specifying a settlement date to occur not less than ninety
(90) days subsequent to the date of such Notice on which it shall purchase the
Leased Property, and the same shall be thereupon conveyed in accordance with
the provisions of Section 17.3; provided, however, that Lessor shall pay the
cost of Lessees title insurance and all closing costs associated with such
purchase by Lessee following default by Lessor.

17.2.
Lessees Right to Cure. Subject to the provisions of Section 17.1, if
Lessor breaches any covenant to be performed by it under this Lease, Lessee,
after Notice to and demand upon Lessor, without waiving or releasing any
obligation hereunder, and in addition to all other remedies available to
Lessee, may (but shall be under no obligation at any time thereafter to) make
such payment or perform such act for the account and at the expense of Lessor.
All sums so paid by Lessee and all costs and expenses (including, without
limitation, reasonable attorneys fees) so incurred, together with interest
thereon at the Overdue Rate from the date on which such sums or expenses are
paid or incurred by Lessee, shall be paid by Lessor to Lessee on demand or,
following entry of a final, nonappealable judgment against Lessor for such
sums, may be offset by Lessee against the Base Rent and/or Percentage Rent
payments next accruing or coming due. The rights of Lessee hereunder to cure
and to secure payment from Lessor in accordance with this Section 17.2 shall
survive the termination of this Lease with respect to the Leased Property.

17.3.
Provisions Relating to Purchase of the Leased Property by Lessee. If
Lessee purchases the Leased Property from Lessor pursuant to any of the terms
of this Lease, Lessor shall, upon receipt from Lessee of the applicable
purchase price, together with full payment of any unpaid Rent due and payable
with respect to any period ending on or before the date of the purchase,
deliver to Lessee an appropriate limited or special warranty deed or other
conveyance conveying the entire interest of Lessor in and to the Leased
Property to Lessee free and clear of all encumbrances other than (a) those that
Lessee has agreed hereunder to pay or discharge, (b) those mortgage liens, if
any, that Lessee has agreed in writing to accept and to take title subject to,
(c) those liens and encumbrances subject to which the Leased Property was
conveyed to Lessor, to the extent not released in connection with the
transactions contemplated by this Lease, (d) encumbrances, easements, licenses
or rights of way required to be imposed on the Leased Property under Section
7.3, and (e) any other encumbrances permitted to be imposed on the Leased
Property under the provisions of Article 22 that are assumable at no cost to
Lessee or to which Lessee may take subject without cost to Lessee. The
difference between the applicable purchase price and the total of the
encumbrances assumed or taken subject to shall be paid in cash to Lessor or as
Lessor may direct, in federal or other immediately available funds, except as
otherwise mutually agreed by Lessor and Lessee. All expenses of such
conveyance, including, without limitation, the cost of title examination or
title insurance, if desired by Lessee, Lessees attorneys fees incurred in
connection with such conveyance and release, and one-half of any transfer taxes
and recording fees, shall be paid by Lessee. Lessor shall pay one-half of any
transfer taxes and recording fees and its attorneys fees.

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ARTICLE 18
INDEMNIFICATION

18.1.
Indemnification.

(a)
Notwithstanding the existence of any insurance, and without regard to the
policy limits of any such insurance or self-insurance, but subject to Section
13.3 and Section 8.3, Lessee will protect, indemnify, hold harmless and defend
Lessor from and against all liabilities, losses, obligations, claims, damages,
penalties, causes of action, costs and expenses (including, without limitation,
reasonable attorneys fees and expenses), to the extent permitted by law,
imposed upon or incurred by or asserted against Lessor Indemnified Parties by
reason of: (a) any accident, injury to or death of persons or loss of or damage
to property occurring on or about the Leased Property or adjoining sidewalks,
including without limitation any claims under liquor liability, dram shop or
similar laws, (b) any use, misuse, non-use, condition, management, maintenance
or repair by Lessee or any of its agents, employees or invitees of the Leased
Property or Lessees Personal Property during the Term or any litigation, proceeding
or claim by governmental entities or other third parties to which a Lessor
Indemnified Party is made a party or participant related to such use, misuse,
non-use, condition, management, maintenance, or repair thereof by Lessee or any
of its agents, employees or invitees, including any failure of lessee or any of
its agents, employees or invitees to perform any obligations under this Lease
or imposed by applicable law (other than arising out of Condemnation
proceedings), (c) any Impositions that are the obligations of Lessee pursuant
to the applicable provisions of this Lease, (d) any failure on the part of
Lessee to perform or comply with any of the terms of this Lease, and (e) the
non-performance of any of the terms and provisions of any and all existing and
future subleases of the Leased Property to be performed by the landlord
thereunder.

(b)
Notwithstanding the existence of any insurance, and without regard to the
policy limits of any such insurance or self-insurance, but subject to Section
13.3 and Section 8.3, Lessor shall indemnify, save harmless and defend Lessee
Indemnified Parties from and against all liabilities, obligations, claims,
damages, penalties, causes of action, costs and expenses imposed upon or
incurred by or asserted against Lessee Indemnified Parties as a result of (a)
the gross negligence or willful misconduct of Lessor arising in connection with
this Lease or (b) any failure on the part of Lessor to perform or comply with
any of the terms of this Lease. Any amounts that become payable by an
Indemnifying Party under this Section shall be paid within ten (10) days after
liability therefor on the part of the Indemnifying Party is determined by
litigation or otherwise, and if not timely paid, shall bear a late charge (to
the extent permitted by law) at the Overdue Rate from the date of such
determination to the date of payment. An Indemnifying Party, at its expense,
shall contest, resist and defend any such claim, action or proceeding asserted
or instituted against the Indemnified Party. The Indemnified Party, at its
expense, shall be entitled to participate in any such claim, action, or
proceeding, and the Indemnifying Party may not compromise or otherwise dispose
of the same without the consent of the Indemnified Party, which may not be
unreasonably withheld or delayed. Nothing herein shall be construed as
indemnifying a Lessor Indemnified Party against its own (or Lessors) grossly
negligent acts or omissions or willful misconduct.

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(c)
Lessees or Lessors liability for a breach of the provisions of this Article
shall survive any termination of this Lease.

ARTICLE 19
REIT REQUIREMENTS AND RESTRICTIONS

19.1.
Personal Property Limitation. Anything contained in this Lease to the
contrary notwithstanding, the average of the adjusted tax bases of the items of
personal property that are leased to Lessee under this Lease at the beginning
and at the end of any Fiscal Year shall not exceed fifteen percent (15%) of the
average of the aggregate adjusted tax bases of the Leased Property at the
beginning and at the end of such Fiscal Year. This Section 19.1 is intended to
ensure that the Rent qualifies as rents from real property, within the
meaning of Section 856(d) of the Code, or any similar or successor provisions
thereto, and shall be interpreted in a manner consistent with such intent.

19.2.
Sublease Rent Limitation. Anything contained in this Lease to the
contrary notwithstanding, Lessee shall not sublet the Leased Property on any basis
such that the rental to be paid by the sublessee thereunder would be based, in
whole or in part, on either (a) the income or profits derived by the business
activities of the sublessee, or (b) any other formula such that any portion of
the Rent would fail to qualify as rents from real property within the meaning
of Section 856(d) of the Code, or any similar or successor provision thereto.

19.3.
Sublease Tenant Limitation. Anything contained in this Lease to the
contrary notwithstanding, Lessee shall not sublease the Leased Property to any
Person in which Lessor owns, directly or indirectly, a ten percent (10%) or
more interest, within the meaning of Section 856(d)(2)(B) of the Code, or any
similar or successor provisions thereto.

19.4.
Lessee Ownership Limitations.

(a)
Anything contained in this Lease to the contrary notwithstanding, neither
Lessee nor an Affiliate of Lessee shall acquire, directly or indirectly, a ten
percent (10%) or more interest in Lessor within the meaning of Section
856(d)(2)(B) of the Code, or any similar or successor provision thereto.

(b)
Lessee shall not own, operate, manage or have any interest in any hotel or
motel property in which Lessor or an Affiliate of Lessor does not have an
interest, pursuant to this Lease or another lease, agreement or arrangement
with Lessor or an Affiliate of Lessor. Lessor agrees to notify Lessee promptly
of the location of any hotel or motel property in which Lessor or an Affiliate
of Lessor has an interest.

19.5.
Lessee Officer and Employee Limitation. If a Person serves as both (a) a
director of Lessee (or any Person who furnishes or renders services to the
tenants of the Leased Property, or manages or operates the Leased Property) and
(b) an officer (or employee) of the Lessor that Person shall not receive any
compensation for serving as a director of Lessee (or any Person who furnishes
or renders services to the tenants of the Leased Property, or manages or
operates the

52

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Leased
Property). Furthermore, if a Person serves as both (a) a director of the Lessor
and (b) an officer (or employee) of Lessee (or any Person who furnishes or
renders services to the tenants of the Leased Property, or manages or operates
the Leased Property), that Person shall not receive any compensation for
serving as a director of the Lessor. No Person, other than Justin G. Knight,
shall serve as an officer (or employee) of both Lessor and Lessee.

19.6.
Payments to Affiliates of Lessee. During the Term, Lessee shall not pay,
or become obligated to pay, any fees to any Affiliate of Lessee in connection
with the Hotel, other than fees that are subordinated to the payments that are
required to be made to Lessor pursuant to this Lease.

ARTICLE 20
SUBLETTING AND ASSIGNMENT

20.1.
Subletting and Assignment. Subject to the provisions of Article 19 and
Section 20.2 and any other express conditions or limitations set forth herein,
Lessee may, but only with the consent of Lessor (which shall not be
unreasonably withheld or delayed), (a) assign this Lease or sublet all or any
part of the Leased Property to an Affiliate of Lessee, or (b) sublet any retail
or restaurant portion of the Leased Improvements in the normal course of the
Primary Intended Use; provided that any subletting to any party other than an
Affiliate of Lessee shall not individually as to any one such subletting, or in
the aggregate, materially diminish the actual or potential Percentage Rent
payable under this Lease. In the case of a subletting, the sublessee shall
comply with the provisions of Section 20.2, and in the case of an assignment,
the assignee shall assume in writing and agree to keep and perform all of the
terms of this Lease on the part of Lessee to be kept and performed and shall
be, and become, jointly and severally liable with Lessee for the performance
thereof. Notwithstanding the above, Lessee may assign the Lease to an Affiliate
without the consent of Lessor; provided that any such assignee assumes in
writing and agrees to keep and perform all of the terms of the Lease on the
part of Lessee to be kept and performed and shall be and become jointly and
severally liable with Lessee for the performance thereof. In case of either an
assignment or subletting made during the Term, Lessee shall remain primarily
liable, as principal rather than as surety, for the prompt payment of the Rent
and for the performance and observance of all of the covenants and conditions
to be performed by Lessee hereunder. An original counterpart of each such
sublease and assignment and assumption, duly executed by Lessee and such
sublessee or assignee, as the case may be, in form and substance satisfactory
to Lessor, shall be delivered promptly to Lessor.

20.2.
Attornment. Lessee shall insert in each sublease permitted under Section
20.1 provisions to the effect that (a) such sublease is subject and subordinate
to all of the terms and provisions of this Lease and to the rights of Lessor
hereunder, (b) if this Lease terminates before the expiration of such sublease,
the sublessee thereunder will, at Lessors option, attorn to Lessor and waive
any right the sublessee may have to terminate the sublease or to surrender
possession thereunder as a result of the termination of this Lease, and (c) if
the sublessee receives a Notice from Lessor or Lessors assignees, if any,
stating that an uncured Event of Default exists under this Lease, the sublessee
shall thereafter be obligated to pay all rentals accruing under said sublease
directly to the party giving such Notice, or as such party may direct. All
rentals received from the sublessee by Lessor or Lessors assignees, if any, as
the case may be, shall be credited against the amounts owing by Lessee under
this Lease.

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20.3.
Conveyance by Lessor. Lessor may assign this Lease to any purchaser of
the Leased Property. If Lessor or any successor owner of the Leased Property
conveys the Leased Property in accordance with the terms hereof other than as
security for a debt, and the grantee or transferee of the Leased Property
expressly assumes all obligations of Lessor hereunder arising or accruing from
and after the date of such conveyance or transfer, Lessor or such successor
owner, as the case may be, shall thereupon be released from all future
liabilities and obligations of Lessor under this Lease arising or accruing from
and after the date of such conveyance or other transfer as to the Leased
Property and all such future liabilities and obligations shall thereupon be
binding upon the new owner.

ARTICLE 21
QUIET ENJOYMENT; RISK OF LOSS

21.1.
Quiet Enjoyment. So long as Lessee pays all Rent as the same becomes due
and complies with all of the terms of this Lease and performs its obligations
hereunder, in each case within the applicable grace periods, if any, Lessee
shall peaceably and quietly have, hold and enjoy the Leased Property for the
Term hereof, free of any claim or other action by Lessor or anyone claiming by,
through or under Lessor, but subject to all liens and encumbrances subject to
which the Leased Property was conveyed to Lessor, to the extent not released in
connection with the transactions contemplated by this Lease, or hereafter
consented to by Lessee or provided for herein. Notwithstanding the foregoing,
Lessee shall have the right by separate and independent action to pursue any
claim it may have against Lessor as a result of a breach by Lessor of the
covenant of quiet enjoyment contained in this Section.

21.2.
Risk of Loss. During the Term, the risk of loss or of decrease in the
enjoyment and beneficial use of the Leased Property in consequence of the
damage or destruction thereof by fire, the elements, casualties, thefts, riots,
wars or otherwise, or in consequence of foreclosures, attachments, levies or
executions (other than those caused by Lessor and those claiming from, through
or under Lessor) is assumed by Lessee, and, in the absence of gross negligence,
willful misconduct or breach of this Lease by Lessor pursuant to Section 17.1,
Lessor shall in no event be answerable or accountable therefor, nor shall any
of the events mentioned in this Section entitle Lessee to any abatement of Rent
except as specifically provided in this Lease.

ARTICLE 22
LESSOR MORTGAGES; SUBORDINATION OF LEASE

22.1.
Lessor May Grant Liens. Without the consent of Lessee, Lessor may,
subject to the terms and conditions set forth below in this Section 22.1, from
time to time, directly or indirectly, create or otherwise cause to exist any
lien, encumbrance or title retention agreement (Encumbrance) upon the Leased
Property, or any portion thereof or interest therein, whether to secure any
borrowing or other means of financing or refinancing. Upon the request of
Lessor, Lessee shall subordinate this Lease to the lien of a new mortgage on
the Leased Property, on the condition that the proposed mortgagee executes a
non-disturbance agreement recognizing this Lease in accordance with the
provisions of Section 22.2, and agreeing, for itself and its successors and
assigns, to comply with the provisions of this Article 22.

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22.2.
Subordination of Lease. This Lease and Lessees interest hereunder shall
at all times be subject and subordinate to the lien and security title of any
deeds to secure debt, deeds of trust, mortgages, or other Encumbrances
heretofore or hereafter granted by Lessor or which otherwise encumber or affect
the Leased Property and to any and all advances to be made thereunder and to
all renewals, modifications, consolidations, replacements, substitutions, and
extensions thereof (all of which are herein called the Mortgage); provided,
however, that with respect to any Mortgage hereafter granted, such
subordination is conditioned upon delivery to Lessee of a non-disturbance
agreement which provides that Lessee shall not be disturbed in its possession
of the Leased Property hereunder following a foreclosure of such Mortgage (or
delivery of a deed-in-lieu-of-foreclosure) and that the holder of such Mortgage
or the purchaser at a foreclosure sale (or grantee under such
deed-in-lieu-of-foreclosure) shall perform all obligations of Lessor under this
Lease. In confirmation of such subordination, however, Lessee shall, at
Lessors request, promptly execute, acknowledge and deliver any instrument
which may be required to evidence subordination to any Mortgage and to the
holder thereof. In the event of Lessees failure to deliver such subordination
and if the Mortgage does not change any term of the Lease, Lessor may, in
addition to any other remedies for breach of covenant hereunder, execute,
acknowledge, and deliver the instrument as the agent or attorney-in-fact of
Lessee, and Lessee hereby irrevocably constitutes Lessor its attorney-in-fact
for such purpose, Lessee acknowledging that the appointment is coupled with an
interest and is irrevocable.

ARTICLE 23
ESTOPPEL CERTIFICATES; FINANCIAL STATEMENTS; INSPECTION RIGHTS

23.1.
Estoppel Certificates; Financial Statements.

(a)
At any time and from time to time upon not less than ten (10) days Notice by
Lessor, Lessee will furnish to Lessor an Officers Certificate certifying that
this Lease is unmodified and in full force and effect (or that this Lease is in
full force and effect as modified and setting forth the modifications), the
date to which the Rent has been paid, whether to the knowledge of Lessee there
is any existing default or Event of Default exists thereunder by Lessor or
Lessee, and such other information as may be reasonably requested by Lessor.
Any such certificate furnished pursuant to this Section may be relied upon by
Lessor, any lender and any prospective purchaser of the Leased Property.

(b)
Lessee will furnish the following statements to Lessor:

| |                                                                                                                                                                                                                                                                                                                                                               
| | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i)
 with reasonable promptness, such information respecting the financial
 condition and affairs of Lessee including audited financial statements
 prepared by the same certified independent accounting firm that prepares the
 returns for Lessor or such other accounting firm as may be approved by
 Lessor, as Lessor may request from time to time; and
| |                                                                                                                                                                                                                                                                                                                                                               
| | (ii)
 the most recent Consolidated Financials of Lessee within forty-five (45) days
 after each quarter of any Fiscal Year (or, in the case of the final quarter
 in                                                                                                                                                                                          

55

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| |                                                                                                                                                                                                                                                                                                                                                 
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | any Fiscal
 Year, the most recent audited Consolidated Financials of Lessee within ninety
 (90) days); and                                                                                                                                                                                                                                      
| |                                                                                                                                                                                                                                                                                                                                                 
| | (iii)
 on or about the 20th day of each month, a detailed profit and loss statement
 for the Leased Property for the preceding month, a balance sheet for the
 Leased Property as of the end of the preceding month, and a detailed
 accounting of revenues for the Leased Property for the preceding month, each
 in form acceptable to Lessor.

Lessee will
permit the inclusion of such statements in any filings required to be made by
Lessor under the Securities Act of 1933 and the Securities Exchange Act of
1934.

(c)
At any time and from time to time upon not less than ten (10) days Notice by
Lessee, Lessor will furnish to Lessee or to any Person designated by Lessee an
estoppel certificate certifying that this Lease is unmodified and in full force
and effect (or that this Lease is in full force and effect as modified and
setting forth the modifications), the date to which Rent has been paid, whether
to the knowledge of Lessor there is any existing default or Event of Default on
Lessees part hereunder, and such other information as may be reasonably
requested by Lessee.

(d)
Lessee shall at all times be Solvent. Furthermore, as of the date of this
Agreement, Lessee agrees to establish and maintain, in a form satisfactory to
Lessor, a funding commitment in an amount equal to $2,000,000 upon which Lessee
may draw upon to pay to Lessor Base Rent, Percentage Rent and Additional Charges.
Repayment of the funding commitment shall be subordinated to all payments of
Base Rent, Percentage Rent and additional charges under all Leases between
Lessor and Lessee.

23.2.
Lessors Right to Inspect. Lessee shall permit Lessor and its authorized
representatives as frequently as reasonably requested by Lessor to inspect the
Leased Property and Lessees accounts and records pertaining thereto and make
copies thereof, during usual business hours upon reasonable advance Notice,
subject only to any business confidentiality requirements reasonably requested
by Lessee.

ARTICLE 24
APPRAISERS

24.1.
Appraisers. If it becomes necessary to determine the Fair Market Value
or Fair Market Rental of the Leased Property for any purpose of this Lease, the
party required or permitted to give Notice of such required determination shall
include in the Notice the name of a Person selected to act as appraiser on its
behalf. Within ten (10) days after Notice, Lessor (or Lessee, as the case may
be) shall by Notice to Lessee (or Lessor, as the case may be) appoint a second
Person as appraiser on its behalf. The appraisers thus appointed, each of whom
must be a member of the American Institute of Real Estate Appraisers (or any
successor organization thereto) with at least five (5) years experience in the
State appraising property similar to the Leased Property, shall, within
forty-five (45) days after the date of the Notice appointing the first
appraiser, proceed to appraise the Leased Property to determine the Fair Market
Value or Fair Market Rental thereof as of the relevant date (giving effect to
the impact, if any, of inflation from the date of their decision to

56

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the relevant
date); provided, however, that if only one appraiser shall have been so appointed,
then the determination of such appraiser shall be final and binding upon the
parties. To the extent consistent with sound appraisal practice as then
existing at the time of any such appraisal, such appraisal shall be made on a
basis consistent with the basis on which the Leased Property was appraised for
purposes of determining its Fair Market Value at the time the Leased Property
was acquired by Lessor. If two (2) appraisers are appointed and if the
difference between the amounts so determined does not exceed five percent (5%)
of the lesser of such amounts, then the Fair Market Value or Fair Market Rental
shall be an amount equal to fifty percent (50%) of the sum of the amounts so
determined. If the difference between the amounts so determined exceeds five
percent (5%) of the lesser of such amounts, then such two appraisers shall have
twenty (20) days to appoint a third appraiser. If no such appraiser shall have
been appointed within such twenty (20) days or within ninety (90) days of the
original request for a determination of Fair Market Value or Fair Market
Rental, whichever is earlier, either Lessor or Lessee may apply to any court
having jurisdiction to have such appointment made by such court. Any appraiser
appointed by the original appraisers or by such court shall be instructed to
determine the Fair Market Value or Fair Market Rental within forty-five (45)
days after appointment of such appraiser. The determination of the appraiser
which differs most in the terms of dollar amount from the determinations of the
other two appraisers shall be excluded, and fifty percent (50%) of the sum of
the remaining two determinations shall be final and binding upon Lessor and
Lessee as the Fair Market Value or Fair Market Rental of the Leased Property,
as the case may be. This provision for determining by appraisal shall be
specifically enforceable to the extent such remedy is available under
applicable law, and any determination hereunder shall be final and binding upon
the parties except as otherwise provided by applicable law. Lessor and Lessee
shall each pay the fees and expenses of the appraiser appointed by it and each
shall pay one-half of the fees and expenses of the third appraiser and one-half
of all other costs and expenses incurred in connection with each appraisal.

ARTICLE 25
ARBITRATION AND DISPUTE RESOLUTION PROCEDURES

25.1.
Arbitration. Except as set forth in Section 25.2, in each case specified
in this Lease in which it shall become necessary to resort to arbitration, such
arbitration shall be determined as provided in this Section 25.1. The party
desiring such arbitration shall give Notice to that effect to the other party,
and an arbitrator shall be selected by mutual agreement of the parties, or if
they cannot agree within thirty (30) days of such notice, by appointment made
by the American Arbitration Association (AAA) from among the members of its
panels who are qualified and who have experience in resolving matters of a
nature similar to the matter to be resolved by arbitration.

25.2.
Alternative Arbitration. In each case specified in this Lease for a
matter to be submitted to arbitration pursuant to the provisions of this
Section 25.2, Lessor and Lessee will agree upon a nationally recognized
accounting firm with a hospitality division of which neither party nor their
Affiliates of Lessor is a significant client to serve as arbitrator of such
dispute within fifteen (15) days after written demand for arbitration is
received or sent by either party. In the event the parties fail to make such
designation within such fifteen (15) day period, Lessor shall be entitled to
designate any nationally recognized accounting firm with a hospitality division
of which Lessor or an Affiliate of Lessor is not a significant client to serve
as arbitrator of such dispute within fifteen (15) days after the parties fail
to timely make such designation. In the event Lessor

57

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fails to make
such designation within such fifteen (15) day period, Lessee shall be entitled
to designate any nationally recognized accounting firm with hospitality
division of which Lessee or an Affiliate of Lessee is not a significant client
to serve as arbitrator of such dispute within fifteen (15) days after the
parties fail to timely make such designation. In the event no nationally
recognized accounting firm satisfying such qualifications is available and
willing to serve as arbitrator, the arbitrator shall instead be administered as
set forth in Section 25.1.

25.3.
Arbitration Procedure. In any arbitration commenced pursuant to Sections
25.1 or 25.2, a single arbitrator shall be designated and shall resolve the
dispute. The arbitrators decision shall be binding on all parties, shall not
be subject to further review or appeal except as otherwise allowed by applicable
law and may be filed in and enforced by a court of competent jurisdiction. Upon
the failure of either party (the non-complying party) to comply with his
decision, the arbitrator shall be empowered, at the request of the other party,
to order such compliance by the non-complying party and to supervise or arrange
for the supervision of the non-complying partys obligation to comply with the
arbitrators decision, all at the expense of the non-complying party. To the
maximum extent practicable, the arbitrator and the parties, and the AAA if
applicable, shall take any action necessary to insure that the arbitration
shall be concluded within ninety (90) days of the filing of such dispute. The
fees and expenses of the arbitrator shall be shared equally by Lessor and
Lessee except as otherwise specified above in this Section 25.3. Unless
otherwise agreed in writing by the parties or required by the arbitrator or
AAA, if applicable, arbitration proceedings hereunder shall be conducted in the
State. Notwithstanding formal rules of evidence, each party may submit such
evidence as each party deems appropriate to support its position and the
arbitrator shall have access to and right to examine all books and records of
Lessee and Lessor regarding the Hotel during the arbitration.

ARTICLE 26
NOTICES

26.1.
Notices. All notices, demands, requests, consents approvals and other
communications (Notice or Notices) hereunder shall be in writing and
hand-delivered, sent by FedEx or other nationally recognized overnight courier
service, or mailed (by registered or certified mail, return receipt requested
and postage prepaid), if to Lessor at 814 East Main Street, Richmond, Virginia
23219, Attn: Krissy Gathright and if to Lessee at 814 East Main Street,
Richmond, Virginia 23219, Attn: Krissy Gathright or to such other address or
addresses as either party may hereafter designate. Personally delivered Notice
shall be effective upon receipt, and Notice given by overnight courier service
or by mail shall be complete at the time of deposit with the courier service or
in the U.S. Mail system, respectively, but any prescribed period of Notice and
any right or duty to do any act or make any response within any prescribed
period or on a date certain after the service of such Notice given by overnight
courier service shall be extended one (1) day and by mail shall be extended
five (5) days.

ARTICLE 27
MISCELLANEOUS

27.1.
No Waiver. No failure by Lessor or Lessee to insist upon the strict
performance of any term hereof or to exercise any right, power or remedy
consequent upon a breach thereof, and

58

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no acceptance
of full or partial payment of Rent during the continuance of any such breach,
shall constitute a waiver of any such breach or of any such term. To the extent
permitted by law, no waiver of any breach shall affect or alter this Lease,
which shall continue in full force and effect with respect to any other then
existing or subsequent breach.

27.2.
Remedies Cumulative. To the extent permitted by law and unless otherwise
provided herein to the contrary, each legal, equitable or contractual right,
power and remedy of Lessor or Lessee now or hereafter provided either in this
Lease or by statute or otherwise shall be cumulative and concurrent and shall be
in addition to every other right, power and remedy and the exercise or
beginning of the exercise by Lessor or Lessee of any one or more of such
rights, powers and remedies shall not preclude the simultaneous or subsequent
exercise by Lessor or Lessee of any or all of such other rights, powers and
remedies.

27.3.
Waiver of Trial by Jury. LESSOR AND LESSEE EACH WAIVE, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL BY JURY IN THE EVENT
OF A PROCEEDING WITH RESPECT TO THIS LEASE, INCLUDING, WITHOUT LIMITATION,
SUMMARY PROCEEDINGS TO ENFORCE THE REMEDIES SET FORTH IN ARTICLE 16.

27.4.
Acceptance of Surrender. No surrender to Lessor of this Lease or of the
Leased Property or any part thereof, or of any interest therein, shall be valid
or effective unless agreed to and accepted in writing by Lessor and no act by
Lessor or any representative or agent of Lessor, other than such a written
acceptance by Lessor, shall constitute an acceptance of any such surrender.

27.5.
No Merger of Title. There shall be no merger of this Lease or of the
leasehold estate created hereby by reason of the fact that the same Person may
acquire, own or hold, directly or indirectly: (a) this Lease or the leasehold
estate created hereby or any interest in this Lease or such leasehold estate
and (b) the fee estate in the Leased Property.

27.6.
Waiver of Presentment, Etc. Lessee waives all presentments, demands for
payment and for performance, notices of nonperformance, protests, notices of
protest, notices of dishonor, and notices of acceptance and waives all notices
of the existence, creation, or incurring of new or additional obligations,
except as expressly granted herein.

27.7.
Action for Damages. Except as otherwise expressly provided herein, in
any suit or other claim brought by either party seeking damages against the
other party for breach of its obligations under this Lease, the party against
whom such claim is made shall be liable to the other party only for actual
damages and not for consequential, punitive or exemplary damages.

27.8.
Lease Assumption in Bankruptcy Proceeding. If an Event of Default occurs
and Lessee has filed or has had filed against it a petition in bankruptcy or
for reorganization or other relief pursuant to the federal bankruptcy code,
Lessee shall promptly move the court presiding over the proceeding to assume
this Lease pursuant to 11 U.S.C. §365, without seeking an extension of the time
to file said motion.

59

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27.9.
Enforceability. Anything contained in this Lease to the contrary
notwithstanding, all claims against, and liabilities of, Lessee or Lessor
arising prior to any date of termination of this Lease shall survive such
termination. If any term or provision of this Lease or any application thereof
is invalid or unenforceable, the remainder of this Lease and any other
application of such term or provisions shall not be affected thereby. If any
late charges or any interest rate provided for in any provision of this Lease
are based upon a rate in excess of the maximum rate permitted by applicable
law, the parties agree that such charges shall be fixed at the maximum
permissible rate. Neither this Lease nor any provision hereof may be changed,
waived, discharged or terminated except by a written instrument in recordable
form signed by Lessor and Lessee. All the terms and provisions of this Lease
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns. The headings in this Lease are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof. This Lease shall be governed by and construed in accordance
with the laws of the State, but not including its conflicts of laws rules.

27.10.
Memorandum of Lease. Neither this Lease, nor any short form memorandum
thereof, shall be recorded in any land records.

[SIGNATURES ON NEXT PAGE]

60

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IN
WITNESS WHEREOF, the parties have executed this Lease by their duly authorized
officers as of the date first above written.

| |                                                                 |                      
| | --------------------------------------------------------------- | ---------------------
| | LESSOR                                                       
| |                                                                 |                      
| | APPLE TEN HOSPITALITY OWNERSHIP, 
 INC., a Virginia corporation
| |                                                                
| | By:                                                             | /s/ David P.
 Buckley
| |                                                                 |                      
| | Name:                                                           | David P.
 Buckley    
| | Title:                                                          | Vice
 President      
| |                                                                 |                      
| | LESSEE                                                       
| |                                                                 |                      
| | APPLE TEN HOSPITALITY MANAGEMENT,INC., a Virginia corporation  
| |                                                                
| | By:                                                             | /s/ David P.
 Buckley
| |                                                                 |                      
| | Name:                                                           | David P.
 Buckley    
| | Title:                                                          | Vice
 President      

---



EXHIBIT A
LEGAL DESCRIPTION

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

---



EXHIBIT B

SPACE LEASES

None

---



SCHEDULE 2.1
COMMENCEMENT DATE

March 4, 2011

---



SCHEDULE 3.1(a)
BASE RENT

|                |           
|--------------- | ----------
|Prorated
 2011: | $3,316,502
|                |           
|2011:           | $3,995,126

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SCHEDULE 3.1(b)
SUITE REVENUE BREAKPOINT

|                  |  |                |           |                 |   |           | 
|----------------- |  | -------------- | --------- | --------------- | - | --------- | 
|                  |  | Prorated
 2011 |           | Full Year
 2011 |  
|                  |  |                |           |                 |  
|Yearly Breakpoint |  | $              | 2,596,209 |                 | $ | 3,127,447 | 

---