EXHIBIT 10.6







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                              MANAGEMENT AGREEMENT



                 LOCATION:  _____________________________________


                 DATED:     JANUARY 1, 2001


                                 BY AND BETWEEN


                 OWNER:     ENN LEASING COMPANY I, L.L.C.



                 MANAGER:   PROMUS HOTELS, INC.





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                              MANAGEMENT AGREEMENT


         THIS  AGREEMENT,  made as of January 1, 2001 by and between ENN LEASING
COMPANY I, L.L.C., a Delaware limited  liability company  ("Owner"),  having its
principal office at 7700 Wolf River Boulevard,  Germantown,  Tennessee 38138 and
PROMUS  HOTELS,  INC., a Delaware  corporation  ("Manager"),  having a principal
office at 9336 Civic Center Drive, Beverly Hills, California 90210.

                              PRELIMINARY STATEMENT

         A.  Owner owns a first-class  Hampton Inn hotel on the land herein
described.

         B.  Manager,   together  with  its   Affiliates,   is  engaged  in  the
development, ownership, operation and licensing of Hampton Inn and Hampton Inn &
Suites hotels  throughout the United  States,  and Manager is experienced in the
various phases of hotel development and operations.

         C. Owner is  desirous of  utilizing  the  services  and  experience  of
Manager in connection  with the operation of the hotel,  and Manager  desires to
render such services, all upon the terms and conditions hereinafter set forth.

         NOW, THEREFORE, Owner and Manager agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

         1.01    Definitions. As used herein, the following terms shall have the
respective meanings indicated below:

                  1.01.1  Affiliate(s) - with respect to any entity, any natural
person or firm,  corporation,  partnership,  association,  trust or other entity
which,  directly or indirectly,  controls,  is controlled by, or is under common
control with, the subject  entity;  a natural person or entity which has another
entity  as an  Affiliate  under  the  foregoing  shall  also be  deemed to be an
Affiliate of such entity.  For purposes hereof the term "control" shall mean the
possession,  directly  or  indirectly,  of the  power to  direct  or  cause  the
direction of the  management  and  policies of any such entity,  or the power to
veto major policy decisions of any such entity, whether through the ownership of
voting securities, by contract, or otherwise.

                  1.01.2  Capital  Renewals - a  collective  term for (a) normal
capital  replacements  of, or  additions  to,  FF&E,  and (b)  special  projects
designed to maintain the Hotel in a first-class condition in accordance with the
standards   contemplated  by  this  Agreement,   including  without  limitation,
renovation of the guest room areas, public space, food and beverage  facilities,
or back of the house areas, which projects will generally comprise  replacements
of, or additions to, FF&E, but may include revisions and alterations in the




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Improvements;  most of the expenditures for such special projects will be
capitalized,  but a  portion  thereof  may be  currently  expended,  such as the
purchase of smaller  items of FF&E, or  expenditures  which are ancillary to the
overall  project but which are properly  chargeable to Property  Operations  and
Maintenance under the Uniform System of Accounts for Hotels.

                  1.01.3    Capital - Renewals Budget(s) - as defined in
Subsection 4.02.1(b).

                  1.01.4    Claims - as defined in Subsection 12.03.1.

                  1.01.5    CPI - as defined in Subsection 4.02.3.

                  1.01.6  Commencement  Date - January  1,  2001,  the date upon
which Manager shall commence to operate the Hotel under the Agreement.

                  1.01.7  Compensation - the direct  salaries and wages paid to,
or accrued for the benefit of, any executive or other employee together with all
fringe  benefits  payable to, or accrued for the benefit of, such  executive  or
other employee,  including  employer's  contributions  required  pursuant to any
Legal Requirement, or other employment taxes, pension fund contributions,  group
life and accident and health insurance premiums, and profit sharing, retirement,
disability  and other  similar  benefits and severance pay owned to employees at
the termination of this Agreement, if any.

                  1.01.8  Controlling Person - as defined in Subsection 12.05.

                  1.01.9 ERISA - the Employees Retirement Income Security Act of
1974, as amended.

                  1.01.10  Executive  Staff  -  the  general  manager,  resident
manager (if any),  the executive  assistant  manager (if any) and all department
heads,  including  Director  of  Finance,  Director  of Rooms  or  Front  Office
Operation,  Director of Food and Beverage, Director of Marketing and Director of
Human Resources.

                  1.01.11  FF&E  -  all   furniture,   furnishings,   equipment,
fixtures,  apparatus and other personal property used in, or held in storage for
use in (or if the  context  so  dictates,  required  in  connection  with),  the
operation of the Hotel, other than Operating  Equipment,  Operating Supplies and
fixtures attached to and forming part of the Improvements.

          1.01.12    Forecast - as defined in Subsection 4.02.1(a).

          1.01.13    Gross Operating Profit - as defined in the Management Fee
Rider.

          1.01.14    Gross Revenues - as defined in the Management Fee Rider

          1.01.15    Ground Lease - the ground lease, if any, described in
Exhibit II, pursuant to which the Land was demised to Owner for the term
indicated on said Exhibit II.



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          1.01.16    Group Services - as defined in Section 4.03.

          1.01.17    Hotel - the hotel, including the Premises, referred to in
the Preliminary Statement.

          1.01.18    Hotel Accounts - as defined in Section 7.01.

          1.01.19  Impositions - all taxes,  assessments,  water, sewer or other
similar rents, rates and charges,  levies, license fees, permit fees, inspection
fees  and  other  authorization  fees  and  charges,  which  at any  time may be
assessed, levied, confirmed or imposed on the Hotel or the operation thereof.

          1.01.20    Improvements - the buildings, structures (surface and
subsurface) and other improvements now or hereafter located on the Land.

          1.01.21    Intellectual Property - as defined in Section 11.01.

          1.01.22   Land - the parcel or parcels of land described in Exhibit I.

          1.01.23 Legal  Requirements - all public laws,  statutes,  ordinances,
orders, rules, regulations,  permits, licenses,  authorizations,  directions and
requirements of all  governments and  governmental  authorities,  which,  now or
hereafter,  may be  applicable  to  the  Premises  and  the  operation  thereof,
including, without limitation, those relating to zoning, building,  life/safety,
environmental and health, employee benefits, and providing continued health care
coverage under ERISA.

          1.01.24  License  Agreement - the License  Agreement  dated January 1,
2001  between  Manager,  as licensor,  and Owner,  as  licensee,  licensing  the
operation of the Hotel under the Hampton Inn name.

          1.01.25    Major Capital Improvements - as defined in Subsection
12.08.1.

          1.01.26 Managed Hotels - a collective term for the Hotel and all other
hotels within the United States of America owned,  leased and/or  operated under
the Hampton Inn and Hampton Inn & Suites names by Manager or its Affiliates.

          1.01.27    Manager Software - as defined in Section 11.01.

          1.01.28    Management Fee - as defined in the Management Fee Rider.

          1.01. 29   Minimum Working Capital Funds - as defined in Section 7.03.





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          1.01.30 Mortgage and Mortgagee - each term as defined in Section 9.04.

          1.01.31 Operating Cash Flow - as defined in the Management Fee Rider.

          1.01.32 Operating Equipment - all china, glassware, linens, silverware
and  uniforms  used in,  or held in  storage  for use in (or if the  context  so
dictates, required in connection with), the operation of the Hotel.

          1.01.33  Operating Period - the period beginning with the Commencement
Date and ending upon the expiration or termination of this Agreement.

          1.01.34  Operating  Supplies  -  consumable  items used in, or held in
storage for use in (or if the context so dictates, required in connection with),
the operation of the Hotel,  including food and beverages,  fuel, soap, cleaning
material, matches, stationery and other similar items.

          1.01.35 Operating Years - the Operating Years shall coincide with, and
be identical to, the calendar years,  except that the first Operating Year shall
be a partial year beginning on the Commencement Date and ending on the following
December 31, and if this Agreement shall be terminated effective on a date other
than  December 31 in any year,  then the partial year from January 1 of the year
in which such termination  occurs to such effective date of termination shall be
treated as an Operating Year;  references to "full  Operating  Years" shall mean
those Operating Years which are co-extensive  with full calendar years and shall
exclude any partial  Operating  Year at the  beginning or the end of the term of
this Agreement.

          1.01.36 Other  Managed  Hotels - all hotels and inns within the United
States other than the Hotel owned,  leased and/or  operated by Manager or any of
its Affiliates under the Hampton Inn and Hampton Inn & Suites names.

          1.01.37 Owner - the person or entity named in the preamble hereto,  or
the successor of Owner's interest with respect to this Agreement.

          1.01.38    Owner's Total Investment - as defined in the Management Fee
Rider.

          1.01.39  Permitted  Exceptions - (i) the Ground Lease, if any, and the
terms thereof; (ii) the Permitted Mortgage(s) and the terms thereof; (iii) liens
for Impositions not delinquent;  (iv)  undetermined or inchoate liens or charges
for  labor  or  materials  supplied  to  the  Project  in  connection  with  the
construction or current operation thereof, which have not at the time been filed
or recorded pursuant to law; and (v) easements, restrictions on use, zoning laws
and ordinances, rights of way and other encumbrances and minor irregularities in
title, which do not individually or in the aggregate impair the use of the
Premises for hotel purposes.



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          1.01.40    Permitted Mortgage - as defined in Section 9.04.

          1.01.41  Premises - a collective term for Land and  Improvements,  and
Owner's interest therein, and any greater estate or interest hereafter acquired,
together with all entrances,  exits, rights of ingress and egress, easements and
appurtenances belonging or pertaining thereto.

          1.01.42 Project - a collective term for the real and personal property
comprising the Hotel, and the development and operation thereof.

          1.01.43    Start-Up Budget - as defined in Section 4.021.1.

          1.01.44 Technical  Assistance Services - those advisory and consulting
services  which Manager and its  Affiliates  render to Other  Managed  Hotels in
connection with the organization and operation thereof,  through which Manager's
experience in the field is made available to such hotels and inns.

          1.01.45 Uniform System of Accounts for Hotels - shall mean the Uniform
System of Accounts for Lodging Industry (Ninth Revised Edition, 1996); such term
shall not be deemed to include any subsequent revisions of the Uniform System of
Accounts for Hotels.

         1.02  References.  Except  as  otherwise  specifically  indicated,  all
references  to  Article,  Section  and  Subsection  numbers  refer to  Articles,
Sections and Subsections of this Agreement, and all references to Exhibits refer
to the Exhibits  attached  hereto.  The words "herein",  "hereof",  "hereunder",
"hereinafter" and words of similar import refer to this Agreement as a whole and
not to any particular Article, Section or Subsection hereof. The terms "include"
and  "including"  shall each be construed as if followed by the phrase  "without
being limited to".  Unless  expressly  stated to the contrary,  reference to any
Section includes the following Subsections thereof.

                                   ARTICLE II

                                      TERM

2.01 The  Term.  The  initial  term of this  Agreement  ("Initial  Term")  shall
commence on the date  hereof and shall  expire at midnight of December 31 of the
2nd full Operating Year following the Commencement Date. Thereafter,  so long as
the License  Agreement is in full force and effect,  the term of this  Agreement
shall  continue on a month-  to-month  basis,  and Owner shall have the right to
terminate  this Agreement upon thirty (30) days prior written notice to Manager.
The Initial  Term,  as extended  pursuant to the  preceding  sentence,  shall be
referred to herein as the "Term".  In no event shall the Term of this  Agreement
exceed the term of the License Agreement.





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                                   ARTICLE III



Intentionally Deleted.


                                   ARTICLE IV

                                OPERATING PERIOD

4.01  Authority  and Duty of Manager.  Manager shall have the sole and exclusive
right and  obligation  to manage and operate the Hotel  pursuant to the terms of
this  Agreement and Manager agrees that it shall manage and operate the Hotel as
a first-class  hotel  comparable to Other Managed Hotels in accordance  with the
standards for Hampton Inn and Hampton Inn & Suites  hotels,  as set forth in the
Operating  Manual,  taking into account the size,  location and character of the
Project.  In  connection  therewith,   Manager  shall  have  the  authority  and
responsibility,  subject to the provisions of this  Agreement,  to (i) determine
operating policy,  standards of operation,  quality of service,  the maintenance
and physical appearance of the Hotel and any other matters affecting  operations
and management;  (ii) supervise and direct all phases of advertising,  sales and
business promotion for the Hotel; and (iii) carry out all programs  contemplated
by the Forecasts and Capital Renewals Budgets, which have been approved by Owner
pursuant to Section 4.02.  Owner agrees that it will cooperate  reasonably  with
Manager to permit and assist Manager to carry out its duties hereunder.

4.02     Forecasts and Capital Renewals Budgets.

4.02.1   Preparation.  Manager  will submit to Owner,  not less than  forty-five
         (45) days in advance of each Operating  Year,  the following  forecasts
         and budgets for such Operating Year:

         (a)      a  forecast  composed  of an  estimate  of profit  and loss by
                  month,  an  estimated  cash  flow  projection  by  month,  and
                  departmental forecast of operations (hereinafter  collectively
                  called the "Forecasts"); and

        (b)       a budget covering estimated Capital Renewals,  which indicates
                  in  reasonable  detail the  replacements  of, or additions to,
                  FF&E, and the nature of the special  projects  covered thereby
                  (herein called the "Capital Renewals Budget(s)").

         The current Capital Renewals Budget shall replicate historical spending
for Hampton Inn hotels.

         Budgets  for Major Capital  Improvements  initiated under Section 12.10
shall be treated  separately  and shall not be included in the Capital  Renewals
Budget.

         In addition to the Capital Renewals Budget, which shall be agreed upon
between Owner and Manager non later than the date that is sixty (60) days after




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this Agreement,  there  shall  be a budget ("Start-Up  Budget")  agreed  upon by
the parties.  Manager,  at Owner's expense,  shall promptly purchase and install
the items  contemplated in the Start- Up Budget no later than 90 days after the
date of this Agreement.

4.02.2   Review.  In  connection  with the  submission  of the Forecasts and the
         Capital Renewals Budgets, the representatives of Manager will meet with
         Owner to have an in-depth  discussion  thereof,  including a comparison
         with the previous  year's  performance  of the Hotel,  a discussion  of
         marketing strategy,  identity of markets and the proposed  expenditures
         contained in the Capital Renewals Budget.

4.02.3   Approval of Budgets. The Forecast and the Capital Renewals Budget shall
         be subject to the  approval of Owner,  which shall not be  unreasonably
         withheld or delayed,  it being contemplated that each such Forecast and
         Capital  Renewals  Budget  shall be agreed upon by the  parties  within
         fifteen (15) days after the submission of the same by Manager to Owner.
         If Owner shall fail to approve any Forecast or Capital  Renewals Budget
         within  fifteen (15) days after its submittal by Manager,  or to submit
         its written  objections  thereof to Manager  within such  period,  then
         Owner shall be deemed to have  approved the same.  In case of a dispute
         with regard to any Forecast,  then pending the settlement  thereof,  or
         until such  dispute is  resolved  in  accordance  with  Section  12.06,
         Manager  shall  be  entitled  to  continue  to  operate  the  Hotel  in
         accordance with the standards set forth herein and shall be entitled to
         make  expenditures  which are  contemplated  by and consistent with the
         Forecast  proposed by Manager for such Operating  Year;  provided that,
         subject to the standards of performance  described in Subsection 4.02.4
         below, the maximum approved amount of such expenditures  shall be equal
         to (a) the  aggregate of all items set forth in the Forecast  which are
         not  disputed  by  Owner,  plus (b) with  respect  to all  items in the
         Forecast  which  are  disputed  or  objected  to by Owner,  the  amount
         allocated to such item(s) in the Forecast for the immediately preceding
         Operating  Year  increased by the greater of (i) five percent  (5%), or
         (ii) the difference  between the Consumer Price Index (All Cities - All
         Items) (1982-84 = 100) (the "CPI"),  on January 1 of the Operating Year
         immediately  preceding  the  Operating  Year in question and the CPI on
         January 1 of the Operating Year in question.  In case of a dispute with
         regard to any Capital  Renewals  Budget,  then,  pending the settlement
         thereof,  Manager  shall be entitled to make  expenditures  for Capital
         Renewals during the then current  Operating Year in accordance with the
         Capital Renewals Budget approved for the prior Operating Year.

4.02.4   Performance Under Forecast.  Manager shall use commercially  reasonable
         efforts to achieve the results set forth in the  Forecast  with respect
         to any Operating Year; provided,  however, that Owner acknowledges that
         the Forecast is a  composition  of estimates  and,  therefore,  Manager
         cannot  guarantee or warrant that the actual operation of the Hotel for
         any  Operating  Year  will be as set  forth  in the  Forecast  for such
         Operating Year.

4.02.5   Intentionally Deleted.




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4.02.6  Compliance  with Capital  Renewals  Budget.  Manager  shall at all times
        comply with the applicable Capital Renewals Budget, and shall not
        deviate in any substantial respect therefrom; provided, however, that
        Manager shall be entitled to  reallocate  the amount  budgeted  with
        respect to any item in such  Capital Renewals Budget to another item
        budgeted therein, so long as the total amount of expenditures authorized
        thereunder shall not be exceeded.  Notwithstanding the foregoing,
        Manager  shall  be  entitled  to make  additional  expenditures  not
        authorized  under  the  then  applicable  Capital  Renewals  Budget  in
        case of emergencies  arising  out of fire or any other  like or unlike
        casualty, or in order to comply with any applicable  Legal Requirements.
        Manager will promptly notify  Owner of any expenditures not  authorized
        under  the then  applicable Capital Renewals Budget.

4.03    Group  Services.  Manager and its  Affiliates  will  furnish or cause to
        be furnished to the Hotel the benefits of "Group Services", which phrase
        shall mean (a) group  advertising,  (b) sales and business  promotion
        services on the same basis as furnished to Other  Managed  Hotels,  (c)
        national  marketing  programs (including  the any  guest  frequency  or
        loyalty  programs),  (d)  centralized reservation services, (e) credit
        card services, (f) the Manager Software and (g) such  additional  group
        or regional  services and  facilities  as Manager  shall hereafter
        furnish to Other Managed Hotels as a group or regionally. Owner agrees
        that the  Hotel  shall  honor all  credit  cards  accepted  by  Manager
        and its Affiliates,  and that the Hotel's policy  regarding  association
        with any other credit card system shall be in conformity  with Manager's
        general policy at the time in effect.

        Manager shall advertise and promote the Hotel in coordination with the
        sales and marketing programs of Manager and Other Managed Hotels.
        Manager may participate in sales and promotional campaigns and
        activities involving complimentary rooms. Manager,  in marketing and
        advertising  the Hotel,  shall have the right to use marketing  and
        advertising  services of employees of Manager and its parent and
        affiliated  companies not located at the Hotel. Manager may charge the
        Hotel for personnel and other costs and expenses incurred in providing
        such Group Service; provided that (i) Manager's  allocation of such
        costs and expenses among hotels, including the Hotel, shall be pro rated
        among all hotels  owned or managed by Manager  and (ii) the annual
        allocation  of such costs and  expenses  for Group Services shall not
        exceed $10,000.00. Such costs and expenses for Group Services shall be
        reflected  in the  budgets  and  operating  statements  required to be
        prepared and submitted by Manager under this Management Agreement.

4.04    Technical Assistance Services. During the Operating Period, Manager,
        through its Technical  Assistance  Service  program,  will  provide,  as
        needed, supervisory and control  services to the Hotel's front office,
        food, personnel and other operating departments.

4.05    Personnel.

4.05.1  General. Manager shall hire, discharge, promote and supervise the
        Executive Staff of the Hotel, and shall supervise through said Executive
        Staff the hiring, discharging, promotion and work of all other operating
        and service



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        employees of the Hotel.  All members of the Executive Staff of the
        Hotel  shall be properly  qualified  for their  positions,  and the
        direct compensation  payable to such persons shall be comparable to the
        direct compensation paid to the members of the Executive Staff of other
        comparable  hotels,  taking into  account the  location and size of the
        Hotel.  If the general  manager for the Hotel  selected by Manager from
        time to time is not then an  existing  employee  of  Manager  providing
        services for Manager at one of the Other  Managed  Hotels,  Owner shall
        have the right to consult with Manager  regarding  the selection of any
        such  individual  as the  general  manager of the Hotel,  but the final
        selection  of such  general  manager  shall  be at  Manager's  sole and
        absolute discretion.

4.05.2  Manager as Employer.  All  employees of the Hotel shall be employees of
        Manager,  and all  Compensation  of  such  employees  shall  be paid by
        Manager,   and  the  amount  of  such  payments  shall  immediately  be
        reimbursed to Manager by Owner in accordance  with Section 4.07 hereof.
        Manager  shall also have the right to use  employees  of Manager or its
        Affiliates  not  located at the Hotel to provide  services to the Hotel
        ("Off-Site Personnel") and the right to have the general manager of the
        Hotel serve as the regional  manger for Other Managed  Hotels,  and all
        Compensation of such Off-Site Personnel shall immediately be reimbursed
        to Manager by Owner in  accordance  with Section  4.07 hereof.  Manager
        shall  also  have  the  right  to have  Off-Site  Personnel  performing
        regional or area duties  relating to the Hotel and Other Managed Hotels
        lodged at the Hotel  from  time to time  free of  charge.  Accordingly,
        Manager shall establish  appropriate payroll accounts covering all such
        employees  of the Hotel.  Arrangements  shall be made such that Manager
        can draw on the  Hotel  Accounts  to  transfer  funds  to such  payroll
        accounts immediately upon its payment of such Compensation.

4.05.3  Labor Relations. Manager shall negotiate for the best interest of Owner
        with any labor  unions  representing  employees  of the Hotel,  but any
        collective  bargaining  agreement or labor contract resulting therefrom
        will be  executed  by  Manager  as the  employer.  In  addition,  it is
        understood  that,  with  respect to labor  negotiations  not  involving
        multi-employer  bargaining  arrangements  applicable  to the  Hotel and
        other hotel  properties not owned or managed by Manager,  Manager shall
        consult  with  Owner in advance  of,  and,  to the extent  practicable,
        during the course of, negotiations with any labor union.

4.05.4  Manager  Personnel.  If Manager shall reasonably deem it advisable,  it
        shall assign the general  manager,  the controller and other members of
        the Executive  Staff of the Hotel from the employees of Manager and its
        Affiliates  or from  the  staff  of  Other  Managed  Hotels.  All  such
        employees will be paid their regular Compensation, such Compensation to
        be paid by the Hotel, or if Manager deems it advisable,  by Manager, in
        which case Manager will be reimbursed by Owner  therefor as provided in
        Section 4.07.

4.05.5  Business Expenses. The Executive Staff and other appropriate employees




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        of the Hotel  shall also be  reimbursed  for all  reasonable business
        expenses  pertaining to the Hotel, including business entertainment and
        travel  expenses,  in  accordance  with the standard practices in effect
        at Other Managed Hotels.

4.05.6  Benefit Plans. etc. Manager shall have the right to provide,  and shall
        be obligated to provide if required by Owner,  to the  employees of the
        Hotel who are eligible  therefor and who are not covered by  collective
        bargaining  or similar  arrangements,  with  benefits of the  incentive
        plans,  and the pension,  profit sharing or other employee  retirement,
        disability,  health or  welfare or other  benefit  plan or plans now or
        hereafter  applicable  to employees  of Other  Managed  Hotels,  and to
        charge  the  Hotel  with the  Hotel's  pro rata  share of the costs and
        expenses of such plan or plans allocated to the Hotel on the same basis
        as allocated to participating Other Managed Hotels.

        The parties  agree  and  acknowledge  that  Manager  may (but  shall not
        be required to) provide benefits and allow  participation in such plans
        on whatever modified  basis as it may determine  appropriate  under  the
        circumstances, and may waive any waiting period or any preconditions to
        coverage or participation  otherwise  applicable to such employees.  No
        statement,  promise,  representation or warranty regarding the terms of
        such plans or the  participation  or  coverage  of  employees  shall be
        enforceable, binding or effective in any way unless made in writing and
        signed by an authorized representative of Manager.

        Notwithstanding the foregoing,  in no event shall Manager  initiate or
        adopt any plans, programs or benefits for Hotel employees not otherwise
        in effect at Other  Managed  Hotels  unless  required  by  applicable
        collective bargaining agreements.

4.06    Additional Responsibilities of Manager. Manager shall, as agent of Owner
        either in its own name, or in the name of Owner, perform the following
        additional services, or cause the same to be performed for the Hotel:

        (a)       establish and revise,  as necessary,  administrative  policies
                  and  procedures,  including  policies and  procedures  for the
                  control of revenue and  expenditures,  for the  purchasing  of
                  supplies and services,  for the control of credit, and for the
                  scheduling  of  maintenance,  and  verify  that the  foregoing
                  procedures are operating in a sound manner;

        (b)       subject to the prior  written  approval  of Owner,  consummate
                  leases with respect to the  commercial and office space in the
                  Premises and concession or other  arrangements with respect to
                  other space and facilities on the Premises;

        (c)       enter into any  contracts  for goods or services to the Hotel;
                  provided that Owner's prior written approval shall be required
                  for any contract having a non-terminable term in excess of the
                  expiration of the term of this Agreement,  or if the amount of
                  the aggregate expenditures thereunder




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                  would, or are reasonably anticipated to, exceed $50,000.00 (as
                  adjusted for increases in the CPI from January 1, 2001) in the
                  aggregate per annum; or

        (d)       subject to compliance  with the  applicable  Capital  Renewals
                  Budget, make all repairs, decorations,  revisions, alterations
                  and improvements to the Hotel as shall be reasonably necessary
                  for the proper  maintenance  thereof in good order,  condition
                  and repair;

        (e)       purchase such Operating Equipment and Operating Supplies as
                  shall be reasonably necessary for the proper operation of the
                  Hotel in accordance with the Forecasts and Capital Renewals
                  Budget;

        (f)       apply for, and use its best effort to obtain and maintain, all
                  licenses   and  permits   required  of  Owner  or  Manager  in
                  connection  with the  operation  and  management of the Hotel;
                  Owner  agrees to execute and deliver any and all  applications
                  and other  documents  as shall be  reasonably  required and to
                  otherwise cooperate,  in all reasonable respects, with Manager
                  in applying for,  obtaining and maintaining  such licenses and
                  permits;

        (g)       use its  reasonable  best  efforts to do, or cause to be done,
                  all such  acts and  things  in and about the Hotel as shall be
                  reasonably necessary to comply with Legal Requirements and the
                  terms of all  insurance  policies,  and to discharge any lien,
                  encumbrance  or charge on or with respect to the Hotel and the
                  operation thereof, other than Permitted Exceptions;

        (h)       in accordance with the Forecasts, pay all Impositions and
                  insurance premiums, when due;

        (i)       use its  reasonable  best efforts to cause the Hotel to comply
                  with all  applicable  covenants  and  provisions of the Ground
                  Lease  (if  any)  and   Mortgage,   and  pay,  when  due,  the
                  installments  of rental under the Ground Lease (if any) and of
                  principal and interest on the Mortgage; and

        (j)       subject to the prior written  approval of Owner,  retain legal
                  counsel for the Hotel, which legal counsel shall perform legal
                  services under the direction of Manager.

        Owner shall be entitled  to meet with the  regional  manager of Manager
        or other responsible  Manager  representatives on a quarterly basis to
        review and discuss the  operation  of the  Hotel,  including  any
        substantial  deviation  from the operating  strategies,  policies or
        procedures which form the basis on which the current Forecasts were
        made.  Manager shall reasonably  consider any comments or suggestions of
        Owner.

4.07    Reimbursements  to Manager.  In addition  to the  Management  Fee
        provided for in Article VI, Manager and its  Affiliates  shall be
        entitled to be reimbursed for the following costs and expenses  incurred
        in rendering  services to the Hotel:

        (a)       the Hotel's pro rata share of all costs and expenses incurred
                  in connection with the rendition of Group  Services in an
                  amount not to exceed  $10,000.00 per annum,  in accordance
                  with Section 4.03 herein,  allocated on the same basis as
                  allocated to Other Managed Hotels;




<PAGE>





        (b)       the Compensation paid by Manager or its Affiliates to Hotel
                  employees;

        (c)       the  Compensation  payable to all officers and employees of
                  Manager and its  Affiliates  (other  than  Vice  Presidents,
                  and higher ranking executive officers), who are  not  assigned
                  to  the  Hotel,  under Subsection  4.05.4,  while  working on
                  an  assignment  for the specific benefit of the Hotel;

        (d)       reasonable  travel and entertainment expenses of all  officers
                  and employees  of Manager and its  Affiliates  incurred in
                  performing  its duties  hereunder in connection with any phase
                  of the operation of the Hotel in accordance with the policies
                  of Manager then in effect;

        (e)       the Compensation and expenses paid or reimbursed by Manager or
                  its Affiliates to all  independent  consultants  rendering
                  services to the Hotel if and to the  extent  contemplated  in
                  the  Forecast  or Capital Renewals  Budget for such  Operating
                  Year or as otherwise  approved by Owner;

        (f)       the costs and expenses of centralized accounting services
                  under Section 7.07; and

        (g)       all other expenditures which are authorized,  permitted or
                  required under the provisions of this Agreement which have
                  been paid or funded by Manager on Owner's behalf.

It is agreed  that,  to the extent the entire  amount of  Compensation  or other
expense  reimbursable to Manager or its Affiliates  under the provisions of this
Section 4.07, or under any other  provisions of this Agreement,  is not incurred
solely  for the  benefit  of the Hotel,  then such  amount or  expense  shall be
appropriately allocated.

Manager shall be entitled to reimburse  itself and its  Affiliates for the above
items out of the Hotel Accounts.

                                    ARTICLE V

                                    INSURANCE

5.01    Coverage.

        5.01.1 Required Insurance. The following insurance shall be secured and
        maintained with respect to the Hotel at all times during the term of
        this Agreement:


        (a)       All risk property insurance, including fire, windstorm, flood,
                  earthquake  and  other  risks  covered  by  extended  coverage
                  endorsements  on the  Improvements  and  contents in an amount
                  equal to the full replacement value thereof,




<PAGE>




        (b)       All risk  business  interruption  insurance,  including  fire,
                  windstorm,  flood,  earthquake  and  other  risks  covered  by
                  extended  coverage  endorsements  for full recovery of the net
                  profits  of the  Hotel  for  the  entire  period  of any  such
                  business interruption;

        (c)       Insurance  against loss from accidental damage to, or from the
                  explosion of, boilers,  air  conditioning  systems,  including
                  refrigeration  and  heating  apparatus,  pressure  vessels and
                  pressure  pipes in an  amount  equal  to the full  replacement
                  value of such items;

        (d)       Business  interruption  insurance against loss from accidental
                  damage to, or from the explosion of, boilers, air conditioning
                  systems,   including   refrigeration  and  heating  apparatus,
                  pressure  vessels and pressure  pipes for full recovery of the
                  net  profits  for  the  entire  period  of any  such  business
                  interruption;

        (e)       Commercial general liability,  commercial automobile liability
                  insurance  including coverage for owned,  non-owned and leased
                  automobiles,  garage keepers liability, products and completed
                  operations,   contractual  liability,   liquor  liability  and
                  innkeepers'   liability   in   an   amount   not   less   than
                  $25,000,000.00 per occurrence;

        (f)      Comprehensive crime insurance in an amount equal to not less
                  than $5,000,000.00;

        (g)       Statutory workers' compensation benefits and employers'
                  liability insurance in an amount not less than $1,000,000.00;
                  and

        (h)       Insurance  against such other  insurable risks as Manager may,
                  from time to time,  reasonably  require  and as  required  for
                  Other Managed Hotels.

                  5.01.2  Intentionally Deleted.

5.01.3   Responsibility to Maintain..  During the Operating Period, Owner, or if
         and to the extent requested by Owner,  Manager at the expense of Owner,
         shall  procure and maintain  the above  insurance  policies,  including
         those required under clauses (e) through (h) of Subsection 5.01.1.

5.01.4   Changes in Coverage.  Manager,  by notice to and with the prior written
         approval of Owner,  shall have the right to raise the minimum amount of
         insurance  to be  maintained  with respect to the Hotel under the above
         Subsection  5.01.1 to make such  insurance  comparable to the amount of
         insurance  carried with respect to Other  Managed  Hotels,  taking into
         account the size and location of the Hotel. In addition,  neither party
         shall unreasonably withhold its consent to a request by the other party
         that such minimum limits of insurance be lowered on the basis that such




<PAGE>



         insurance cannot be obtained in such amounts, or can be obtained only
         at a prohibitive cost. Similarly, if during the term of this  Agreement
         changes in the insurance industry  shall  make  any description of  the
         required  insurance coverage  inaccurate or inappropriate, then Manager
         shall have the right, by notice to and with the prior written  approval
         of Owner, to change such  requirements to accurately  describe,  in the
         then  current  vernacular,  the  type of insurance  which would be
         comparable  to the coverage  described in the above Subsection 5.01.1.

         5.01.5   Requirements. All policies of insurance shall be written on an
         "occurrence" basis, if possible. The insurance coverage shall in any
         event comply with the requirements of the Mortgage, if any.

         5.02     Policies and Endorsements.

         5.02.1  Policies.  All  insurance  provided for under the above Section
         5.01 shall be effected by policies  issued by  insurance  companies of
         good reputation and of sound and adequate  financial  responsibility.
         The party procuring such insurance  shall deliver to the other party
         certificates of insurance  with  respect to all of the  policies of
         insurance so procured, including  existing,  additional and renewal
         policies,  and in the case of insurance  about to expire, shall deliver
         certificates of insurance with respect to the renewal  policies  to the
         other  party not less than thirty (30) days after the respective dates
         of expiration. If Owner shall elect to procure any portion of the
         property  insurance,  it shall also  deliver to Manager  full  copies
         of  the  policies  under  which  such  insurance  is maintained.

5.02.2   Endorsements. All policies of insurance provided for under this Article
         V shall have attached thereto (a) an endorsement that such policy shall
         not be canceled or materially changed without at least thirty (30) days
         prior written  notice to Owner and Manager,  and (b) an  endorsement to
         the effect that no act or omission of Owner or Manager shall affect the
         obligation of the insurer to pay the full amount of any loss sustained.
         All insurance  policies  procured by Owner shall contain an endorsement
         to the effect  that such  insurance  shall be  primary  to any  similar
         insurance carried by Manager.

5.02.3   Named  Insureds.  All policies of insurance  required under clauses (a)
         through (d) of Subsection 5.01.1 shall be carried in the name of Owner,
         and, if required,  Mortgagee and the lessor under the Ground Lease, and
         Manager  shall be named as an  additional  insured  thereunder.  Losses
         thereunder  shall  be  payable  to  the  parties  as  their  respective
         interests may appear. Notwithstanding the foregoing, if Mortgagee is an
         institutional  lender,  and so requires,  losses may be made payable to
         Mortgagee,  or to a bank or trust  company  qualified to do business in
         the state where the Hotel is located, in either instance as trustee for
         the custody and disposition of the proceeds therefrom.  Owner agrees to
         use  reasonable  efforts to cause  Mortgagee to agree that its Mortgage
         shall  contain a provision to the effect that  proceeds  from  property
         insurance  shall be made available for  restoration  of the Hotel.  All
         insurance  policies required in clauses (e), (f), and (g) of Subsection
         5.01.1,  shall  name  Owner and its  Affiliates,  directors,  officers,
         agents  and  employees  of each  such  entity  as named  insureds,  and
         Manager, its Affiliates,  directors,  officers, agents and employees of
         each such entity as additional insureds.





<PAGE>



5.03    Waiver of Liability.  Neither Manager nor Owner shall assert against the
        other,  and do hereby  waive with  respect to each  other,  or against
        any other entity or person named as additional insureds on any policies
        carried under this Article V, any claims for any losses, damages,
        liability or expenses (including attorneys' fees) incurred or sustained
        by either of them on account of injury to persons or damage to  property
        arising  out of the  ownership,  development, construction,  completion,
        operation or maintenance of the Hotel, to the extent that the same are
        covered by the insurance  required  under this Article V. Each policy of
        insurance shall contain a specific  waiver of subrogation reflecting the
        provisions  of this  Section  5.03,  and a provision to the effect that
        the existence  of the  preceding  waiver  shall not affect the  validity
        of any such policy  or the  obligation  of the  insurer  to pay the full
        amount of any loss sustained.

5.04    Insurance by Manager.  Any insurance provided by Manager under this
        Article V may, subject to Owner's approval, be effected  under  policies
        of blanket insurance  which  cover other  properties  of Manager and its
        Affiliates, and Manager shall have the right to charge the Hotel with
        the Hotel's pro rata share of such premiums  shall be allocated to the
        Hotel on the same basis as allocated to participating  Other Managed
        Hotels. Any policies of insurance  maintained by Manager pursuant to the
        provisions  of this  Article V may contain deductible provisions in such
        amounts as are  maintained  with  respect to Other  Managed Hotels,  for
        which Owner shall be responsible or which  Manager,  at Owner's expense,
        may  pay.  Further,  in lieu of all or a part  of  commercial  general
        liability insurance and worker's compensation and employer's liability
        insurance under clauses (e) and (g) of Subsection  5.01.1, any or all of
        the risks covered by such insurance, at Manager's option, shall be self-
        insured or self-assumed by Owner under a  self-insurance  or assumption
        of risk program similar to those in effect at Other  Managed Hotels,  up
        to such amounts which  such  risks  are self-insured or assumed at Other
        Managed Hotels.

                                   ARTICLE VI

                                 MANAGEMENT FEE

In addition to the  reimbursements  required  under  Section 4.07 for  Manager's
services  hereunder  during the  Operating  Period,  Owner shall pay Manager the
Management Fee computed and made payable as provided in the Management Fee Rider
attached hereto.

                                   ARTICLE VII

                  ACCOUNTS; WORKING FUNDS; RECORDS AND REPORTS

7.01    Bank Accounts. Bank accounts for the Hotel will be established at a
        banking institution  or  institutions  mutually  approved  by Owner  and
        Manager, such accounts to be in Manager's name, as agent for Owner
        (herein  called the "Hotel Accounts").  The Hotel Accounts shall consist
        of (i) a local depository account, (ii) a credit card clearing account
        and (iii) a high yield  investment  account. Notwithstanding the
        foregoing,  bank accounts used for the purpose of performing centralized
        accounting  functions  under this  Agreement  shall be  established
        solely by Manager at banking institution(s) as selected by Manager.
        Manager will deposit in such Hotel




<PAGE>



        Accounts all monies  furnished by Owner as working  funds under Section
        7.03 and all monies received from the operation of the Hotel, and shall
        disburse the same for the purposes set forth in the following  Section
        7.02.  Notwithstanding  the foregoing,  Manager  shall be entitled to
        maintain  such funds as it  reasonably deems proper in house banks or in
        petty cash funds at the Hotel.

7.02    Expenditures. From the Hotel Accounts (or, if appropriate, from house
        banks or petty cash funds available at the Hotel), Manager is hereby
        authorized to pay such amounts and at such times as are required in
        connection with the ownership, maintenance  and  operation  of the Hotel
        and  related  facilities,  including, without  limitation, the following
        (subject to the approval of Owner where such approval is required
        hereunder):

        (a)       the Compensation and expenses of the Executive Staff and other
                  employees of the Hotel;

        (b)       all costs and expenditures incurred or made in connection with
                  the authorized  items under Section 4.06 and all other
                  expenditures  which Manager is permitted  or required to make
                  under any other  provision of this Agreement;

        (c)       reimbursements and other amounts due to Manager and its
                  Affiliates under Section 4.07, or under any other provisions
                  of this Agreement;

        (d)       premiums for any insurance maintained by Manager in accordance
                  with the provisions of Article V; and

        (e)       the Management Fee computed in accordance  with the provisions
                  of the Management Fee Rider, and all fees,  charges and
                  contributions payable to the licensor and its Affiliates under
                  the License Agreement.


        Each week during the Operating Period, Manager shall cause amounts in
        the Hotel Accounts  in excess of the  Minimum  Working  Capital  Funds
        as set forth in the following Section 7.03 to be wired to a bank account
        designated for such purpose by Owner.

7.03    Working Fund Requirements.  Upon the Commencement Date, Owner shall
        deposit $50,000 in the Hotel Accounts as initial working capital for the
        Hotel;  and thereafter,  Owner, upon reasonable request of Manager,  by
        notice  specifically setting  forth  the  amount of the  required  funds
        and an  explanation  of the necessity  for such funds,  shall  provide
        funds,  to be deposited in the Hotel Accounts,  as provided in Section
        7.01, sufficient at all times to assure the uninterrupted and  efficient
        operation of the Hotel, including, without limitation, sufficient  funds
        to pay all of the items described or specified in the  preceding Section
        7.02.  and Manager  shall retain such  $50,000  initial deposit such as
        minimum working capital  ("Minimum  Working Capital Funds ") for
        the first 90 days of the Operating Period,  and thereafter Manager shall
        retain Minimum Working  Capital Funds in an amount  mutually  determined
        by Manager and Owner to assure the uninterrupted and efficient operation
        of the Hotel.  In connection with the annual  forecast and budget review
        under Section 4.02,  the Minimum Working Capital shall be reviewed and
        increased by the parties  annually by mutual agreement as necessary to
        satisfy the working capital requirements of this Section.  If Manager is




<PAGE>



        unable to  perform  any of its agreements or covenants under this
        Agreement because of such failure on the part of Owner to provide the
        required funds, such failure of performance on the part of Manager shall
        not be deemed a default  on the part of Manager  and shall not give rise
        to any right of  termination, damages or any other remedy on the part of
        Owner against Manager.

7.04    Books and Records. Manager shall keep full and adequate books of account
        and such other  records as are necessary to reflect the results of the
        operation of the Hotel.  For this  purpose,  Owner  agrees that it will
        make  available to Manager,  or its  representatives,  all books and
        records,  including  contract documents, invoices and all other
        construction records pertaining to the initial development of the Hotel
        and any Major Capital Improvements.  Manager shall keep the books and
        records for the Hotel in all material  respects in accordance with the
        Uniform System of Accounts for Hotels, on an accrual basis in accordance
        with generally accepted accounting principles consistently applied.
        Owner or its independent accounting firm shall have the right to examine
        the books and records of the Hotel at any reasonable time upon 48 hours
        notice to Manager.

7.05    Reports to Owner. Manager shall deliver, or cause to be delivered, to
        Owner the following statements:

        (a)       within  twenty  (20)  days  after  the end of each  calendar
                  month,  a detailed profit and loss statement,  substantially
                  in the form used at Other Managed Hotels, showing the results
                  of operation of the Hotel for such month and the year-to-date,
                  and a  statement  of  departmental operations, for such month
                  and year-to-date, and having annexed thereto a  computation in
                  reasonable  detail of the  Management  Fee for such preceding
                  month and the  year-to-date,  calculated  as provided in the
                  Management  Fee Rider  and for the  second  full year of the
                  Operating Period, such reports shall include a comparison with
                  the prior year's results;

        (b)       within sixty (60) days after the end of each  Operating  Year,
                  an unaudited financial statement consisting of a balance
                  sheet, a related statement of profit and loss and a statement
                  of cash flows, and having  annexed  thereto a computation  in
                  reasonable  detail of the Management Fee for such year,
                  calculated as provided in the Management Fee Rider and for the
                  second  full year of the  Operating  Period,  such  reports
                  shall  include a  comparison  with the prior  year's  results.
                  Audited financial statements shall be at Owner's sole cost and
                  expense.

7.06    Owner's Rights to Inspection and Review.  Upon  reasonable  advance
        written notice to the general manager of the Hotel,  Manager shall
        accord to Owner,  its accountants, attorneys and agents, the right to
        enter upon any part of the Hotel at all  reasonable  times during the
        term of this Agreement for the purpose of examining  or  inspecting  the
        same or  examining  and  making  extracts  of the financial  books and
        records of the Hotel or for any other  purpose which Owner, in its
        discretion,  shall deem  necessary or advisable,  but same shall be done
        without  material  disruption to the operation and business of the Hotel
        and for the second full year of the  Operating  Period,  such  reports
        shall  include a comparison with the prior years results.





<PAGE>



7.07    Centralized Accounting Services. Manager may, in its reasonable
        discretion, handle directly, or through an Affiliate or one of the Other
        Managed Hotels, any of the  accounting  functions  for  the  Hotel,
        including without limitation, accounts payable,  general ledger, payroll
        and accounts receivable,  or any part thereof,  on a centralized  basis
        with one or more Other Managed Hotels for the purpose of achieving a
        more  cost-efficient  operation of the Hotel.  Manager or its Affiliate
        or the Other Managed Hotel furnishing such centralized  accounting
        functions shall be entitled to be reimbursed or paid from the Hotel
        Accounts for (i) the pro rata share of the costs and  expenses of
        providing  such  accounting functions allocated to the Hotel on the same
        basis as allocated to participating Other Managed Hotels utilizing such
        centralized  accounting  services,  and (ii) such amounts  required to
        cover or  reimburse  Manager,  its  Affiliate or Other Managed Hotel for
        the payment of authorized  expenditures  by such entity under Section
        7.02 as a part  of  such  centralized  accounting  services,  provided,
        however, that such pro rata share and reimbursed amounts shall not
        exceed $1,040 per month,  as such amount may be increased in accordance
        with increases in CPI from January 1, 2001.

                                  ARTICLE VIII

                               TERMINATION RIGHTS

8.01    Termination by Owner. If any one of the following events shall happen:

        (a)       if Manager shall fail to keep, observe or perform any material
                  covenant,  agreement,  term or provision of this Agreement to
                  be kept,  observed or performed by Manager,  and such default
                  shall continue for a period of thirty (30) days after notice
                  thereof by Owner to Manager;

        (b)       if  Manager  shall apply  for or  consent  to  the appointment
                  of a receiver,  trustee or liquidator of Manager or of all or
                  a  substantial  part of its  assets,  file a  voluntary
                  petition in bankruptcy, or admit in writing its inability to
                  pay debts as they come due, make a general  assignment for the
                  benefit of  creditors,  file a petition  or an  answer seeking
                  reorganization or arrangement with creditors or take advantage
                  of any  insolvency  law, or file an answer admitting the
                  material  allegations of a petition filed against Manager in
                  any bankruptcy, reorganization or insolvency proceeding, or if
                  any order, judgment or decree shall be entered by any court of
                  competent jurisdiction, on the application of a creditor,
                  adjudicating Manager a bankrupt or insolvent or approving a
                  petition seeking reorganization of Manager or  appointing a
                  receiver,  trustee or liquidator of Manager or of all or a
                  substantial part of its assets, and such order, judgment or
                  decree  shall  continue  unstayed and in effect for any period
                  of sixty 60) consecutive days; or

        (c)       if a right of termination on the part of Owner shall have
                  arisen under Sections 10.01 or 10.02;

        then Owner shall have the right to terminate  this Agreement upon
        written notice to Manager  given at any time following the occurrence of
        such event,  or if a period of grace is provided,  then  following the
        expiration of the applicable grace period, and while such event shall be
        continuing, and this Agreement shall terminate  upon the date  specified
        therein, which date shall be not less than thirty (30) days nor more
        than seventy-five (75) days after the date of the giving of such notice.




<PAGE>



8.02    Termination by Manager. If any of the following events shall happen:

        (a)       Owner shall fail to provide funds to be deposited in the Hotel
                  Accounts in accordance  with the  provisions of  Section  7.03
                  within ten (10) days after Manager's request for such
                  additional funds under Section 7.03, and such failure
                  continues for an additional  ten (10) day period after written
                  notice by Manager to Owner that such funds have not yet been
                  received;

        (b)       Owner shall fail to keep, observe or perform any other
                  material covenant, agreement, term or provision of this
                  Agreement to be kept, observed or performed by Owner, and such
                  default shall continue for a period of thirty (30) days after
                  notice thereof by Manager to Owner;

        (c)       [Intentionally Deleted.]

        (d)       If Owner shall apply for or consent to the appointment of a
                  receiver, trustee or  liquidator of Owner or of all or a
                  substantial  part of its assets, file a voluntary  petition in
                  bankruptcy  or admit in writing its inability to pay its debts
                  as they come due, make a general assignment for the benefit of
                  creditors, file a petition or an answer seeking reorganization
                  or  arrangement  with creditors  or to take  advantage  of any
                  insolvency  law,  or  file  an  answer admitting  the material
                  allegations  of a petition  filed  against Owner in any
                  bankruptcy, reorganization or insolvency proceeding, or if an
                  order, judgment or decree shall be entered  by  any  court  of
                  competent  jurisdiction,  on the application  of a  creditor,
                  adjudicating  Owner a  bankrupt  or  insolvent  or approving a
                  petition seeking  reorganization  of Owner or appointing a
                  receiver, trustee or liquidator of Owner or of all or a
                  substantial  part of the assets of Owner, and such order,
                  judgment or decree shall continue unstayed and in effect for
                  any period of sixty (60) consecutive days;

        (e)       if  because of a default  under the Ground  Lease (if any) or
                  the  Mortgage,  the Ground Lease shall be terminated or the
                  Mortgage  shall be foreclosed (or the Hotel sold  in  lieu  of
                  foreclosure);

        (f)       if any event shall occur or state of facts found to exist,
                  with respect to the  ownership or  management  of the Hotel,
                  which in  Manager's  reasonable  opinion,  would  adversely
                  affect any gaming  license or application for  gaming  license
                  of Manager or its Affiliates  anywhere in the world or the
                  current  status of Manager or any of its  Affiliates  with any
                  gaming commission, board or similar governmental or regulatory
                  agency; or

        (h)       Owner shall be in default under the License  Agreement and
                  such default shall have continued after the  expiration of any
                  applicable grace period with respect thereto or the License
                  Agreement shall have been terminated.

        then  Manager  shall have the right to  terminate  this  Agreement  upon
        written notice to Owner given at any time following the occurrence of
        any such event, or if a  period  of  grace  is  provided, then following
        the  expiration  of the applicable period, and while such event shall be
        continuing,  and this Agreement shall  terminate upon the date specified
        therein,  which date shall be not less than thirty (30) days nor more
        than seventy-five (75) days after the date of the giving of such notice.




<PAGE>



8.03    Curing  Defaults.  Any  default  by Manager  under  clause (a) of
        Section  8.01 or Owner  under  clause (b) of Section  8.02,  as the case
        may be, which is susceptible of being cured, shall not constitute a
        basis of termination if the nature of such  default  shall not permit it
        to be cured within the grace period allotted,  provided that within such
        grace period either Manager or Owner shall have commenced to cure such
        default and shall proceed to complete the same with reasonable
        diligence.

8.04    Effect of Termination. The termination of this Agreement under the
        provisions  of this Article VIII shall not affect the rights of the
        terminating party with  respect to any damages it has  suffered as a
        result of any breach of this  Agreement,  nor shall it affect the rights
        of either party with respect to liability or claims accrued,  or arising
        out of events  occurring,  prior to the date of termination.

8.05    Remedies.  If this Agreement is terminated due to an event of default by
        Owner  arising under  Section  8.02(a) or (b) which  remains  uncured
        after any  applicable  cure  period,  Manager  shall be  entitled to all
        damages incurred by Manager as a result of such  default,  including
        damages resulting from early termination of the Agreement.  Neither the
        right of termination  nor the right to sue for  damages nor any other
        remedy  available  to either  party hereunder shall be exclusive  of any
        other remedy  given  hereunder or now or hereafter existing at law or in
        equity.

8.06    Indemnification  re Future  Business.  Owner shall indemnify and hold
        Manager  and its  Affiliates  harmless  from all  costs,  expenses,
        claims and liabilities, including reasonable attorneys' fees, arising or
        resulting from the failure of Owner, following the expiration or earlier
        termination (for whatever cause) of this  Agreement,  (i) to provide all
        of the  services  contracted  for within the scope and terms of this
        Agreement in connection with the business booked in the ordinary  course
        of business at any time prior to the date of such expiration or
        termination,  (ii) to honor and fulfill all  obligations of Owner under
        any contracts or leases entered into in the ordinary course of business
        by Manager as agent of Owner within the scope and terms of this
        Agreement prior to such expiration or termination, or (iii) to honor all
        purchase orders and to pay all  payables  arising  out of the  operation
        by Manager of the Hotel in the ordinary course of business in accordance
        with the provisions of this Agreement prior to such expiration or
        termination, or (iv) to pay all Compensation due to the employees of the
        Hotel or to make all  contributions  or otherwise  meet its obligations
        under or with respect to all  employee  benefit  plans as required under
        Subsections 4.05.2 or 4.05.6.

8.07    Preservation of Books and Records.  In the event of the expiration or
        earlier termination  of this  Agreement,  Owner shall preserve all books
        and records,  files and  correspondence  remaining at the Hotel in
        accordance  with Manager's  record  retention  guide  then in  effect
        after  the expiration or termination of this Agreement,  and Owner shall
        provide access to Manager, and its representatives, to such books,
        records,  correspondence and files at all reasonable times.

8.08    Extension Date of Termination. Notwithstanding any contrary provision of
        this Agreement, the date of termination of this Agreement, other than
        upon expiration pursuant to Article 2.01, shall be extended so that the
        date of termination after notice of termination is given to or by
        Manager shall be on a date which is not earlier than fifteen (15) days
        plus the number of days, if any, Manager is required to give its
        employees advance notice of termination of employment as required by the
        Worker Adjustment and Retraining Act, 29 U.S.C.,ss.2101 et. seq., as
        hereafter amended, or any similar federal or state statute.




<PAGE>




                                   ARTICLE IX

                                  TITLE MATTERS

9.01    Title to Hotel.  Owner covenants  that, as of the date hereof,  it has
        either  good and  marketable  fee title  to, or a valid and  subsisting
        leasehold estate in, the Land, and that, upon completion of construction
        of the Hotel,  it will continue to have good and marketable fee simple
        title or a valid  and  subsisting  leasehold  estate  in and to the
        Premises.  Owner further covenants that,  subject to the terms and
        conditions of this Article IX,  throughout  the term of this Agreement
        it shall maintain full ownership in such fee interest or leasehold
        estate in the Premises,  and good title to the FF&E and the Operating
        Equipment.

        9.02    Assignment by Manager.

                  9.02.1  Prohibited  Assignments.  Except  as  provided  in the
          following  Subsection 9.02.2,  Manager shall not assign this Agreement
          without the prior written consent of Owner. The disposition by Manager
          of  its  controlling  interest  in  any  Affiliate  to  which  it  has
          previously assigned this Agreement, shall be deemed to be a prohibited
          assignment  hereunder requiring the prior written consent of Owner. It
          is understood and agreed that any consent granted by Owner to any such
          assignment  shall  not be  deemed  a  waiver  of the  covenant  herein
          contained  against  assignment  in  any  subsequent  case.  Except  as
          otherwise  provided  in  Subsection  9.02.2,  no  assignment  of  this
          Agreement shall operate to release Manager from any of its obligations
          under this Agreement.

                  9.02.2 Permitted Assignments.  Manager, without the consent of
          Owner,  shall have the right to assign this Agreement to any Affiliate
          of Manager, or to any entity which may become an Affiliate as a result
          of a  related  and  substantially  concurrent  transaction,  or to any
          successor  or assign of  Manager  which may  result  from any  merger,
          consolidation or reorganization involving Manager, or to a corporation
          or other entity which shall  acquire all or  substantially  all of the
          business and assets of Manager.  Upon  execution of any  assignment as
          aforesaid under this Subsection  9.02.2, or with Owner's consent under
          Subsection 9.02.1,  notice thereof in the form of a duplicate original
          of  such  assignment  shall  be  delivered  to  Owner  forthwith,  and
          thereupon,  except in the case of an  assignment  to an  Affiliate  of
          Manager,  Manager  shall  be  released  of all of  its  covenants  and
          liabilities  hereunder,  other than liabilities accruing or based upon
          events  occurring  prior to the date of the delivery of such duplicate
          original  to Owner;  provided,  however,  that such  release  shall be
          contingent  upon the  concurrent  delivery to Owner of an  appropriate
          instrument whereby the assignee shall assume all of the obligations of
          Manager  hereunder,  and provided that such proposed  assignee has the
          ability to  perform  Manager's  obligations  hereunder  as  reasonably
          determined by Owner.

9.03     Sale, Lease or Assignment by Owner.

                  9.03.1 Prohibited  Transfers.  Owner agrees that,  without the
         consent of Manager, which shall not be reasonably withheld, it will not
         sell,  lease or  otherwise  transfer  or convey the Hotel,  or any part
         thereof,  or assign this Agreement,  except as provided in this Section
         9.03; such prohibition shall apply, without limitation, to any sale and
         leaseback transaction.



<PAGE>



                  9.03.2.  Permitted  Transfers.  If Owner shall have received a
         bona fide  written  offer to  purchase  or lease  the Hotel and  Owner,
         pursuant to the terms of such offer, desires to sell or lease the Hotel
         to any person,  firm or  corporation,  Owner shall give written  notice
         thereof  to  Manager,  stating  the  name  and  full  identity  of  the
         prospective  purchaser  or tenant,  as the case may be,  including  the
         names and  addresses  of the owners of the capital  stock,  partnership
         interests,  or other proprietary interests of such purchaser or tenant,
         the price or rental, and all terms and conditions of such proposed sale
         or lease,  together  with all other  information  with respect  thereto
         which is requested by Manager and reasonably available to Owner. Within
         thirty  (30) days after the date of receipt by Manager of such  written
         notice from Owner,  or if additional  information  is  requested,  then
         thirty (30) days after receipt by Manager of such information,  Manager
         shall  elect,  by  written  notice  to  Owner,  one  of  the  following
         alternatives:

                  (a) Subject to the provisions of Subsection  9.03.3 below,  to
         consent or withhold consent to such sale or lease and to the assignment
         of this  Agreement to such purchaser or tenant if such sale or lease is
         in fact consummated; provided that Manager expressly reserves the right
         to  disapprove  such sale,  lease or  assignment  if: (i) the  proposed
         transferee, or any of its Affiliates, is the owner of a trade name of a
         chain  of  hotels  which  competes  with  the  Other  Managed   Hotels,
         irrespective of the number of hotels comprising the competitive chain ;
         (ii) the  proposed  transferee  or any of its  Affiliates  is generally
         recognized  in the  community as being of ill repute or is in any other
         manner a person with whom a prudent  business  person would not wish to
         associate  in a  commercial  venture  or a person  that,  in  Manager's
         reasonable  determination,  would be  considered  by  regulators in the
         gaming  industry  in  any  jurisdiction  where  Manager  or  any of its
         Affiliates  holds  a  gaming  license  to  be  an  unsuitable  business
         associate  of  Manager  and  its  Affiliates;  or  (iii)  the  proposed
         transferee  does not have the  ability  to  fulfill  Owner's  financial
         obligations  hereunder;  or (iv) the proposed  transferee or any of its
         Affiliates maintained a prior unsatisfactory business relationship with
         Manager, or any of its Affiliates.

                  Manager  may,  at its sole  option,  subject  its  consent  to
         satisfaction of certain conditions,  including without limitation,  the
         following:  (i) the cure of any existing defaults or events which would
         become  defaults  with  the  giving  of  notice  and  passage  of time,
         including  without  limitation,  the  payment in full at the closing of
         such sale or lease,  and  assignment  (the  "Closing"),  of all  unpaid
         obligations  owed Manager and its  Affiliates  by Owner and/or  Owner's
         agreement to undertake  and complete  renovation  of all or part of the
         Hotel;  (ii)  receipt of  evidence  from the  purchaser  or tenant that
         insurance  coverage,  as required by Article V hereof, is in full force
         and effect on the Closing date;  and (iii) payment of the amount of any
         estimated  fees and  charges  which  will  accrue  to  Manager  and its
         Affiliates  through  the  date of  Closing,  which  amounts  cannot  be
         calculated in full prior to or at the Closing. To the fullest practical
         extent,  Owner shall give to Manager  sufficient  written notice of the
         date on and place at which such sale or lease is to be  consummated  in
         order to give Manager an  opportunity to prepare  appropriate  transfer
         documents and to be present at such time.

                  (b) To terminate  this  Agreement  (if,  and only if,  Manager
         shall not have  exercised  its rights  under  clause (a) above),  which
         notice of  termination  shall,  subject to Section 8.08,  fix a date of
         termination  thirty  (30) days  after the date of receipt by Manager of
         Owner's  original  thirty (30) day notice,  provided that Manager shall
         have the right to change such effective date of termination to coincide
         with the date of the  consummation of the proposed sale or lease;  said
         notice of  termination  shall not be effective if such sale or lease is
         not  consummated,  in which case this Agreement  shall continue in full
         force and effect.

         Manager  agrees  that upon the terms and  conditions  set forth in this
Subsection  9.03.2  it shall  elect  one of the  alternatives  set forth in this
Subsection  9.03.2. If Manager shall fail,  neglect or refuse to so exercise any
of said alternatives  within said sixty (60) day period,  the same shall be




<PAGE>



conclusively deemed to  constitute  an election  to consent under  clause (a) of
Subsection 9.03.2,  and the  provisions  thereof shall prevail as if Manager had
in writing consented pursuant thereto.

         9.03.3 Effect of Sale or Lease.  It is the intent of the parties hereto
that the Hotel shall at all times during the term of this  Agreement be operated
as one of the Other Managed  Hotels  pursuant to the terms hereof.  Accordingly,
notwithstanding  the provisions of Subsection  9.03.2 above, the Hotel shall not
be sold or leased unless (i) the purchaser or tenant,  as the case may be, shall
have first  delivered  to Manager an  executed  written  instrument,  reasonably
satisfactory  in form  and  substance  to  Manager  and its  counsel,  expressly
assuming  and  agreeing  to  perform  all of the  terms and  provisions  of this
Agreement, and (ii) such purchaser or tenant shall in all respects be acceptable
to, and approved by, Manager, which approval shall not be unreasonably withheld.
Upon any such sale or lease of the Hotel in  accordance  with the  provisions of
this Section 9.03,  subject to Owner's  election to terminate  this Agreement in
accordance  with Subsection  9.03.2,  all of the rights and obligations of Owner
hereunder  shall vest in the  purchaser  or tenant,  as the case may be, and all
such rights and  obligations of the seller or lessor shall  thereupon  terminate
(with the exception of any liabilities or obligations incurred prior to the date
of such sale or lease,  as to which the  seller  or lessor  shall  remain  fully
liable).  In the  event of any  failure  by  Owner  to  satisfy  any  terms  and
conditions of this Section 9.03,  consent to any sale,  lease or transfer of the
Hotel and/or  assignment of this Agreement  shall be deemed  withheld by Manager
and any  such  sale,  lease,  transfer  and/or  assignment  shall  be a  default
hereunder.  Manager and Owner  acknowledge that this Agreement is being executed
concurrently  with 16 other  agreements  for the  management  of hotels owned by
Owner and set forth on Exhibit V attached  hereto  (each an "Equity Inns Managed
Hotel" and, collectively,  the "Equity Inns Managed Hotels").  Manager and Owner
agree that, notwithstanding anything contained herein to the contrary, Owner may
dispose  of  certain  of the Equity  Inns  Managed  Hotels in a number  mutually
determined  by  Manager  and  Owner,  and  concurrent  with  such  dispositions,
terminate the  management  agreement  corresponding  to such Equity Inns Managed
Hotel without the payment of liquidated damages.


         9.03.4  Transfer of  Controlling  Interest in Owner.  The  voluntary or
involuntary  sale,  assignment,  transfer or other  disposition,  or transfer by
operation of law (other than by will or the laws of intestate  succession)  of a
controlling interest in Owner (i.e., the possession,  directly or indirectly, of
the power to direct or cause the  direction  of the  management  and policies of
Owner,  whether  through the  ownership of voting  securities  or by contract or
otherwise)  shall be deemed a sale or lease of the Hotel  within  the  foregoing
provisions  of  Subsection  9.03.2,  and shall be subject to the same  rights of
Manager as set forth in said Subsections 9.03.2 and 9.03.3,  with respect to the
sale or lease of the Hotel.  Owner  shall  provide  Manager  with its annual and
quarterly reports for the period immediately preceding the Operating Period, and
shall provide such annual and  quarterly  reports  thereafter  issued during the
Operating Period.

         9.04  Permitted Mortgages.

                  Owner  shall not grant any  mortgage,  deed of trust or trust,
deed pledge or  encumbrance  of or other  security  interest in the Hotel or any
part thereof or interest therein (a "Mortgage") other than a Permitted  Mortgage
(as  hereinafter  defined).  As used herein,  the holder of or trustee under any
such Mortgage,  and the holder of any indebtedness  secured thereby,  are herein
collectively  referred  to as the  "Mortgagee".  As used  herein,  a  "Permitted
Mortgage"  shall mean any  Mortgage  which is listed or described in Exhibit III
attached  hereto and  incorporated  by reference as a part hereof or which shall
hereafter  be  approved in advance  and in writing by Manager  such  approval of
Manager not to be unreasonably withheld;  provided, among other things, that the
(i) principal  amount of indebtedness  secured by such Mortgage as it relates to
the Hotel  (the  "Indebtedness")  when  aggregated  with all other  indebtedness
secured by the liens  against  the  Premises is not in excess of 75% of the then
appraised value of the Hotel and any other collateral  securing the Indebtedness
as  determined  by Mortgagee in  connection  with its  underwriting  of the loan
secured by such  Mortgage,  (ii) a copy of the Mortgage and other loan documents
shall be  delivered  to  Manager  upon  execution  thereof,  (iii)  the  related
financing is obtained  from an  Institutional  Lender (as  hereinafter  defined)
which  is  not  an  Affiliate  of  Owner,  and  (iv)  Mortgagee  enters  into  a
Subordination,   Attornment   and   Non-Disturbance   Agreement   with   Manager
substantially  in the form attached  hereto as Exhibit "IV." The foregoing shall
be  applicable  both to  original  financing  and to any  refinancing,  and this
Agreement shall in any and all events survive the foreclosure of any such




<PAGE>



Mortgage,  or the granting of a deed in lieu thereof,  and shall be binding upon
the purchaser at any such foreclosure, or the grantee of a deed in lieu thereof,
and  their  respective  successors  and  assigns,  except  any such  third-party
purchaser at foreclosure or any  third-party  grantee of a deed in lien which in
either case is unaffiliated with such lender.  The term  "Institutional  Lender"
shall mean a commercial  bank, a trust  company,  a savings  bank, a savings and
loan association,  an insurance company, a college or university, a pension fund
of a  corporation  whose  shares  are  listed  on a  recognized  national  stock
exchange,  or a real estate  investment trust whose shares are listed on such an
exchange,  in each case  having  assets of no less than  $500,000,000.00  (which
amount is based upon the purchasing  power of the United States dollar as of the
Commencement  Date and  shall  be  annually  increased,  if  necessary,  on each
anniversary of the  Commencement  Date to reflect an amount which shall have the
equivalent  purchasing  power to said  $500,000,000.00)  and which is  regularly
engaged in the business of making commercial loans.

         9.05     Amendments to Ground Lease.  Without the consent of Manager,
Owner shall not enter into any amendment or modification of the Ground Lease.

         9.06 Successors and Assigns.  Subject to the foregoing,  this Agreement
shall inure to the  benefit of and be binding  upon the  parties  hereto,  their
respective  heirs,  legal  representatives,  successors  and  assigns,  and with
respect to Owner, the phrase  "successors and assigns" shall include  purchasers
and lessees, or sublessees, of Owner's interest in the Premises.

                                    ARTICLE X

                             DAMAGE OR DESTRUCTION;

                                 EMINENT DOMAIN

         10.01  Damage  or  Destruction.  If the  Hotel  shall be  substantially
damaged by fire or other casualty,  or in the event that Mortgagee does not make
sufficient  proceeds of insurance  available to Owner to permit Owner to rebuild
and restore the Premises to a condition which permits the continued operation of
the Hotel by Manager as contemplated  by this Agreement,  then Owner, by written
notice to Manager  given  within  sixty (60) days after the  occurrence  of such
event,  shall have the right to terminate this Agreement on the basis that Owner
does not elect to rebuild or restore the Hotel, and neither party shall have any
further  obligation  to the  other  party  hereunder,  except  with  respect  to
liability accruing, or based upon events occurring,  prior to the effective date
of such termination.  For the purposes hereof, the Hotel shall be deemed to have
been  substantially  damaged if the estimated length of time required to restore
the  Hotel  substantially  to its  condition  and  character  just  prior to the
occurrence of such casualty shall be in excess of one hundred eighty (180) days,
as  indicated  by  an  architect's  certificate  or  other  evidence  reasonably
satisfactory  to Manager.  If this Agreement shall not terminate in the event of
damage  to the  Hotel,  either  because  (i)  the  damage  does  not  amount  to
substantial  damage as  described  above,  or (ii)  notwithstanding  substantial
damage to the Hotel,  Owner shall  elect to restore the Hotel,  then Owner shall
proceed with all due diligence to commence and complete the  restoration  of the
Hotel to its  condition  and  character  just  prior to the  occurrence  of such
casualty.

         10.02  Eminent  Domain.  If all of the  Premises,  or such  substantial
portion thereof as to make it infeasible, in the reasonable opinion of Owner, to
restore  and  continue  to  operate  the  remaining  portion  for  the  purposes
contemplated  hereby,  shall be taken through the  exercise,  or by agreement in
lieu of the exercise,  of the power of eminent  domain,  then upon the date that
Owner shall be required to surrender  possession of the  Premises,  or a portion
thereof, this Agreement shall terminate and neither party shall have any further
obligation  to the other party  hereunder,  except with  respect to  liabilities
accruing,  or based upon events  occurring,  prior to the effective date of such
termination. In the event a substantial portion of the Premises is taken, but




<PAGE>



Mortgagee fails or refuses to make available to Owner sufficient proceeds of
such eminent domain  proceedings in order  to  permit  Owner to make appropriate
alterations,  restorations  or repairs to the remainder of the Premises, so that
the Hotel would continue to be operable for the purposes herein  contemplated,
then Owner shall have the right to terminate this Agreement  upon written notice
to Manager and, upon the date that Owner shall be  required to  surrender
possession  of the  Premises to the condemning  authority, this Agreement  shall
terminate and neither party shall have any further obligation to the other party
hereunder, except with respect to liabilities  accruing,  or based upon events
occurring,  prior to the effective date of such termination.  If such  taking of
a portion of the Hotel  shall not make it infeasible,  in the reasonable opinion
of Owner, to restore and continue to operate the remaining  portion  thereof for
the purpose herein  contemplated, then this Agreement shall not terminate,  and
Owner shall proceed with all due diligence to repair any damage to the Hotel, or
to alter or modify the Hotel so as to render it a complete  architectural  unit
which can be operated as a hotel of substantially  the same type and class as
before. In any event, all proceeds from any taking shall belong solely to Owner,
and Manager shall not be entitled to any portion thereof.

                                   ARTICLE XI

                              INTELLECTUAL PROPERTY

         11.01 Intellectual Property.  Owner acknowledges that Manager or one of
its  Affiliates is or will become the owner or licensee of certain  intellectual
property  including its (i) software in use at one or more Other Managed  Hotels
and all source and object code versions  thereof and all related  documentation,
flow  charts,  user  manuals,  listing,  and  service/operator  manuals  and any
enhancements,  modifications or substitutions thereof ("Manager Software"),  and
(ii) trade secrets,  know-how and other proprietary  information relating to the
operating methods,  procedures and policies  distinctive to Other Managed Hotels
(herein collectively called "Intellectual Property").  Manager shall utilize the
Intellectual  Property  in  connection  with the  operation  of the Hotel to the
extent that it deems  appropriate for the purpose of carrying out its agreements
and  obligations  hereunder,  but such use shall be strictly on a  non-exclusive
basis,  and neither such use nor  anything  contained  in this  Agreement  shall
confer any proprietary license or other rights in the Intellectual Property upon
Owner or any third  parties,  provided  it is given  prompt  notice,  reasonable
assistance  and sole  authority  to defend or settle  the claim.  Manager  shall
indemnify,  defend and hold harmless  Owner from and against any and all claims,
costs, expenses, liabilities, charges and fees directly incurred by Owner to the
extent  arising  from any  copyright or patent  infringement  claim by any third
party  and  relating  to  the  use  by  Manager  of  the  Manager  Software  and
Intellectual Property.

                                   ARTICLE XII

                               GENERAL PROVISIONS

         12.01  Purchases from Manager and Manager's  Affiliates.  In purchasing
goods,  supplies,  equipment  and  services  for the Hotel,  including,  without
limitation, Operating Supplies, Operating Equipment, insurance and long distance
telephone  services,  Manager may  utilize  purchasing  procurement  services of
affiliates  of Manager  and/or other group  buying  techniques  involving  Other
Managed Hotels,  as well as other hotels operated by Manager and its Affiliates,
provided  that the cost thereof  shall be  competitive  with that which would be
charged by non-affiliated third party vendors in an arms-length transaction.  In
such  event,  such  affiliates  and/or  Manager (as the case may be) may mark up
their costs or receive and retain a fee or other  compensation  from vendors and
service  providers for their services in making the benefit of volume  purchases
available to the Hotel or negotiating and  implementing  the  arrangements  with
such vendors or providers,  provided that the total cost thereof (including such
mark-up,  fee or other  compensation  charged  or  retained  by  Manager  or its
affiliates) shall be competitive as aforesaid.





<PAGE>



         12.02 Budgets and Forecasts.  In preparing all budgets and forecasts to
be submitted to Owner hereunder,  including, without limitation, and the Capital
Renewals  Budgets under Section 4.02,  Manager shall base its estimates upon the
most recent and reliable  information  then  available,  taking into account the
location of the Hotel and its  experience in other  comparable  hotels.  Manager
reserves the right, and shall have the obligation, to update and revise any such
budgets and forecasts  from time to time during the periods  covered  thereby to
reflect variables and events not reasonably  within the control of Manager.  All
such updatings and revisions of the Capital Renewals Budget and the Forecast (to
the extent any such  changes in the  Forecast  indicate  shortfalls  which would
necessitate a need for additional working capital to be provided by Owner) shall
be submitted,  together  with  reasonable  explanations  of the reasons for such
charges, to Owner for its approval. Owner agrees that it shall promptly reply to
any such  submissions  giving its approval or stating the grounds on which it is
withholding its approval.

         12.03    Indemnities.

                  12.03.1  Indemnification to Manager. Owner shall indemnify and
         hold  Manager  harmless  from and against any and all  actions,  suits,
         claims, penalties,  losses, damages and expenses,  including reasonable
         attorneys' fees, based upon or arising out of Manager's  performance of
         its services hereunder,  or out of any occurrence or event happening in
         or about the Hotel or occurring  in  connection  with the  operation or
         development  thereof,  including any alleged breach,  or  investigation
         relating to a possible breach, of any Legal  Requirement  (collectively
         "Claims"),  except to the extent such  Claims are based upon  Manager's
         gross negligence,  willful misconduct, breach of contract or failure to
         act in good faith.

                  12.03.2  Indemnification To Owner. Manager shall indemnify and
         hold Owner harmless from and against any and all Claims which Owner may
         suffer,  sustain or incur arising from, or based upon  Manager's  gross
         negligence, willful misconduct, breach of contract or failure to act in
         good faith.

                  12.03.3  Intentionally Deleted.

                  12.03.4 Indemnified Parties. The indemnities contained in this
         Section  12.03 shall run to the  benefit of both  Manager and Owner and
         their  respective  Affiliates  and the  directors,  partners,  members,
         managers,  officers  and  employees  of  Manager  and  Owner  and their
         respective Affiliates.

                  12.03.5 Expenses Pending Determination. Pending the resolution
         of any question as to whether  Manager or any of its  Affiliates or any
         of its officers or employees are entitled to indemnification under this
         Section  12.03,  Manager  shall be  authorized  to pay  from the  Hotel
         Accounts all  expenses of defending or handling any matter  referred to
         in this Section 12.03,  provided that Manager will reimburse  Owner for
         all such expenses to the extent that it is ultimately  determined  that
         such entities or persons are not entitled to indemnification hereunder.

                  12.03.6  Survival.  The  provisions  of  Section  12.03  shall
         survive any  cancellation,  termination or expiration of this Agreement
         and  shall  remain  in full  force and  effect  until  such time as the
         applicable  statute of  limitation  shall cut off all demands,  claims,
         actions, damages, losses, liabilities or expenses which are the subject
         of the provisions of this Section 12.03.

         12.04   Arbitration of Financial Matters.

                  12.04.01  Matters to be Submitted to Arbitration.  In the case
of a dispute  with  respect to any of the  following  matters,  either party may
submit such matter to  arbitration  which shall be conducted by the  Accountants
(as hereinafter defined in Subsection 12.04.2):

                  (a)    computation of the Management Fee;

                  (b)    reimbursements due to Manager under the provisions of
                         Section 4.07;





<PAGE>



                  (c)    any adjustment in dollar amounts of insurance coverages
                         required to be maintained; and

                  (d)    any dispute concerning the approval of a Forecast or a
                         Capital Budget.

                  12.04.2 The Accountants. The "Accountants" shall be one of the
"Big  Five"  firms  of  certified  public  accountants  of  recognized  national
standing, i.e., Arthur Andersen LLP, PricewaterhouseCoopers, Ernst & Young, KPMG
Peat   Marwick,   and   Deloitte   and  Touche  (or  the   successors   thereto)
notwithstanding  any existing  relationships  which may exist  between Owner and
such accounting  firms or Manager and such accounting  firms. The party desiring
to submit any matter to  arbitration  under  Subsection  12.04.1  shall do so by
written notice to the other party,  which notice shall set forth the items to be
arbitrated and such party's choice of one of the five (5) accounting  firms. The
party receiving such notice shall within fifteen (15) days after receipt of such
notice either  approve such choice,  or designate one of the remaining  four (4)
firms by written  notice  back to the first  party,  and the first  party  shall
within fifteen (15) days after receipt of such notice either approve such choice
or  disapprove  the same,  and the same  procedure  shall be followed  until the
parties  approve  one of such  firms or there  is only  one  remaining  firm not
designated by either party. If both parties shall have approved one of the firms
under the preceding sentence,  then such firm shall be the "Accountants" for the
purposes of  arbitrating  the dispute;  if the parties are unable to agree on an
accounting  firm,  then the remaining  firm,  which was not designated by either
party,  shall be the  "Accountants"  for such purpose.  The Accountants shall be
required to render a decision in  accordance  with the  procedures  described in
Subsection  12.04.3  within  fifteen  (15) days after  being  notified  of their
selection.  The  fees  and  expenses  of the  Accountants  will  be  paid by the
non-prevailing party.

                  12.04.3 Procedures.  In all arbitration  proceedings submitted
to the Accountants,  the Accountants shall be required to agree upon and approve
the  substantive  position  advocated  by Owner or Manager  with respect to each
disputed item. Any decision  rendered by the  Accountants  that does not reflect
the  position  advocated  by  Owner or  Manager  shall be  beyond  the  scope of
authority  granted to the Accountants  and,  consequently,  may be overturned by
either  party.  All  proceedings  by  the  Accountants  shall  be  conducted  in
accordance with the Uniform Arbitration Act, except to the extent the provisions
of such act are  modified  by this  Agreement  or the  mutual  agreement  of the
parties. Unless otherwise agreed, all arbitration proceedings shall be conducted
at the Hotel.

         12.05 Sale of Securities. In the event Owner, or any person controlling
Owner (a "Controlling  Person") shall, at any time or from time to time, sell or
offer to  sell,  any  securities  issued  by Owner  through  the  medium  of any
prospectus or otherwise,  it shall do so only in compliance  with all applicable
federal and state  securities laws, and shall clearly disclose to all purchasers
and  offerees  that  (i)  neither  Manager  nor any of its  Affiliates  or their
respective officers,  directors,  agents or employees shall in any way be deemed
an issuer or underwriter of said securities,  and (ii) Manager or its Affiliates
and said  officers,  directors,  agents and employees have not assumed and shall
not have any liability  whatsoever arising out of or relating to the sale of, or
offer to sell, the said securities, including, but not limited to, any liability
or responsibility for any financial statements,  prospectuses or other financial
information   contained   in  any   prospectus   or  similar   written  or  oral
communication.  Manager  shall  have the right to  approve  any  description  of
Manager,  or any description of this Agreement or of Owner's  relationship  with
Manager  hereunder,  contained in any prospectus or similar  communication to be
delivered  in  connection  with the  sale or  offer by Owner or any  Controlling
Person of any  securities,  and shall  have the  further  right to  approve  any
changes in such  descriptions  prior to the delivery therefor to any prospective
purchaser;  any such descriptive  materials,  and any changes therein,  shall be
submitted to Manager at least thirty (30) days in advance of the proposed  usage
in  connection  with a sale or offer of  securities.  Owner agrees to indemnify,
defend  and hold  Manager  and its  Affiliates  and their  respective  officers,
directors,  agents  and  employees  free  and  harmless  of and from any and all
liabilities, costs, damages, claims or expenses, including reasonable attorneys'
fees, arising out of or related to the sale or offer of any securities of Owner,
except to the extent any claim related  thereto is based solely upon  misleading
financial or other  information  provided by Manager to Owner in connection with
the preparation of the  disclosures  described in and  contemplated  pursuant to
this Section  12.05.  All terms used in this  Section  12.05 shall have the same
meaning as in the Securities Act of 1933, as amended.

         12.06   License Agreement. The Hotel shall be operated by Manager under
the Hampton Inn name in accordance with the License Agreement.  Owner shall
comply with all the terms and conditions of the License Agreement (specifically
including, but not limited to, Licensee's obligation to pay any and all fees,
charges and contributions set forth in the License Agreement) and keep the




<PAGE>



License Agreement in full force and effect throughout the term of this
Agreement.  Nothing in this Agreement  shall be interpreted in a manner which
would either (i) relieve Owner of any of its obligations under the License
Agreement or (ii) prevent Owner from validly contesting provisions of the
License Agreement.

         12.07  No  Restriction.  Owner  agrees  that  Manager  and  any  of its
successors (by purchase, merger, acquisition or otherwise) have and shall retain
the right to own,  have an ownership  interest  in,  develop,  operate,  manage,
license,  franchise,  sell or rent other  hotels or inns of any kind,  or shared
ownership projects commonly known as vacation ownership or time-share  ownership
projects (or similar real estate  projects),  under the  "Manager" or other name
and  wherever  located  except on the Land under  this  Agreement,  and  nothing
contained in this Agreement shall prohibit or limit Manager from engaging in any
such activities,  which shall not give rise to any liability for claims relating
to unfair  competition  and/or breach of the implied  covenant of good faith and
fair dealing.

         12.08    Major Capital Improvements.

                  12.08.1  Major  Capital  Improvements.  Any program of capital
         improvements,  involving  an  addition  to the Hotel,  or  designed  to
         substantially  upgrade  or change  the nature or image of the Hotel (as
         opposed to a renovation  or  refurbishing  which takes place as part of
         the normal or cyclical  upkeep of the  Hotel),  shall be deemed to be a
         "Major  Capital   Improvement."  Major  Capital  Improvements  will  be
         undertaken only at the request of Owner,  whether on its own initiative
         or at the  suggestion of Manager,  and in any event shall be subject to
         the  approval  of  Manager,  and shall not be  included  in the Capital
         Renewals Budgets.

                  12.08.2 Development. As in the case of the initial development
         of the Hotel, the development of any Major Capital Improvement shall be
         the responsibility of Owner and shall be paid for out of separate funds
         of Owner and not out of Hotel Accounts. To the extent appropriate,  the
         provisions of Article III shall apply to any Major Capital  Improvement
         program.

                  12.08.3  Prohibition on Casinos. In no event shall a casino be
         added to the  Premises or built as a separate  structure on any portion
         of the Land; nor shall any casino or gaming  operations be conducted on
         the Premises.

         12.09  Manager  Programs,  etc.  The  programs,  systems and  equipment
utilized by Manager in connection  with the  operation of Other Managed  Hotels,
including those relating to security, life/safety,  health, communications,  and
information  management,  will from time to time be revised or upgraded  and new
programs,  systems and equipment will be developed.  Accordingly,  Manager, from
time to time, shall periodically publish its requirements and any specifications
with respect thereto by appropriate notice to each of the Managed Hotels.  Owner
agrees that the Hotel shall comply with such requirements and specifications.

         12.10  Notices.  Except as otherwise  provided in this  Agreement,  all
notices, demands, requests, consents, approvals and other communications (herein
collectively called "Notices")  required or permitted to be given hereunder,  or
which are to be given with respect to this  Agreement,  shall be in writing sent
by registered or certified  mail,  postage  prepaid,  return receipt  requested,
addressed to the party to be so notified as follows:

         If to Owner:
                           ENN Leasing Company I, L.L.C.
                           7700 Wolf River Boulevard
                           Germantown, TN 38138
                           Attn: Corporate Secretary
                           phone: (901) 754-7774
                           fax: (901) 754-2374

                           With copy to:





<PAGE>



                           Hunton & Williams
                           951 E. Byrd Street
                           Riverfront Plaza, East Tower
                           Richmond, VA 23219-4074
                           Attn: David C. Wright, Esq.
                           phone: (804) 788-8638
                           fax: (804) 788-8218

         If to Manager:

                           Promus Hotels, Inc.
                           c/o Hilton Hotels Corporation
                           9336 Civic Center Drive
                           Beverly Hills, California 90210
                           Attn: General Counsel
                           fax: (310) 205-8611

                           and

                           Hampton Inn Knoxville (Alcoa) - Airport
                           148 International Drive
                           Alcoa, Tennessee  37701
                           Attn: Jennifer Fritts
                           fax: (423) 984-0110

Any Notice shall be deemed delivered upon receipt.  Either party may at any time
change the addresses for Notices to such party by mailing a Notice as aforesaid.
Notices  may also be  delivered  by (i) hand,  (ii)  special  courier,  or (iii)
telegram,  telex or other  electronic  written  communication,  provided that in
utilizing  any form of delivery  authorized  by clause  (iii) of this  sentence,
receipt of such notice must be acknowledged by the addressee through appropriate
written communication.

         12.11      No Lease. Partnership or Joint Venture. Nothing contained in
this Agreement shall be construed to be or create a lease, partnership or joint
venture between Owner, its successors or assigns, on the one part, and Manager,
its successors and assigns, on the other part.

         12.12  Modification  and Changes.  This Agreement  cannot be changed or
modified except by another agreement in writing signed by the party sought to be
charged therewith, or by its duly authorized agent.

         12.13 Understandings and Agreements.  This Agreement constitutes all of
the  understandings and agreements of whatsoever nature or kind existing between
the parties with respect to Manager's  management of the Hotel. The parties each
hereby  acknowledge,  represent and agree that in entering into this  Agreement,
they are not relying  upon any  statement,  representation  or  promise,  or the
failure to make any statement, representation or promise, of any other party (or




<PAGE>



of any officer, agent, employee,  representative or attorney for any other
party), in executing this Agreement except as expressly stated herein.

         12.14 Headings. The Article,  Section and Subsection headings contained
herein are for  convenience  and reference  only and are not intended to define,
limit or describe the scope or intent of any provision of this Agreement.

         12.15  Consents.  Except as  specifically  otherwise  provided  in this
Agreement,  each party agrees that it will not unreasonably withhold any consent
or approval requested by the other party pursuant to the terms of the Agreement,
and that any such  consent  or  approval  shall not be  unreasonably  delayed or
qualified.  Similarly,  each party agrees that any  provision of this  Agreement
which  permits  such party to make  requests  of the other  party,  shall not be
construed to permit the making of unreasonable requests.

         12.16  Survival of Covenants.  Any covenant,  term or provision of this
Agreement which, in order to be effective,  must survive the termination of this
Agreement, shall survive any such termination.

         12.17 Third Parties.  None of the obligations hereunder of either party
shall  run to or be  enforceable  by any  party  other  than  the  party to this
Agreement or by a party deriving  rights  hereunder as a result of an assignment
permitted pursuant to the terms hereof.

         12.18 Waivers. No failure by Manager or Owner to insist upon the strict
performances of any covenant, agreement, term or condition of this Agreement, or
to  exercise  any right or remedy  consequent  upon the  breach  thereof,  shall
constitute  a  waiver  of any  such  breach  or any  subsequent  breach  of such
covenant,  agreement,  term  or  condition.  No  covenant,  agreement,  term  or
condition of this  Agreement and no breach  thereof shall be waived,  altered or
modified except by written  instrument.  No waiver of any breach shall affect or
alter this Agreement, but each and every covenant, agreement, term and condition
of this  Agreement  shall  continue in full force and effect with respect to any
other then existing or subsequent breach thereof.

         12.19 Partial Invalidity. Any provision of this Agreement prohibited by
law or by court  decree in any  locality  or state shall be  ineffective  to the
extent of such  prohibition  without in any way  invalidating  or affecting  the
remaining provisions of this Agreement, or without invalidating or affecting the
provisions  of  this  Agreement  within  the  states  or  localities  where  not
prohibited or otherwise  invalidated by law or by court decree.  Further, in the
event that any provision of this Agreement shall be held unenforceable by virtue
of its  scope,  but  may be  made  enforceable  by a  limitation  thereof,  such
provision  shall be deemed to be  amended to the  minimum  extent  necessary  to
render it enforceable under the laws of the jurisdiction in which enforcement is
sought.

         12.20          Applicable Law. This Agreement shall be construed and be
governed by the laws of the State in which the Premises are located.




<PAGE>



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

                                    OWNER:

                                    ENN LEASING COMPANY I, L.L.C.,
                                    a Delaware limited liability company



                                    By__________________________________
                                      Donald H. Dempsey
                                      Executive Vice President


                                    MANAGER:

                                    PROMUS HOTELS, INC.,
                                    a Delaware corporation



                                    By___________________________________
                                      Frederick G. Schultz
                                      Senior Vice President