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                                                                    EXHIBIT 10.2
COURTYARD
HPT5 PORTFOLIO

                              MANAGEMENT AGREEMENT

                                 by and between

                        COURTYARD MANAGEMENT CORPORATION

                                  as "MANAGER"

                                       and

                              HPT TRS MI-135, INC.

                                   as "TENANT"

                            Dated as of June 15, 2001

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<S>     <C>     <C>  <C>                                                                                         <C>

ARTICLE I             APPOINTMENT OF MANAGER

         1.01     APPOINTMENT.....................................................................................1
         1.02     MANAGEMENT OF THE HOTELS........................................................................2
         1.03     SERVICES PROVIDED BY MANAGER....................................................................5
         1.04     EMPLOYEES.......................................................................................6
         1.05     RIGHT TO INSPECT................................................................................6
         1.06     Right of Offset.................................................................................7
         1.07     Condition of the Hotels.........................................................................7

ARTICLE II            TERM

         2.01     TERM............................................................................................8

ARTICLE III           COMPENSATION OF MANAGER

         3.01     MANAGEMENT FEES.................................................................................9
         3.02     OPERATING PROFIT...............................................................................10

ARTICLE IV            ACCOUNTING, BOOKKEEPING AND BANK ACCOUNTS

         4.01     ACCOUNTING, INTERIM PAYMENT AND ANNUAL RECONCILIATION..........................................11
         4.02     BOOKS AND RECORDS..............................................................................15
         4.03     ACCOUNTS, EXPENDITURES.........................................................................16
         4.04     ANNUAL OPERATING PROJECTION....................................................................18
         4.05     WORKING CAPITAL................................................................................18
         4.06     FIXED ASSET SUPPLIES...........................................................................19

ARTICLE V             REPAIRS, MAINTENANCE AND REPLACEMENTS

         5.01     MANAGER'S MAINTENANCE OBLIGATION...............................................................19
         5.02     REPAIRS AND MAINTENANCE TO BE PAID FROM GROSS REVENUES.........................................20
         5.03     ITEMS TO BE PAID FROM RESERVES.................................................................20
         5.04     RESERVE ESTIMATES..............................................................................22
         5.05     ADDITIONAL REQUIREMENTS FOR RESERVE............................................................22
         5.06     OWNERSHIP OF REPLACEMENTS......................................................................23
         5.07     OBLIGATION TO PROVIDE ADDITIONAL RESERVE FUNDS.................................................23
         5.08     ADDITIONAL REQUIREMENTS RELATING TO CERTAIN CAPITAL IMPROVEMENTS...............................24
         5.09     SPECIAL PROVISION RE: HOTEL IN EMERYVILLE, CALIFORNIA..........................................25

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<S>     <C>     <C>  <C>                                                                                         <C>
ARTICLE VI            INSURANCE, DAMAGE, CONDEMNATION, AND FORCE MAJEURE

         6.01     INSURANCE......................................................................................26
         6.02     DAMAGE AND REPAIR..............................................................................30
         6.03     DAMAGE NEAR END OF TERM........................................................................33
         6.04     TENANT'S OPTION TO OBTAIN CERTAIN INSURANCE....................................................33
         6.05     CONDEMNATION...................................................................................34
         6.06     PARTIAL CONDEMNATION...........................................................................34
         6.07     DISBURSEMENT OF AWARD..........................................................................35
         6.08     TEMPORARY CONDEMNATION.........................................................................36
         6.09     ALLOCATION OF AWARD............................................................................36
         6.10     EFFECT OF CONDEMNATION.........................................................................36

ARTICLE VII           TAXES; other charges

         7.01     REAL ESTATE AND PERSONAL PROPERTY TAXES........................................................36

ARTICLE VIII          OWNERSHIP OF THE HOTELS

         8.01     OWNERSHIP OF THE HOTELS........................................................................38
         8.02     NO COVENANTS, CONDITIONS OR RESTRICTIONS.......................................................39
         8.03     LIENS; CREDIT..................................................................................40

ARTICLE IX            DEFAULTS

         9.01     MANAGER EVENTS OF DEFAULT......................................................................40
         9.02     REMEDIES FOR MANAGER DEFAULTS..................................................................42
         9.03     ADDITIONAL REMEDIES FOR MANAGER RECOURSE DEFAULTS..............................................44
         9.04     NON-RECOURSE PROVISION.........................................................................44
         9.05     Good FAITH DISPUTE By MANAGER..................................................................45
         9.06     TENANT EVENTS of DEFAULT.......................................................................45
         9.07     REMEDIES FOR TENANT DefAults...................................................................47
         9.08     GOOD FaiTh DispUte BY TeNant...................................................................47
         9.09     LANDLORD DEFAULTS..............................................................................48

ARTICLE X             ASSIGNMENT AND SALE

         10.01    ASSIGNMENT.....................................................................................48
         10.02    SALE OF THE HOTEL..............................................................................50

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ARTICLE XI            MISCELLANEOUS

         11.01    RIGHT TO MAKE AGREEMENT........................................................................51
         11.02    ACTIONS BY MANAGER.............................................................................51
         11.03    RELATIONSHIP...................................................................................51
         11.04    APPLICABLE LAW.................................................................................52
         11.05    RECORDATION....................................................................................52
         11.06    HEADINGS.......................................................................................52
         11.07    NOTICES........................................................................................52
         11.08    ENVIRONMENTAL MATTERS..........................................................................53
         11.09    CONFIDENTIALITY................................................................................55
         11.10    PROJECTIONS....................................................................................55
         11.11    ACTIONS TO BE TAKEN UPON TERMINATION...........................................................55
         11.12    TRADEMARKS, TRADE NAMES AND SERVICE MARKS......................................................58
         11.13    WAIVER.........................................................................................58
         11.14    PARTIAL INVALIDITY.............................................................................59
         11.15    SURVIVAL.......................................................................................59
         11.16    NEGOTIATION OF AGREEMENT.......................................................................59
         11.17    INTENTIONALLY DELETED..........................................................................59
         11.18    ENTIRE AGREEMENT...............................................................................59
         11.19    AFFILIATES.....................................................................................59
         11.20    COMPETING FACILITIES...........................................................................60
         11.21    TRADE AREA RESTRICTION.........................................................................60
         11.22    ARBITRATION....................................................................................61
         11.23    PERMITTED CONTESTS.............................................................................61
         11.24    ESTOPPEL CERTIFICATES..........................................................................62
         11.25    INDEMNIFICATION................................................................................62
         11.26    PROHIBITED TRANSACTIONS........................................................................63
         11.27    REMEDIES CUMULATIVE............................................................................63
         11.28    AMENDMENTS AND MODIFICATIONS...................................................................63
         11.29    CONSTRUCTION; NONRECOURSE......................................................................63
         11.30    COUNTERPARTS; HEADINGS.........................................................................64
         11.31    NO POLITICAL CONTRIBUTIONS.....................................................................64
         11.32    SINGLE AGREEMENT...............................................................................64
         11.33    REIT QUALIFICATION.............................................................................64
         11.34    FURTHER COMPLIANCE WITH SECTION 856(D) OF THE CODE.............................................64
         11.35    ADVERSE REGULATORY EVENT.......................................................................65
         11.36    COMMERCIAL LEASES..............................................................................66
         11.37    WAIVER OF JURY TRIAL...........................................................................66

ARTICLE XII           DEFINITION OF TERMS

         12.01    DEFINITION OF TERMS............................................................................66

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Exhibit A                     The Sites
Exhibit B and B-1             Trade Area
Exhibit C                     Existing Leases
Addendum                 Property Information

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         THIS MANAGEMENT AGREEMENT (this "Agreement") is executed as of the 15th
day of June 2001, by HPT TRS MI-135, INC.  ("Tenant"),  a Delaware  corporation,
with a mailing address at c/o Hospitality  Properties  Trust, 400 Centre Street,
Newton, Massachusetts 02458; and COURTYARD MANAGEMENT CORPORATION ("Manager"), a
Delaware  corporation,  with a mailing  address at c/o  Marriott  International,
Inc., 10400 Fernwood Road, Bethesda, Maryland 20817.

                                R E C I T A L S:

         A. HPTMI  Properties  Trust,  a Maryland real estate  investment  trust
("Landlord")  is the owner of fee title to the  parcels  of real  property  (the
"Sites")  described  on Exhibit A attached to this  Agreement  and  incorporated
herein on which  certain  improvements  have been  constructed  consisting  of a
building or buildings  containing  in each instance the number of Guest Rooms as
specified  on the Addenda  hereto (as the same shall be amended and revised from
time  to  time),  and  certain  other  amenities  and  related  facilities  (the
"Buildings").  Each Site and the  Buildings  on each such Site,  in  addition to
certain other rights,  improvements,  and personal property as more particularly
described in Section 12.01 hereof, are individually referred to as a "Hotel" and
are collectively  referred to as the "Hotels." Pursuant to the Leases,  Landlord
has leased the Hotels (except for certain  assets of Tenant or Manager  included
within the definition of Hotels) which are subject to this Agreement to Tenant.

         B.  Tenant  desires to engage  Manager to manage and operate the Hotels
for the account of Tenant,  and Manager  desires to accept such  engagement upon
the terms and conditions set forth in this Agreement.

         C.  Pursuant  to the  Leases,  Tenant has leased or shall  lease  other
hotels from  Landlord or an Affiliate of Landlord to be managed by Affiliates of
Manager,  as and  when  such  properties  are made  subject  to the  Lease  (all
properties  subject  to the  Leases  at any  given  time are  collectively,  the
"Portfolio Properties").  Manager and Tenant have agreed that revenues,  working
capital,  reserves and other items from the Portfolio Properties will be pooled,
disbursed and  distributed  in accordance  with the terms and  conditions of the
Pooling Agreement.

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

                                    ARTICLE I

                             APPOINTMENT OF MANAGER

         1.01 Appointment.  Subject to the provisions of this Agreement,  Tenant
hereby  appoints  and  employs  Manager to  supervise,  direct and  control  the
management,
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promotion and operation of the Hotels throughout the Term.  Manager accepts said
appointment  and agrees to manage the Hotels during the Term in accordance  with
the terms and conditions of this Agreement.  The Hotels shall each be known as a
Courtyard by Marriott, or Marriott Courtyard with such additional identification
as may be  necessary  to  provide  local  identification.  If  the  name  of the
Courtyard  by Marriott  System is changed,  Manager  will change the name of the
Hotels to conform thereto. All capitalized terms shall have the meaning ascribed
to them in Article XII hereof.

         1.02     Management of the Hotels.

         A.  Manager  shall  manage and operate the Hotels in an  efficient  and
economical  manner  consistent with standards  prevailing in other hotels in the
System, including all activities in connection therewith which are customary and
usual to such an operation  (all of the foregoing,  the "Operating  Standards").
Manager shall,  in connection  with the Hotels and in accordance with the System
Standards, the Operating Standards and the terms of this Agreement, perform each
of the following  functions (provided that in all cases, except as otherwise set
forth in this  Agreement,  the costs and expenses of performing  such  functions
shall be Deductions):

              1.  Recruit,  employ,  supervise,  direct  and (when  appropriate)
discharge all of the employees at the Hotels.

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

              3. 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.

              4. Manage  expenditures  to replenish  Inventories and Fixed Asset
Supplies, make payments on accounts payable and collect accounts receivable.

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

              6. Procure all Inventories and replacement Fixed Asset Supplies.

              7. Prepare and deliver interim  accountings,  annual  accountings,
Annual Operating Projections,  Reserve Estimates,  and such other information as
is required by this Agreement.

              8. Plan,  execute and supervise repairs,  maintenance  alterations
and improvements at the Hotels.

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              9.  Provide,  or cause to be provided,  risk  management  services
relating  to the types of  insurance  required  to be  obtained  or  provided by
Manager under this Agreement.

              10.  Obtain and keep in full force and  effect,  either in its own
name or in Tenant's  name,  as may be required by  applicable  law,  any and all
licenses and permits to the extent same is within the control of Manager (or, if
same is not within the control of Manager,  Manager  shall use all due diligence
and reasonable efforts to obtain and keep same in full force and effect).

              11.  Reasonably  cooperate  (provided  that  Manager  shall not be
obligated to enter into any amendments of this Agreement) in any attempt(s):

                  (a) to  effectuate  a Sale of a Hotel  under the terms of this
Agreement  (provided  that nothing herein shall affect the provisions of Section
10.02); or

                  (b)  to   effectuate  a  direct  or  indirect  sale  or  other
disposition of the Landlord's  interest in a Hotel as permitted  under the Owner
Agreement; or

                  (c) to obtain any Qualifying Mortgage.

              12. Subject to the requirements of Section 10.01 hereof, negotiate
and administer, on behalf of Tenant, leases, subleases,  licenses and concession
agreements  for all public  space at the Hotels,  including  all stores,  office
space and lobby space.

              13. On behalf of  Tenant,  negotiate,  enter  into and  administer
service  contracts  and  licenses  for the  operation  of the Hotels,  including
contracts and licenses for health and safety systems  maintenance,  electricity,
gas,  telephone,  cleaning,  elevator and boiler  maintenance,  air conditioning
maintenance,  laundry  and  dry  cleaning,  master  television  service,  use of
copyrighted  materials  (such as music  and  videos),  entertainment  and  other
services as Manager deems advisable.

              14. Negotiate,  enter into and administer contracts for the use of
banquet and meeting facilities and guest rooms by groups and individuals.

              15. Take  reasonable  action to collect and  institute  in its own
name or in the name of Tenant or a Hotel,  in each  instance  as  Manager in its
reasonable discretion deems appropriate, legal actions or proceedings to collect
charges,  rent or other income  derived  from the  operation of the Hotels or to
oust or  dispossess  guests,  tenants,  members or other  persons in  possession
therefrom,  or to cancel or terminate any lease, license or concession agreement
for the  breach  thereof  or  default  thereunder  by the  tenant,  licensee  or
concessionaire.

              16.  Make  representatives  available  to consult  with and advise
Tenant or Tenant's designee at Tenant's  reasonable request concerning  policies
and procedures affecting the conduct of the business of the Hotels.

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              17.  Collect  on  behalf of Tenant  and  account  for and remit to
governmental  authorities all applicable excise, sales,  occupancy and use taxes
or similar  governmental  charges  collected by or at the Hotels  directly  from
guests,  members or other  patrons,  or as part of the sales price of any goods,
services or displays, such as gross receipts, admission or similar or equivalent
taxes, duties, levies or charges.

              18. Keep Tenant  advised of  significant  events  which occur with
respect to the Hotel  which  might  reasonably  be  expected  to have a material
adverse effect on the financial performance or value of the Hotel.

              19.  Perform  such other  tasks  with  respect to the Hotel as are
customary and consistent with the Operating Standards and the System Standards.

         B. The operation of the Hotels shall be under the exclusive supervision
and control of Manager which, except as otherwise  specifically provided in this
Agreement,  shall be responsible  for the proper and efficient  operation of the
Hotels.  Subject to the terms of this  Agreement,  Manager shall have discretion
and control, free from interference, interruption or disturbance, in all matters
relating  to  management  and  operation  of  the  Hotels,  including,   without
limitation, the following:  charges for Guest Rooms and commercial space; credit
policies; food and beverage services;  employment policies;  granting of leases,
subleases,  licenses and  concessions  for shops and agencies  within the Hotels
consistent  with the  provisions of Section 10.01 hereof;  receipt,  holding and
disbursement of funds; maintenance of bank accounts;  procurement of Inventories
(including initial inventories), supplies and services; promotion and publicity;
payment of costs and expenses as are specifically provided for in this Agreement
or are otherwise  reasonably necessary for the proper and efficient operation of
the Hotels;  and,  generally,  all  activities  necessary  for  operation of the
Hotels.

         C. Manager shall use reasonable efforts to comply with and abide by all
Legal Requirements and Insurance Requirements pertaining to its operation of the
Hotels,  provided that Manager shall have the right, but not the obligation,  in
its reasonable discretion, to contest or oppose, by appropriate proceedings, any
such laws and  regulations  in accordance  with Section 11.23 hereof.  Except as
expressly provided to the contrary in this Agreement,  all costs and expenses of
such  compliance with respect to each Hotel shall be paid from Gross Revenues as
Deductions  in the  computation  of  Operating  Profit of such Hotel or from the
Reserve of such Hotel,  whichever is applicable,  and the reasonable expenses of
any such contest shall be paid from Gross Revenues as Deductions with respect to
such Hotel.

         D. Manager shall use due diligence and exercise commercially reasonable
efforts to obtain and  maintain all  approvals  necessary to use and operate the
Hotels in accordance with the System  Standards,  Operating  Standards and Legal
Requirements.  Tenant  shall  cooperate  with  Manager in this  regard  and,  in
connection therewith, shall execute all applications and consents required to be
executed by Tenant in order for Manager to obtain and maintain  such  approvals.
All costs  incurred by Tenant in this regard shall be included in Deductions for
the applicable Hotel.

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         E. Manager shall not use, and shall  exercise  commercially  reasonable
efforts to prevent the use of, the Hotels and Manager's  personal  property used
in connection with the Hotels, if any, for any unlawful  purpose.  Manager shall
not  commit,  and shall use  commercially  reasonable  efforts  to  prevent  the
commission,  of any waste at the Hotels.  Manager  shall not use,  and shall use
commercially  reasonable  efforts  to  prevent  the use of, the Hotels in such a
manner as will constitute an unlawful nuisance thereon or therein. Manager shall
use commercially  reasonable  efforts to prevent the use of the Hotels in such a
manner as might  reasonably be expected to impair  Tenant's or Landlord's  title
thereto or any portion thereof or might  reasonably be expected to give rise for
a claim or claims for adverse use or adverse  possession by the public, as such,
or of implied dedication of the Hotels or any portion thereof.

         F.  Manager  shall,  to  the  extent  within  Manager's  control,   use
commercially  reasonable  efforts to cause Tenant to be in  compliance  with the
Lease for each Hotel,  and the costs of the same shall be paid as Deductions for
the applicable Hotel hereunder except as otherwise  specifically provided for in
this Agreement.

         1.03 Services  Provided by Manager.  Commencing  on the Effective  Date
with respect to each Hotel and thereafter  during the Term,  Manager shall cause
to be furnished the following services:

         A.  System  divisional  executive   management,   divisional  financial
planning,  divisional contracting,  divisional product planning and development,
divisional  human  resources  planning  and  development,  divisional  marketing
planning,  and services of Manager's  technical and  operational  experts making
periodic  inspection  and  consultation  visits to the Hotels (but  specifically
excluding  "line  management"  personnel  such as area  managers and services of
Manager's   architecture   and   construction   personnel  who  provide  design,
procurement,   construction   or  related   services)   (collectively,   "System
Services");

         B. Marriott corporate planning and policy services,  Marriott financial
planning  and  corporate  financial   services,   Marriott  corporate  executive
management,  in-house legal  services,  and  protection of the "Marriott"  trade
name, logos, trademarks and service marks ("Central Office Services"); and

         C.  Certain  services  which are  furnished  generally  on a central or
regional  basis to other  hotels in the System  which are  managed  by  Manager,
Marriott, or any Affiliate, and which benefit each Hotel as a participant in the
System as follows:  (i) national  sales  office  services;  central  operational
support for rooms, food and beverage and engineering; central training services;
career development;  management  personnel  relocation;  central safety and loss
prevention  services;  central  advertising and promotion  (including direct and
image media and advertising administration);  consumer affairs to the extent not
charged or  allocated  directly  to a Hotel as a  Deduction;  the  national  and
regional  reservations  system  service and  inventory  and  revenue  management
services;   centralized  payroll  and  accounting   services;   computer  system
development,  support and operating  costs;  central  monitoring  and management
support from "line  management"  personnel such as area managers;  and (ii) such
additional  central or  regional  services  as are or may be, from time to time,
furnished  for the  benefit  of hotels  in the  System  or in

                                      -5-
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substitution  for services now performed at individual  hotels which may be more
efficiently  performed  on a group basis (the items set forth in (i) and (ii) of
this sentence,  collectively,  "Chain Services"). Other than the charges for the
national and regional  reservation  system  services,  the charges for the Chain
Services  which are listed in clause (i) above shall be included in each Hotel's
Base  Management  Fee; the charges for the  national  and  regional  reservation
system  services  shall be paid from each Hotel's Gross  Revenues as Deductions.
Such charges shall be allocated to the Hotels in a manner  consistent with other
hotels in the System.

         1.04     Employees.

         A. All  personnel  employed  at the  Hotels  shall at all  times be the
employees of Manager. Subject to the terms of this Agreement, Manager shall have
absolute  discretion  with  respect to all  personnel  employed  at the  Hotels,
including,   without   limitation,   decisions   regarding  hiring,   promoting,
transferring, compensating, supervising, terminating, directing and training all
employees  at the Hotels,  and,  generally,  establishing  and  maintaining  all
policies  relating  to  employment;  provided  however  that  Manager  shall use
commercially reasonable efforts to comply with all Legal Requirements pertaining
thereto and not enter into any  written  employment  agreements  with any person
which purport to bind the Tenant and/or purport to be effective  regardless of a
Termination,  without obtaining Tenant's consent,  which consent may be withheld
in Tenant's  sole and absolute  discretion.  Manager shall comply with all Legal
Requirements  regarding  labor  relations;  if either Manager or Tenant shall be
required,  pursuant to any such Legal Requirement, to recognize a labor union or
to enter into a collective  bargaining with a labor union, the party so required
shall  promptly  notify the other party  pursuant to this Section 1.04.  Manager
shall  indemnify  Landlord  and  Tenant  for all costs and  expenses  (including
reasonable  attorneys'  fees)  incurred  by either of them if either of them are
joined in or made party to any suit or cause of action alleging that Manager has
failed to comply with all Legal  Requirements  pertaining  to the  employment of
Manager's  employees at one or more of the Hotels,  the costs of which shall not
be a Deduction.

         B. Manager shall decide  which,  if any, of the employees of the Hotels
shall reside at the Hotels  (provided  that  Tenant's  prior  approval  shall be
obtained if more than two (2) such employees and their immediate families reside
at any  Hotel),  and shall be  permitted  to  provide  free  accommodations  and
amenities to its employees and representatives  living at or visiting the Hotels
in connection  with its  management or operation.  No person shall  otherwise be
given  gratuitous  accommodations  or services  without prior joint  approval of
Tenant and Manager  except in accordance  with usual  practices of the hotel and
travel industry.

         C. Manager  shall  identify,  appoint,  assign,  instruct and supervise
employees in  connection  with the  operation of the Hotels which  Manager deems
necessary or advisable for the operation of the Hotels.

         1.05 Right to Inspect.  Manager  shall  permit  Landlord and Tenant and
their respective authorized representatives to inspect or show the Hotels during
usual  business

                                      -6-
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hours upon not less than twenty-four (24) hours' notice and to make such repairs
as Landlord is permitted or required to make pursuant to the terms of the Lease,
provided that any inspection or repair by Landlord or its representatives  shall
not unreasonably  interfere with the use and operation of the Hotels and further
provided  that in the event of an  emergency  as  determined  by Landlord in its
reasonable discretion, prior notice shall not be required.

         1.06 Right of Offset.  Manager  acknowledges that it shall not have, in
any instance,  a right of offset  against  Tenant's  First  Priority or Tenant's
Third  Priority  with respect to any Hotel under any  circumstances  (or against
Aggregate  Tenant's  First  Priority or Aggregate  Tenant's  Third Priority with
respect to Hotels for which the Pooling  Agreement is in effect).  Manager shall
have the right to offset against amounts due to Tenant with respect to any Hotel
pursuant to Section 3.02.B hereof (and against amounts due to Tenant pursuant to
Section  2.02.A of the Pooling  Agreement  with  respect to Hotels for which the
Pooling  Agreement  is in effect),  but in all events  excluding  amounts due to
Tenant as Tenant's First Priority,  Tenant's Third Priority,  Aggregate Tenant's
First Priority or Aggregate Tenant's Third Priority,  amounts (i) which Landlord
or Tenant fail to advance to the Reserve for such Hotel which  either of them is
required to make as provided for herein or in the Lease or Owner  Agreement  (in
each instance as determined by Arbitration,  if applicable), or (ii) due under a
final  judgement  against Tenant obtained by Manager with respect to such Hotel,
or (iii) which Tenant  fails to pay to Manager in violation of Section  4.01.D.2
of this  Agreement  with  respect to such Hotel.  Except as  expressly  provided
above,  Manager shall not offset against the amounts owed to Tenant hereunder or
under the Pooling Agreement.

         1.07  Condition of the Hotels.  Subject to the  provisions of Article V
hereof with  respect to Reserves  (and any  provision  in  connection  therewith
contained in the Owner Agreement),  Manager acknowledges receipt and delivery of
possession  of  each  Hotel,  and  Manager  accepts  each  Hotel  in its "as is"
condition  as of the  Effective  Date for such  Hotel,  subject to the rights of
parties in possession, the existing title, including all covenants,  conditions,
restrictions,  reservations,  mineral  leases,  easements  and other  matters of
record or that are  visible or  apparent on the  Hotels,  all  applicable  Legal
Requirements,  the lien of any  financing  instruments,  mortgages  and deeds of
trust  existing  prior to the Effective Date for such Hotel and permitted by the
terms of this  Agreement,  and such other matters which would be disclosed by an
inspection of the Hotels and the record title  thereto or by an accurate  survey
thereof.  MANAGER  REPRESENTS  THAT IT HAS  INSPECTED  THE HOTELS AND ALL OF THE
FOREGOING AND HAS FOUND THE CONDITION THEREOF SATISFACTORY AND IS NOT RELYING ON
ANY  REPRESENTATION  OR WARRANTY OF TENANT,  LANDLORD OR ANY OF THEIR  AGENTS OR
EMPLOYEES  WITH RESPECT  THERETO,  EXCEPT AS  EXPRESSLY  SET FORTH  HEREIN,  AND
MANAGER WAIVES ANY CLAIM OR ACTION AGAINST TENANT AND LANDLORD IN RESPECT OF THE
CONDITION  OF THE  HOTELS.  EXCEPT AS  EXPRESSLY  SET FORTH  HEREIN,  TENANT AND
LANDLORD MAKE NO WARRANTY OR REPRESENTATION,  EXPRESS OR IMPLIED,  IN RESPECT OF
THE HOTELS OR ANY PART  THEREOF,  EITHER AS TO ITS  FITNESS  FOR USE,  DESIGN OR
CONDITION FOR ANY PARTICULAR  USE OR PURPOSE OR

                                      -7-
<PAGE>

OTHERWISE,  AS TO THE QUALITY OF THE MATERIAL OR WORKMANSHIP THEREIN,  LATENT OR
PATENT. To the maximum extent permitted by law,  however,  Tenant hereby assigns
to Manager all of Tenant's  rights to proceed  against any predecessor in title,
contractors and materialmen for breaches of warranties or representations or for
latent defects in the Hotels.  Tenant shall fully  cooperate with Manager in the
prosecution of any such claims, in Tenant's or Manager's name, the cost of which
shall  be a  Deduction  for  the  applicable  Hotel  hereunder.  Notwithstanding
anything to the contrary in this  Section  1.07,  no  provision  hereof shall be
deemed to affect Manager's right to use or call for additional deposits into the
Reserve for any Hotel as provided for herein or in the Owner Agreement or in the
Lease.

                                   ARTICLE II

                                      TERM

         2.01     Term.

         A. The Term of this  Agreement  shall  be,  for  each  Hotel,  from the
Effective  Date for each  Hotel as set forth on the  applicable  Addendum  or as
otherwise provided for in the Agreement to Lease (and which will be added to the
Addenda as applicable) to the expiration or earlier  termination of the "Initial
Term" and, if  exercised  in  accordance  with the terms  hereof,  the  "Renewal
Term(s)." The Initial Term for each Hotel shall begin on the Effective  Date for
such Hotel as set forth in the preceding sentence, and, unless sooner terminated
as provided in this  Agreement,  shall continue until the last day of the Fiscal
Year ending  closest to December 31, 2019.  Provided that (1) the Tenant's First
Priority  Coverage  Ratio is at least 1.1 in the third to last  Fiscal  Year (a)
prior to the end of the Initial  Term (as a condition  of  exercising  the first
Renewal Term) and (b) prior to the end of the first Renewal Term (as a condition
of exercising  the second Renewal  Term),  (2) Manager and its  Affiliates  have
renewed all of the Other  Management  Agreements  for the first  Renewal Term or
second  Renewal Term, as applicable in accordance  with their terms,  (3) all of
the Franchise  Agreements shall have been extended for the First Renewal Term or
the Second  Renewal  Term,  as  applicable,  and (4) there exists at the time of
renewal no Manager  Event of Default  under this  Agreement  or any of the Other
Management  Agreements  beyond the expiration of any applicable  notice and cure
period and for which  Tenant  has,  at such time,  the right to  terminate  this
Agreement,  the Term shall thereafter  automatically be extended for each of two
(2)  successive  periods of fifteen (15) Fiscal Years  (each,  a Renewal  Term),
unless Manager gives Tenant and Landlord  written  notice of Manager's  decision
not to extend on or before the date which is  twenty-four  (24) months  prior to
the date of the  expiration  of the Initial  Term or first  Renewal Term (as the
case may be), time being of the essence.

         B.  Each  Renewal  Term  shall  commence  on  the  day  succeeding  the
expiration  of the Initial Term or the  preceding  Renewal Term, as the case may
be. All of the terms,  covenants and provisions of this Agreement shall apply to
each such Renewal  Term,  except that the Term shall not be extended  beyond the
last day of the Fiscal Year  ending  closest to December  31,  2049.  If Manager
shall give notice that it elects not to extend the term in accordance  with this
Section 2.01,  this Agreement  shall  automatically  terminate

                                      -8-
<PAGE>

at the end of the Term then in effect and Manager  shall have no further  option
to extend the Term of this Agreement. Otherwise, the extension of this Agreement
shall  be  automatically  effected  without  the  execution  of  any  additional
documents;  it being  understood  and agreed,  however,  that Manager and Tenant
shall  execute such  documents and  agreements as either party shall  reasonably
require to evidence the same.

                                   ARTICLE III

                             COMPENSATION OF MANAGER

         3.01  Management  Fees. In  consideration  of the services  provided to
Tenant so that the Hotels become members of the System and in  consideration  of
the management  services to be performed during the Term, Manager shall be paid,
with respect to each Hotel, the sum of the following as its management fees:

         A. The System Fee;

         B. The Priority Management Fee;

         C. The Base Management Fee;

         D. The First Incentive Management Fee; plus

         E. The Second Incentive Management Fee.

         So long as the Pooling  Agreement has not been terminated in accordance
with its terms with respect to the Hotels,  payments of the Priority  Management
Fee, the Base Management Fee, the First Incentive  Management Fee and the Second
Incentive Management Fee shall be made at the time, and in the amounts, provided
for  under  the  Pooling  Agreement.  Notwithstanding  anything  herein  to  the
contrary,  if, in any Fiscal Year or portion thereof prior to the termination of
the Pooling  Agreement in accordance  with its terms with respect to one or more
of the Hotels,  the Base Management  Fee, the First Incentive  Management Fee or
the Second Incentive  Management Fee with respect to such Hotels are not payable
in full under the Pooling  Agreement,  the Manager  shall not be entitled to the
payment  of  the  portion  of the  Base  Management  Fee,  the  First  Incentive
Management  Fee or the Second  Incentive  Management  Fee not payable  under the
terms of the Pooling  Agreement for such Fiscal Year or partial Fiscal Year with
respect to such  Hotels,  and in no event shall Tenant be liable for the payment
of any such unpaid portion to Manager.  Notwithstanding  anything  herein to the
contrary,  if, in any Fiscal Year after the termination of the Pooling Agreement
in  accordance  with its terms or with respect to a Hotel,  the Base  Management
Fee, the First Incentive  Management Fee or the Second Incentive  Management Fee
with  respect to such Hotel is not  payable  under  Section  3.02.B  hereof with
respect to such  Hotel,  Manager  shall not be  entitled  to the  payment of the
portion of the Base Management  Fee, the First  Incentive  Management Fee or the
Second  Incentive  Management  Fee not payable under Section  3.02.B hereof with
respect to such Hotel, and in no event shall Tenant be liable for the payment of
such portion of the Base Management  Fee, the First Incentive  Management Fee or
the Second Incentive Management Fee to Manager with respect to such Hotel.

                                      -9-
<PAGE>

         3.02     Operating Profit.

         A.  So  long as the  Pooling  Agreement  has  not  been  terminated  in
accordance  with its terms with  respect to one or more of the Hotels  Operating
Profit  for such  Hotels  shall be  distributed,  to the  extent  available,  as
provided in the Pooling Agreement and the provisions of Section 3.02.B shall not
apply.

         B. For any period during the Term after the  termination of the Pooling
Agreement in accordance with its terms with respect to one or more of the Hotels
Operating Profit for each such Hotel shall be distributed in the following order
of priority:

              1. First, to Tenant, in an amount equal to Tenant's First Priority
for such Hotel.

              2.  Second,  to  Tenant,  in an amount  equal to  Tenant's  Second
Priority for such Hotel.

              3. Third, to Tenant, in an amount equal to Tenant's Third Priority
for such Hotel.

              4. Fourth,  to Tenant,  in an amount  necessary  to replenish  all
Holdback Agreement Advances allocable to such Hotel.

              5.  Fifth,  to (i) Tenant,  in an amount  necessary  to  reimburse
Tenant  for all Tenant  Working  Capital  Advances  and  Tenant  Operating  Loss
Advances made by Tenant,  from time to time  (collectively,  "Tenant  Advances")
with  respect to such  Hotel  which  have not yet been  repaid by  distributions
pursuant to this Section 3.02.B.5,  and (ii) to Marriott, in an amount necessary
to reimburse Marriott or any Affiliate for all Additional Marriott Advances made
by Marriott or any Affiliate (including Manager) allocable to such Hotel and all
Additional  Manager Advances from time to time which have not yet been repaid by
distributions  pursuant  to this  Section  3.02.B.5.  If at any time the amounts
available  for  distribution  to Tenant  and  Marriott  with  respect to a Hotel
pursuant to this Section  3.02.B.5  ("Available  Funds") are insufficient (a) to
repay to Tenant all  outstanding  Tenant  Advances  with respect to a Hotel (the
"Sum Due  Tenant"),  and (b) to repay to  Marriott  all  outstanding  Additional
Marriott  Advances and Additional  Manager Advances with respect to a Hotel (the
"Sum Due Marriott"),  then (x) Tenant shall be paid from the Available Funds for
such Hotel the amount  obtained by  multiplying  a number equal to the amount of
the Available Funds by a fraction,  the numerator of which is the Sum Due Tenant
and the  denominator  of which is the sum of the Sum Due Tenant plus the Sum Due
Marriott,  and (y) Marriott  shall be paid from the  Available  Funds the amount
obtained by multiplying a number equal to the amount of the Available  Funds for
such Hotel by a fraction, the numerator of which is the Sum Due Marriott and the
denominator of which is the sum of the Sum Due Tenant plus the Sum Due Marriott.

                                      -10-
<PAGE>

              6.  Sixth,  to  Manager,  in  an  amount  equal  to  the  Priority
Management Fee for such Hotel.

              7. Seventh,  to Manager, in an amount equal to the Base Management
Fee for such Hotel.

              8. Eighth,  to Manager,  in an amount equal to the First Incentive
Management Fee for such Hotel  (however,  in no event shall any amount be due or
payable by Manager  pursuant to this clause (8) in the event the First Incentive
Management Fee for any Hotel is equal to or less than Zero Dollars ($0.00).

              9. Ninth, to Manager,  in an amount equal to the Second  Incentive
Management Fee for such Hotel;

              10. Tenth, to Tenant, the balance, if any.

         C. For any period after the Pooling  Agreement  has been  terminated in
accordance  with its terms with respect to one or more of the Hotels,  if Tenant
does not receive on or before the first day of each  Accounting  Period Tenant's
First  Priority  for any such Hotel from  Operating  Profit,  Marriott  Guaranty
Advances or Holdback Agreement Advances which Tenant elects in its discretion to
make (a "Tenant's  First  Priority  Deficiency"),  and further  provided that if
Manager does not fund such Tenant's First Priority  Deficiency (as an Additional
Manager Advance  hereunder)  within ten (10) days of receiving a written request
for the same from Tenant, Tenant shall have the right to effect a Termination of
this Agreement  with respect to such Hotel by written  notice to Manager,  which
Termination  shall be effective as of the  effective  date which is set forth in
said notice,  provided  that said  effective  date shall be at least thirty (30)
days after the date of said notice.  Such Termination (i) shall be in accordance
with the provisions of Section 11.11 of this Agreement,  (ii) shall constitute a
Manager  Default,  and (iii)  shall  entitle  Tenant to all rights and  remedies
available to it with respect to a Manager  Default as provided for in Article IX
hereof.

                                   ARTICLE IV

                    ACCOUNTING, BOOKKEEPING AND BANK ACCOUNTS

         4.01     Accounting, Interim Payment and Annual Reconciliation.

         A. Within twenty (20) days after the close of each  Accounting  Period,
Manager shall deliver an interim  accounting to Tenant and Landlord  showing for
each Hotel,  Gross  Revenues,  Gross Room  Revenues,  occupancy  percentage  and
average  daily  rate,   Deductions,   Operating  Profit,  and  applications  and
distributions  thereof  together  with  an  Officer's  Certificate.  Only if the
Pooling  Agreement has been terminated in accordance with its terms with respect
to one or more Hotels, the following provisions for interim  distributions shall
apply with respect to such Hotels.  Notwithstanding the order of distribution of
Operating  Profit  set forth in  Section  3.02.B,  for each  Accounting  Period,
Manager  shall,  with each  interim  accounting,  transfer to Tenant any interim
amounts due Tenant,  transfer to Marriott  any interim  amounts due to Marriott,
and retain

                                      -11-
<PAGE>

any interim  amounts due to Manager under  Section  3.02.B,  including,  without
limitation,  the Base Management Fee calculated on a year-to-date basis for such
Fiscal Year.  If the portion of  Operating  Profit to be  distributed  to Tenant
pursuant to Items 1, 2, 3, 4 or 5 of Section 3.02.B is  insufficient to pay each
of such interim  amounts then due in full  following  the end of any  Accounting
Period,  any such  interim  amounts  left  unpaid  shall be paid from and to the
extent of Operating Profit available therefor at the time distributions are made
following  successive  Accounting Periods until such interim amounts are paid in
full, and such payments shall be made from such  available  Operating  Profit in
the same  order of  priority  as other  payments  made on  account of such items
following  such  Accounting  Periods.  If the portion of Operating  Profit to be
distributed to Marriott or Manager pursuant to Items 5, 6 or 7 of Section 3.02.B
is  insufficient  to pay each of such interim amounts then due in full following
the end of any Accounting  Period, any such interim amounts left unpaid shall be
paid from and to the extent of Operating Profit  available  therefor at the time
distributions  are made  following  successive  Accounting  Periods  until  such
interim  amounts  are paid in full,  and such  payments  shall be made from such
available  Operating Profit in the same order of priority as other payments made
on account of such items  following  such  Accounting  Periods.  The  portion of
Operating  Profit to be  distributed  as  interim  distributions  to Tenant  for
Tenant's  First Priority and Tenant's Third Priority for the then current Fiscal
Year for each Hotel,  as well as the portion of Operating  Profit to be retained
by Manager as its First Incentive Management Fee and Second Incentive Management
Fee for  each  Hotel,  shall  be  determined  by  applying  in each  instance  a
cumulative  prorated  amount to such Tenant's  First  Priority,  Tenant's  Third
Priority, the First Incentive Management Fee and the Second Incentive Management
Fee  (calculated  on a  year-to-date  basis,  with  the  prorated  amount  being
one-thirteenth  (1/13)  of the  total  amount  for each of such  items  for each
Accounting Period of each Fiscal Year) to the year-to-date  cumulative Operating
Profit of such Hotel (all such portions being hereinafter  collectively referred
to as the  "Prorated  Portions").  In each  Accounting  Period  after  the first
Accounting  Period of a Fiscal Year,  inclusive,  the Prorated Portions shall be
adjusted to reflect  distributions  to Tenant,  and  retention  by  Manager,  of
Operating  Profit with respect to such  Prorated  Portions for prior  Accounting
Periods during the then current Fiscal Year. All the distributions shall be made
in the order of priority as set forth in Section 3.02 hereof.

         B. When  required  under  Section  5.05  hereunder,  the Manager  shall
deliver to Tenant and Landlord  statements to be provided  under Section  5.05.B
hereof. In addition, on or before April 30 of each year, simultaneously with the
delivery  of  the  statements  to  be  provided  under  Section  4.01.D  hereof,
commencing on the April 30 following the Effective  Date,  Manager shall deliver
to Tenant and Landlord an Officer's  Certificate  setting forth the total amount
of deposits  made to, and  expenditures  from,  each  Reserve for the  preceding
Fiscal Year, together with a comparison of such expenditures with the applicable
Reserve Estimate.

         C. 1.  Calculations  and payments of the Base Management Fee, the First
Incentive  Management Fee, the Second Incentive  Management Fee,  Tenant's First
Priority,  Tenant's  Second  Priority and Tenant's Third Priority for each Hotel
and  distributions  of  Operating  Profit made with  respect to each  Accounting
Period within a Fiscal Year for each Hotel shall be accounted for cumulatively.

                                      -12-
<PAGE>

                  2. Within  sixty (60) days after the end of each Fiscal  Year,
Manager shall  deliver to Tenant and Landlord a statement in  reasonable  detail
summarizing  the  operations of the Hotels with respect to which this  Agreement
was in  effect  for the  immediately  preceding  Fiscal  Year  and an  Officer's
Certificate of Manager's chief accounting  officer certifying that such year-end
statement is true and correct.  The parties shall, within ten (10) Business Days
after Tenant's receipt of such statement, make any adjustments, by cash payment,
in the amounts  paid or retained  for such Fiscal Year as are needed  because of
the final figures set forth in such statement;  provided,  however,  that during
any period prior to the termination of the Pooling  Agreement in accordance with
its terms with respect to any of the Hotels,  the year-end  adjustments for such
Hotel shall be made  pursuant to the Pooling  Agreement.  Such final  accounting
shall be controlling over the interim  accountings and shall be final subject to
adjustments  required  as a result of an audit  requested  by Landlord or Tenant
below.  No adjustment  shall be made for any Operating Loss or Operating  Profit
for any Hotel in a preceding  or  subsequent  Fiscal Year.  Notwithstanding  the
foregoing,  in no event  shall  deposits  into any Reserve or  distributions  to
Tenant of Tenant's First Priority for any Hotel be subject to adjustment.

         D.  1.  In  addition,  on or  before  April  30 of  each  Fiscal  Year,
commencing on the April 30 following  the date hereof,  Manager shall deliver to
Tenant and Landlord an Officer's  Certificate  setting forth the totals of Gross
Revenues,  Deductions,  and the  calculation  of Tenant's  Second  Priority  and
Operating  Profit  After  First  Incentive  Management  Fee for each  Hotel with
respect to which this  Agreement  was in effect for the  preceding  Fiscal Year,
together  with an audit  thereof  conducted by Arthur  Andersen  LLP, or another
so-called "Big Five" firm of independent  certified public accountants  proposed
by Manager and  approved by Tenant and  Landlord  (which  approval  shall not be
unreasonably  withheld or delayed).  The cost of such audit with respect to each
Hotel shall be a Deduction for such Hotel.

                  2. If Tenant's  Second  Priority  or any other  amounts due to
Tenant as shown in the Officer's  Certificate provided in Section 4.01.D.1 above
for any Hotel exceed the amounts previously paid with respect thereto to Tenant,
Manager  shall  promptly pay such excess to Tenant at such time as the Officer's
Certificate is delivered, together with interest at the Disbursement Rate, which
interest  shall  accrue from the close of such  preceding  Fiscal Year until the
date that such  certificate  is required to be delivered and,  thereafter,  such
interest shall accrue at the Overdue Rate,  until the amount of such  difference
shall be paid or  otherwise  discharged.  Manager  shall  notify  Tenant of such
payment and the amount thereof and Manager shall promptly  render a statement to
Tenant setting forth the  adjustments  required to be made to the  distributions
under Section  3.02.B for such Fiscal Year and the parties shall  promptly make,
and cause their  respective  Affiliates to make,  any  adjustments or additional
payments or reimbursements  required to comply with such revised  statement.  If
Tenant's Second Priority due as shown in the Officer's Certificate for any Hotel
is less than the amount  previously paid with respect thereto to Tenant,  Tenant
shall within ten (10) Business Days of receipt of written  request from Manager,
pay such excess to Manager,  together  with interest at the  Disbursement  Rate,
which  interest  shall  accrue  from  the date of such  overpayment  until it is
repaid.  Manager shall notify Tenant of the  requirement of such payment and the
amount thereof and Manager shall  promptly  render a statement to Tenant setting
forth the

                                      -13-
<PAGE>

adjustments  required to be made to the  distributions  under Section 3.02.B for
such Fiscal Year and the parties shall promptly make, and cause their respective
Affiliates  to  make  promptly,   any  adjustments  or  additional  payments  or
reimbursements required to comply with such revised statement.

         E. To the extent there is an Operating Loss for any  Accounting  Period
for any Hotel,  Tenant shall have the right,  without any  obligation and in its
sole and absolute discretion,  to advance funds required to fund such deficiency
within twenty (20) days after Manager has delivered  written  notice  thereof to
Tenant;  provided,  however,  during any period in which any Hotel is subject to
the Pooling  Agreement the  determination  of any Operating  Loss for such Hotel
shall be made based on the  aggregate  of the  Operating  Profit  and  Operating
Losses of all Portfolio  Properties and Tenant's rights shall be governed by the
terms and provisions of the Pooling  Agreement.  Any Operating Loss so funded by
Tenant shall  constitute a "Tenant  Operating  Loss Advance." If Tenant does not
fund such Operating Loss, Manager shall also have the right,  within twenty (20)
days after such initial  twenty (20) day period,  without any  obligation and in
its sole and  absolute  discretion,  to  advance  funds  required  to fund  such
Operating  Loss,  and any such advance shall  constitute  an Additional  Manager
Advance with respect to such Hotel.  Tenant  Operating  Loss  Advances  shall be
repaid in  accordance  with Section  3.02.B.5  hereof,  and  Additional  Manager
Advances shall be repaid in accordance with Section 3.02.B.5 hereof.  If neither
party elects to advance funds required to fund such deficiency  pursuant to this
Section  4.01.E,  either  party  may  elect by  written  notice  to the other to
terminate this Agreement with respect to such Hotel,  which termination shall be
effective  thirty (30) days after the date such notice is given (such  notice to
be given no later than thirty (30) days after the last date by which Manager may
elect  to fund  such  Operating  Loss)  and  otherwise  in  accordance  with the
provisions of Section 11.11 hereof.  Such Termination (i) shall be in accordance
with the provisions of Section 11.11 of this Agreement,  (ii) shall constitute a
Manager  Default,  and (iii)  shall  entitle  Tenant to all rights and  remedies
available to it with respect to a Manager  Default as provided for in Article IX
hereof;  provided,  however,  as a condition to Manager so electing to terminate
this Agreement with respect to such Hotel, Marriott shall make a binding written
offer to Tenant and Landlord to terminate the Franchise Agreement for such Hotel
and the Owner's  Agreement to the extent the same  relates to the Hotel  without
cost or penalty to Tenant or Landlord,  which offer shall be  irrevocable  for a
period of one hundred twenty (120) days after such termination.

         F.  Manager  shall  provide to Landlord  and Tenant  with each  interim
accounting an Officer's  Certificate  setting forth the  calculation of Tenant's
Second Priority due and payable for such Accounting Period for each Hotel.

         G. 1. In  addition,  Manager  shall  provide  Landlord  and Tenant with
information  relating to the Hotels and public  information  relating to Manager
and its  Affiliates  that (a) may be required in order for Landlord or Tenant as
the case may be to prepare  financial  statements in accordance  with GAAP or to
comply  with   applicable   securities   laws  and  regulations  and  the  SEC's
interpretation  thereof,  (b) may be required  for Tenant or Landlord to prepare
federal,  state  or  local  tax  returns,  or (c) is of the  type  that  Manager
customarily prepares for other hotel owners; provided, however, that (i)

                                      -14-
<PAGE>

Manager reserves the right, in good faith, to challenge and require Landlord and
Tenant to use commercially  reasonable efforts to challenge any assertion by the
SEC,  any other  applicable  regulatory  authority,  or  Landlord's  or Tenant's
independent public accountants that applicable law,  regulations or GAAP require
the  provision or  publication  of  Proprietary  Information,  (ii) Landlord and
Tenant  shall  not,  without  Manager's  consent  (which  consent  shall  not be
unreasonably withheld, delayed or conditioned), acquiesce to any such challenged
assertion  until  Landlord and Tenant have  exhausted all  reasonable  available
avenues of  administrative  review,  and (iii) Landlord and Tenant shall consult
with  Manager  in  pursuing  any  such  challenge  and  will  allow  Manager  to
participate  therein if and to the extent that  Manager so elects.  Landlord and
Tenant  acknowledge  that the  foregoing  does not  constitute  an  agreement by
Manager  either to join in any  Landlord  and Tenant  filing with or  appearance
before the SEC or any other  regulatory  authority  or to take or consent to any
other action  which would cause  Manager to be liable to any third party for any
statement or information  other than those statements  incorporated by reference
pursuant to clause (a) above.

              2.  Subject  to  such  Person  entering  into  a   confidentiality
agreement  with  Manager as Manager may  reasonably  require,  Tenant may at any
time, and from time to time,  provide copies of any of the statements  furnished
under this Section 4.01 to any Person which has made or is contemplating  making
a Qualifying Mortgage or other lender with respect to one or more of the Hotels.

              3. In addition,  Landlord  and Tenant  shall have the right,  from
time to time at  Landlord's  or  Tenant's  (as the case  may be)  sole  cost and
expense,  upon reasonable  written notice,  during Manager's  customary business
hours,  to cause  Manager's  books and records  with respect to the Hotels to be
audited by  auditors  selected by Landlord or Tenant (as the case may be) at the
place or places  where such books and records  are  customarily  kept,  provided
that,  prior to conducting such audit,  Landlord or Tenant,  as the case may be,
shall enter into a confidentiality  agreement with Manager, such agreement to be
in form and substance reasonably satisfactory to Landlord or Tenant (as the case
may be) and Manager.

         4.02     Books and Records.

         A. Books of control and account  pertaining to operations at the Hotels
shall be kept on the accrual  basis and in all material  respects in  accordance
with the  Uniform  System of  Accounts  and in  accordance  with GAAP,  with the
exceptions, if any, provided in this Agreement and the Pooling Agreement, to the
extent  applicable which will accurately record the Gross Revenues of the Hotels
and  applications  thereof.  Manager shall retain,  for at least three (3) years
after the expiration of each Fiscal Year,  reasonably  adequate  records showing
Gross  Revenues  and  applications  thereof  for the Hotels for such Fiscal Year
(which obligation shall survive termination hereof).

         B. Tenant may at reasonable  intervals during Manager's normal business
hours examine such books and records including,  without limitation,  supporting
data and sales and excise tax returns. If Tenant desires, at its own expense, to
audit,  examine,  or review the annual operating statement which is described in
Section 4.01.C, Tenant shall

                                      -15-
<PAGE>

notify Manager in writing within one (1) year after receipt of such statement of
its  intention  to audit and begin  such  audit  within  such one (1) year after
Manager's  receipt of such  notice.  Tenant  shall use  commercially  reasonable
efforts to complete  such audit as soon as  practicable  after the  commencement
thereof,  subject  to  reasonable  extension  if  Tenant's  or its  accountant's
inability to complete the audit within such time is caused by Manager. If Tenant
does  not make  such an  audit,  then  such  statement  shall  be  deemed  to be
conclusively accepted by Tenant as being correct, and Tenant shall have no right
thereafter,  except for  adjustments  made  pursuant  to an audit  requested  by
Landlord  under the Owner  Agreement  or in the  event of fraud by  Manager,  to
question  or examine the same.  If any audit by Tenant or Landlord as  aforesaid
(1)  discloses  an  understatement  of  any  net  amounts  due  Tenant  and  its
Affiliates,  in the aggregate,  hereunder (and,  prior to the termination of the
Pooling  Agreement in  accordance  with its terms with respect to the Hotels and
the Other Management  Agreements for the Fiscal Year in question) Manager shall,
and shall cause its Affiliates, to promptly pay Tenant such net amounts found to
be due,  plus  interest  thereon at the Overdue  Rate from the date such amounts
should  originally  have  been  paid,  or (2)  discloses  that  Manager  and its
Affiliates  have  not  received,  in the  aggregate,  any net  amounts  due them
hereunder (and, prior to the termination of the Pooling  Agreement in accordance
with its terms with  respect to the Hotels and the Other  Management  Agreements
for the Fiscal Year in question),  Tenant shall, and shall cause its Affiliates,
to promptly pay Manager such net amounts,  plus  interest  thereon (at the Prime
Rate  plus one  percent  (1%) per  annum)  from the  date  such  amounts  should
originally  have been paid.  Manager  shall  promptly  after  completion  of the
adjustments required as a result of any such audit, render a statement to Tenant
setting  for that  adjustments  required to be made to the  distributions  under
Section  3.02.B for such Fiscal Year which reflect all  adjustments  made to the
amounts due Tenant,  Marriott  and/or  Manager as a result of such audit and the
parties shall make and cause their respective Affiliates to make any adjustments
or additional  payments or  reimbursements  required to comply with such revised
statement. Any dispute concerning the correctness of an audit by Tenant shall be
settled  by  Arbitration.  Manager  shall  pay the cost of any  audit  revealing
understatement  of  Operating  Profit or Tenant's  Second  Priority by more than
three  percent  (3%),  and such  amount  shall  not be a  Deduction  from  Gross
Revenues.

         4.03     Accounts, Expenditures.

         A. Tenant irrevocably authorizes and directs Manager to pay and Manager
agrees to pay (or  repay,  as  applicable),  without  notice,  demand or request
therefor,  but in  each  instance  subject  to  the  provisions  of the  Pooling
Agreement,  if applicable,  and the Marriott Guaranty Agreement,  if applicable,
with respect to each of the Hotels:  (1) Tenant's First Priority (which shall be
due on the  first  Business  Day of each  Accounting  Period),  Tenant's  Second
Priority and Tenant's Third Priority,  to Tenant when due and payable hereunder,
to the extent of the  sufficiency  of  Operating  Profit  therefor,  and (2) (i)
replenishment  of any  Holdback  Agreement  Advances  to Tenant  subject  to the
provisions of this  Agreement,  (ii)  distributions  to Tenant and Marriott with
respect to Tenant  Advances and  Additional  Marriott  Advances  and  Additional
Manager  Advances,  (iii) any  Priority  Management  Fee to itself (iv) the Base
Management  Fee to  itself,  and (v) any  other  distributions  provided  for in
Section  3.02.B,  in each of the  foregoing  instances set forth in this Section
4.03.A (2) (i) through (v), at the time interim

                                      -16-
<PAGE>

distributions  are made pursuant to Section 4.01 hereof (except as otherwise set
forth in Section 4.03.B.1  below),  and to the extent of the sufficiency of, and
in the order of, distribution of Operating Profit under Section 3.02.B.  Subject
to Section 4.03.D,  Manager is authorized to, and shall,  make all  expenditures
required to be made hereunder  with respect to the operation of the Hotels,  but
only from funds available for such payments under the terms of this Agreement or
under the terms of the Pooling Agreement,  if applicable,  or under the Marriott
Guaranty Agreement, if applicable.

         B. 1. The parties  acknowledge  that Tenant,  to ensure that Tenant has
sufficient  funds timely to pay Minimum  Rent due  pursuant to the Leases,  must
receive, and Manager agrees to pay to Tenant subject to the sufficiency of funds
available  therefore  pursuant  to  this  Agreement  and the  Marriott  Guaranty
Agreement,  Tenant's First Priority on the first day of each  Accounting  Period
and,  thus,  Tenant  is  required  to be paid  Tenant's  First  Priority  before
Operating Profit for such Accounting  Period is determined.  As a result,  it is
possible that Manager will pay Tenant's  First  Priority for the Hotels prior to
determining  whether Operating Profit for such Accounting Period was adequate to
cover such Tenant's First  Priority.  If for any given  Accounting  Period it is
determined  that  Operating  Profit was inadequate to cover any such payments of
Tenant's  First  Priority  that  were  made  by  Manager  with  respect  to such
Accounting Period,  that portion of Tenant's First Priority paid with respect to
such Accounting  Period in excess of Operating Profit for such Accounting Period
shall be deemed to be  advances  by Manager  constituting  a  Marriott  Guaranty
Advance  pursuant  to the  Marriott  Guaranty  Agreement  to the  extent  of the
availability of funds therefor pursuant to the terms thereof, and otherwise,  an
Additional  Manager Advance,  in each instance which shall be repaid as provided
in the Pooling Agreement or Section 3.02.B hereof, as applicable.

              2. Notwithstanding anything herein to the contrary,  within twenty
(20) days after the end of each  Accounting  Period,  Manager or Marriott  shall
determine whether either of a Marriott Guaranty Advance or an Additional Manager
Advance  was made with  respect to such  Accounting  Period,  and if Marriott or
Manager  has made  such an  advance  with  respect  to such  Accounting  Period,
Marriott  or Manager  shall  advise  Tenant in writing of the type and amount of
such advance (each such notice,  an "Advance  Notice").  Tenant may, in its sole
discretion,  elect  immediately to repay any Additional  Manager  Advance.  This
paragraph  shall only be applicable with respect to advances made or deemed made
to fund the payment of Tenant's First Priority.

         C. Subject to the terms of the Pooling Agreement,  as appropriate,  all
escrow reserve accounts and funds derived from the operation of the Hotels shall
be deposited by Manager in a bank  account(s)  in a bank  designated by Manager.
Withdrawals  from  said  accounts  shall be made  solely by  representatives  of
Manager whose signatures have been authorized. Reasonable petty cash funds shall
be maintained at the Hotels.

         D.  Manager  shall  not be  required  to make any  advance  or  payment
hereunder  or to or for the  account  of Tenant  except  out of funds  available
therefor  pursuant to the terms of this Agreement  except as otherwise set forth
herein or in any of the Incidental Documents, and Manager shall not be obligated
to incur any liability or obligation  for Tenant's  account  without  assurances
satisfactory to Manager that necessary  funds for the

                                      -17-
<PAGE>

discharge  thereof  will be  provided  by  Tenant.  In any  event,  if any  such
liability or obligation is incurred by Manager for Tenant's account and Marriott
does not have funds  available  under the Pooling  Agreement or Manager does not
have funds  hereunder if the Pooling  Agreement is not in effect with respect to
the applicable  Hotel to pay such amount on or before twenty (20) days after the
end of the Accounting Period in which such liability or obligation was paid, the
amount  advanced to pay such obligation  shall be an Additional  Manager Advance
which shall be repaid as provided in Section 3.02.B hereof.

         4.04 Annual Operating  Projection.  Manager shall furnish to Tenant for
its  review,  on or before (i) thirty  (30) days after the  commencement  of any
Fiscal Year commencing  after the Effective Date with respect to each Hotel, and
(ii) in the case of the first  partial  Fiscal  Year of  operations  of a Hotel,
within thirty (30) days after the Effective  Date with respect to such Hotel,  a
statement of the estimated financial results of the operation of each such Hotel
during the then  current  Fiscal  Year  ("Annual  Operating  Projection").  Such
projection  shall project the estimated  Gross Revenues,  departmental  profits,
Deductions,  and Operating Profit for the forthcoming  Fiscal Year for each such
Hotel.  Manager  agrees to take  reasonable  steps to ensure  that,  at Tenant's
request,  qualified personnel from Manager's staff are available to explain such
Annual Operating Projections to Tenant. A meeting (or meetings) for such purpose
shall be held, at Tenant's request, within a reasonable period of time after the
submission  to Tenant of the Annual  Operating  Projection.  Manager will at all
times give good faith consideration to Tenant's suggestions regarding any Annual
Operating  Projection.  Manager shall thereafter  submit to Tenant,  by no later
than  seventy-five (75) days after the beginning of such Fiscal Year, a modified
Annual  Operating  Projection  if any  changes  are made  following  receipt  of
comments from Tenant.  Manager shall endeavor to adhere to the Annual  Operating
Projection.  It is understood,  however, that the Annual Operating Projection is
an estimate only and that unforeseen  circumstances such as, but not limited to,
the costs of labor, material, services and supplies, casualty, operation of law,
or economic and market  conditions  may make  adherence to the Annual  Operating
Projection impracticable,  and Manager shall be entitled to depart therefrom due
to causes of the foregoing nature; provided,  however, that nothing herein shall
be deemed to authorize  Manager to take any action  prohibited by this Agreement
or to reduce Manager's other rights or obligations hereunder.

         4.05     Working Capital.

         A. Manager  shall provide the Initial  Working  Capital for each Hotel.
Manager  represents  that in its good faith judgment the Initial Working Capital
that it shall  provide  for each Hotel is in an amount  that is  reasonable  and
customary for a hotel of the size and type of the Hotel as of the Effective Date
for such Hotel. Subject to the terms of the Pooling Agreement, at any time after
the twelve (12) month  anniversary  of the  Effective  Date with  respect to any
Hotel,  upon written notice from Manager,  Tenant shall have the right,  without
any  obligation  and in  its  sole  and  absolute  discretion,  to  advance  any
additional  funds,  over and above the  Initial  Working  Capital  necessary  to
maintain  Working  Capital at levels  determined  by  Manager  to be  reasonably
necessary to satisfy the needs of the Hotels as their operation may from time to
time require  within ten (10)

                                      -18-
<PAGE>

days of such  request.  Any such request by Manager  shall be  accompanied  by a
reasonably  detailed  explanation  of the reasons for the request.  All funds so
advanced  for Working  Capital  shall be utilized by Manager on behalf of Tenant
for  the  purposes  of  this  Agreement  pursuant  to  cash-management  policies
established for the System provided,  however, that so long as any of the Hotels
are subject to the Pooling  Agreement,  the Working Capital for such Hotels will
be pooled with working capital  provided under the Other  Management  Agreements
and may be used to fund working capital needs for all Portfolio  Properties.  If
Tenant does not advance such  additional  Working  Capital  within ten (10) days
after notice,  Manager shall have the right,  without any  obligation and in its
sole and absolute  discretion to advance such additional  Working Capital within
ten (10) days after such  initial  ten (10) day  period,  and all such  advances
shall constitute Tenant Working Capital Advances or Additional Manager Advances,
as applicable,  and shall be repaid as provided in Section 3.02.B.5  hereof.  If
neither party elects to advance funds required to fund such deficiency  pursuant
to this Section 4.05.A, either party may elect by written notice to the other to
terminate this Agreement with respect to the affected Hotel,  which  termination
shall be  effective  thirty  (30) days  after the date such  notice is given and
otherwise in  accordance  with the  provisions  of Section  11.11  hereof.  Such
Termination  (i) shall be in accordance  with the provisions of Section 11.11 of
this Agreement, (ii) shall constitute a Manager Default, and (iii) shall entitle
Tenant to all  rights and  remedies  available  to it with  respect to a Manager
Default as provided for in Article IX hereof; provided,  however, as a condition
to Manager so electing to terminate  this  Agreement with respect to such Hotel,
Marriott shall make a binding  written offer to Tenant and Landlord to terminate
the Franchise  Agreement for such Hotel and the Owner's  Agreement to the extent
the same  relates to the Hotel  without  cost or penalty to Tenant or  Landlord,
which offer shall be  irrevocable  for a period of one hundred twenty (120) days
after such termination..

         B. Subject to the Pooling  Agreement,  upon Termination,  Manager shall
disburse to Tenant all Working Capital remaining after payment of all Deductions
and all  amounts  owed to  Manager  hereunder  and  amounts  payable  by  Tenant
hereunder  (including  funds to be held in  escrow  under  Sections  6.01.F  and
11.01.I).

         4.06 Fixed Asset Supplies.  Any additional  Fixed Asset Supplies,  over
and above those provided by Manager or its Affiliates  pursuant to the Agreement
to Lease or the Purchase  and Sale  Agreement,  which are  necessary to maintain
Fixed Asset Supplies at levels  determined by Manager to be necessary to satisfy
the needs of each Hotel, as their operation may from time to time require, shall
be paid from Gross Revenues of such Hotel as Deductions.  Such additional  Fixed
Asset Supplies  shall remain the property of Tenant  throughout the Term of this
Agreement and upon  Termination,  except for Fixed Asset  Supplies  purchased by
Manager pursuant to Section 11.11.E.

                                    ARTICLE V

                      REPAIRS, MAINTENANCE AND REPLACEMENTS

         5.01 Manager's  Maintenance  Obligation.  Except as provided in Section
5.02  hereof,  and  subject  to the  availability  of  sufficient  funds  in the
applicable  Reserves,

                                      -19-
<PAGE>

Manager shall maintain the Hotels including all private roadways,  sidewalks and
curbs  located  thereon  in good  order  and  repair,  reasonable  wear and tear
excepted  (whether  or not the need  for  such  repairs  occurs  as a result  of
Tenant's or Manager's use, any prior use, the elements or the age of the Hotels,
or any portion  thereof),  and in  conformity  with Legal  Requirements,  System
Standards,  Operating  Standards and any Existing CC&R's or Future CC&R's (which
Future  CC&R's  must be  approved  in  writing  by  Manager  if the  same may be
reasonably  expected to interfere  in any material way with the  operation of or
financial  performance  of a Hotel).  Except as provided in Section 5.02 hereof,
and subject to the  availability of sufficient  funds in the applicable  Reserve
for each Hotel  with  respect to capital  items,  and the  sufficiency  of Gross
Revenue  and Working  Capital for each Hotel  otherwise,  in each  instance,  as
applicable,  Manager  shall  promptly make or cause to be made all necessary and
appropriate repairs, replacements, renewals, and additions thereto of every kind
and nature, whether interior or exterior, structural or nonstructural,  ordinary
or  extraordinary,  foreseen or  unforeseen  or arising by reason of a condition
existing prior to the  commencement  of the Term  (concealed or otherwise).  All
repairs,  renovations,  alterations,  improvements,  renewals,  replacements  or
additions shall be made in a good, workmanlike manner, consistent with Manager's
and industry  standards for like hotels in like locales,  in accordance with all
applicable federal, state and local statutes, ordinances,  by-laws, codes, rules
and  regulations  relating  to any such  work.  Subject to the  availability  of
sufficient funds in the applicable Reserve for each Hotel or otherwise available
pursuant to this  Agreement,  Manager shall not take or omit to take any action,
with respect to the Hotel (and not the System as a whole) the taking or omission
of which would  materially  and  adversely  impair the value of any Hotel or any
part thereof for its use as a hotel. The cost and expense incurred in connection
with Manager's obligations hereunder shall be paid either from funds provided by
Tenant or Landlord as provided for herein,  Gross  Revenues,  Working Capital or
from the  Reserves,  pursuant to Sections  5.02 and 5.03 below.  Nothing in this
Agreement  shall modify any obligation of Marriott or Manager under the Purchase
and Sale Agreement or the Agreement to Lease.

         5.02 Repairs and  Maintenance to be Paid from Gross  Revenues.  Manager
shall promptly make or cause to be made, such routine  maintenance,  repairs and
minor  alterations  as it  determines  are  necessary  to comply with  Manager's
obligations under Section 5.01. The phrase "routine  maintenance,  repairs,  and
minor  alterations"  as used in this Section 5.02 shall include only those which
are  normally   expensed  under   generally   accepted   accounting   principles
consistently  applied.  The cost of such  maintenance,  repairs and  alterations
shall be paid from  Gross  Revenue  for such  Hotel  (and not from such  Hotel's
Reserve) and shall be treated as a Deduction in determining Operating Profit for
such Hotel.

         5.03     Items to be Paid from Reserves.

         A. To the extent funds are in the applicable Reserves for each Hotel or
such funds are provided by Tenant or Landlord under Section 5.07 hereof, Manager
shall  promptly  make or cause to be made,  all of the items  listed in  Section
5.03.B below as are necessary to comply with Manager's obligations under Section
5.01 hereof.  The cost of

                                      -20-
<PAGE>

such items shall be paid from the applicable Reserve and not from Gross Revenues
of a Hotel.

         B. Manager shall  establish for each Hotel an interest  bearing  escrow
reserve  account  (each a "Reserve"  and  collectively  the  "Reserves"),  which
Reserves  shall not be comingled with any other funds except for the Reserves of
other  Portfolio  Properties,  in a bank or similar  institution  designated  by
Manager and reasonably acceptable to Tenant and Landlord, to cover the cost of:

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

              2. Subject to Section 5.02 hereof,  routine or non-major  repairs,
renovations, renewals, additions, alterations,  improvements or replacements and
maintenance  to each  Hotel  which  are  normally  capitalized  (as  opposed  to
expensed) under generally accepted accounting  principles  consistently applied,
such as exterior and interior  repainting;  resurfacing  building walls, floors,
roofs and parking areas; and replacing folding walls and the like (but which are
not  major  repairs,  alterations,   improvements,  renewals,  replacements,  or
additions  to each  Hotel's  structure,  roof,  or  exterior  facade,  or to its
mechanical,  electrical,  heating,  ventilating,  air conditioning,  plumbing or
vertical transportation systems); and

              3.   Major   repairs,   renovations,    additions,    alterations,
improvements,   renewals  or  replacements  to  each  Hotel  including,  without
limitation,  with respect to its structure, roof, or exterior facade, and to its
mechanical,  electrical,  heating,  ventilating,  air conditioning,  plumbing or
vertical transportation systems; and

              4. All lease  payments for equipment and other  personal  property
reasonably necessary for the operation of each Hotel; and

              5.  Repairs,  renewals  or  replacements,  and other  expenditures
having a cost,  in the  aggregate,  in excess of $25,000 per Fiscal Year at each
Hotel that are, in each case, not otherwise  covered under 1 through 3 above but
are required to comply with Legal Requirements and Insurance Requirements.

         C. Upon the Effective Date, Manager shall transfer the existing Reserve
for each Hotel as provided in the Agreement to Lease and applicable Purchase and
Sale Agreement,  in the amount set forth on each applicable Addendum.  After the
Effective  Date,  Manager shall transfer into the Reserve for each Hotel amounts
as provided on the  applicable  Addendum.  Transfers  into each Reserve shall be
made at the time of each interim accounting  described in Section 4.01.A hereof.
All amounts transferred to each Reserve shall be deducted from Gross Revenues in
determining  Operating Profit for the applicable Hotel and shall be deposited in
the special Reserve account described in Section 5.03.B.

         D. Manager  shall from time to time,  with respect to each Hotel,  make
expenditures  for the items  described in Sections  5.03.B.1,  B.2, B.3, B.4 and
B.5, as it

                                      -21-
<PAGE>

deems necessary  without the approval of Landlord or Tenant.  At the end of each
Fiscal Year,  any amounts  remaining in the Reserve for a Hotel shall be carried
forward  to the next  Fiscal  Year.  Proceeds  from  the sale of FF&E no  longer
necessary  to the  operation  of a Hotel  shall be added to the Reserve for such
Hotel,  and shall not be included in Gross Revenue for such Hotel.  The Reserves
will be kept in  interest-bearing  accounts,  and  any  interest  which  accrues
thereon  shall be  retained  in such  Reserve.  Neither  (1)  proceeds  from the
disposition  of FF&E,  nor (2)  interest  which  accrues on amounts  held in the
Reserves, shall (a) result in any reduction in the required contributions to the
Reserves  set  forth in  Section  5.03.C  above,  nor (b) be  included  in Gross
Revenues.

         5.04     Reserve Estimates.

         Manager  shall  prepare and deliver to Tenant and Landlord on or before
December  1 of each  Fiscal  Year for their  review an  estimate  for each Hotel
(each, a "Reserve  Estimate") of the Reserve  expenditures  necessary during the
ensuing Fiscal Year for (1) replacements, renewals, and additions to the FF&E of
such Hotel and (2) repairs, renovations,  additions, alterations,  improvements,
renewals  or  replacements  to such  Hotel of the  nature  described  in Section
5.03.B,  for the succeeding Fiscal Year. Manager agrees to take reasonable steps
to ensure that,  at Tenant's or Landlord's  request,  qualified  personnel  from
Manager's  staff are  available to explain each proposed  Reserve  Estimate with
respect to expenditures  described in Section 5.03.B.3.  A meeting (or meetings)
for such purpose  shall be held,  at Tenant's or  Landlord's  request,  within a
reasonable  period of time after the submission to Tenant or Landlord  described
in each Reserve Estimate.  Any disputes as to items in each Reserve Estimate for
expenditures  described  in Section  5.03.B.3  shall be resolved as set forth in
Sections 5.07.D and 5.07.E hereof.  Such  expenditures  shall be funded from the
applicable  Reserve to the extent  funds are  available  therefor  or from funds
provided under Section 5.07 hereof.

         5.05     Additional Requirements for Reserve.

         A. All  expenditures  from the Reserves shall be (as to both the amount
of each such  expenditure  and the timing thereof) both reasonable and necessary
given the  objective  that the  Hotels  will be  maintained  and  operated  to a
standard  comparable  to  competitive  properties  and in  accordance  with  the
Operating Standards and the System Standards.

         B.  Manager  shall  provide to Tenant and  Landlord  within  forty (40)
Business  Days after the end of each  Accounting  Period,  a  statement  setting
forth, on a line item basis, Reserve expenditures made to date and any variances
or anticipated variances and/or amendments from the applicable Reserve Estimate.

         C.  Notwithstanding  anything  contained herein to the contrary,  it is
understood and agreed that so long as the Pooling Agreement is applicable to the
Hotels,  the  Reserves  pursuant  to this  Agreement  and the  Other  Management
Agreements to which the Pooling Agreement is then applicable shall be maintained
and used on a pooled  basis such that all Reserve  funds shall be deposited in a
single  account  and  Manager  and  the  managers  under  the  Other  Management
Agreements  may apply any funds  therein to

                                      -22-
<PAGE>

any of the Portfolio  Properties in accordance with the terms of this Agreement,
the Other Management Agreements, and the Pooling Agreement.

         D. Other than Tenant's or Manager's  personal  property,  all materials
which are  scrapped  or  removed in  connection  with the making of any major or
non-major repairs, renovation, additions, alterations, improvements, removals or
replacements  as described in Section 5.03.B above, or Section 5.08 below should
be disposed of by Manager and the net proceeds thereof shall be deposited in the
applicable Reserve and not included in Gross Revenue.

         5.06 Ownership of Replacements.  All repairs,  renovations,  additions,
alterations,  improvements,  renewals  or  replacements  made  pursuant  to this
Article V, and all amounts  kept in the  Reserves,  shall,  except as  otherwise
provided  in  this  Agreement,  be  the  property  of  Tenant  or  Landlord,  as
applicable, as provided under the Lease.

         5.07     Obligation To Provide Additional Reserve Funds.

         A.   Notwithstanding   any  provision   herein  to  the  contrary,   no
expenditures  in excess of the  applicable  Reserves  shall be made  without the
approval of the Tenant during the last two years of a Lease Term (unless  Tenant
has exercised its rights for a Renewal Term) except those  required by reason of
or under any Insurance  Requirement or Legal Requirement,  or otherwise required
for the continued safe and orderly operation of each Hotel.

         B. If, at any time, the funds in any Reserve shall be  insufficient  or
are  reasonably  projected  to  be  insufficient  for  necessary  and  permitted
expenditures  thereof,  Manager  shall give Landlord and Tenant  written  notice
thereof,  which notice shall set forth, in reasonable  detail, the nature of the
required or permitted action,  the estimated cost thereof  (including the amount
which is in  excess  of the  amount  of funds in such  Reserve)  and such  other
information  with respect thereto as Landlord or Tenant may reasonably  require,
and the  following  shall apply:  Provided that (1) there then exists no Manager
Default hereunder, and (2) Manager shall otherwise comply with the provisions of
Section 5.08 hereof,  if applicable,  Tenant shall,  within thirty (30) Business
Days after such notice,  or such later date as Manager may direct by  reasonable
prior notice,  disburse (or cause  Landlord to disburse)  such required funds to
Manager for deposit into the Reserves as one or more lump sum contributions,  in
which event Tenant's First Priority with respect to such Hotel shall be adjusted
as provided  for herein in the  definition  of Tenant's  First  Priority and the
Addendum for such Hotel shall be revised in accordance therewith.

         C. If  Landlord  or Tenant  disputes  Manager's  request for a lump sum
contribution to a Reserve, Manager shall attempt to resolve such dispute through
negotiation.  If after one meeting (or conference  call) of direct  negotiations
between Manager and Landlord or Tenant, as applicable, any party determines that
open issues  cannot be resolved  within sixty (60) days,  such matters  shall be
submitted to Arbitration.  Tenant and Landlord  shall,  to the extent  possible,
identify items in dispute on a line by line basis.

                                      -23-
<PAGE>

         D. A failure or refusal by  Landlord to provide  the  additional  funds
required in  accordance  with  Section  5.07.B  above within the time period set
forth in Section 5.07.B  (including after any Arbitration,  if applicable) shall
entitle  Manager,  at its option,  to notify  Tenant in writing that Manager may
terminate this Agreement with respect to the applicable Hotel if Tenant does not
advance such funds. Tenant shall promptly thereafter,  fund the amounts required
to be  contributed  to such Reserve.  If Tenant does not deposit in such Reserve
the additional  funds  required in accordance  with Section 5.07.B within thirty
(30) days after receipt of such notice of intent to  terminate,  Manager may, in
its sole and absolute discretion,  (i) provided Landlord's interest in the Hotel
is not then subject to a  Qualifying  Mortgage or owned by a Person who acquired
such interest pursuant to a Qualifying Mortgage (or a deed-in-lieu in connection
therewith),  elect to terminate  this  Agreement  with respect to the applicable
Hotel by  written  notice to Tenant  and this  Agreement  shall  terminate  with
respect to the applicable  Hotel as of the date that is one hundred eighty (180)
days  after  the  date of  Tenant's  receipt  of  Manager's  notice,  and  which
termination  shall  otherwise be in  accordance  with the  provisions of Section
11.11 hereof,  or (ii) exercise any remedy available at law or in equity (except
as  specifically  limited  herein) or (iii)  without  obligation,  fund all or a
portion of the amounts  required to be  contributed  to such Reserve (a "Manager
Reserve  Advance").  Under the  Lease,  Tenant  is  entitled  to offset  amounts
required for the repayment of any Manager  Reserve  Advance  against  Additional
Rent due pursuant to the Lease.  Tenant  agrees and  authorizes  Manager to make
payments to reimburse Manager for such advances,  by deducting such amounts from
Operating Profit owed to Tenant as Tenant's Second Priority,  to the full extent
to which Tenant is entitled to an offset against Additional Rent due from Tenant
to Landlord pursuant to the Lease. Landlord has pursuant to the Owner Agreement,
instructed  Manager that, to the extent of Landlord's right,  title and interest
therein, Manager may disburse and apply amounts held by Manager for Tenant which
would be payable by Tenant to Landlord as  Additional  Rent due  pursuant to the
Lease to repay any Manager Reserve  Advance until paid in full.  Notwithstanding
the  foregoing,  the  parties  acknowledge  and agree  that  while  the  Pooling
Agreement is in effect with respect to two or more Hotels, Manager's termination
right  pursuant to this Section  5.07.F shall only be exercised  with respect to
all or none of the Hotels which are subject to the Pooling Agreement.

         5.08 Additional Requirements Relating to Certain Capital Improvements.

         A. Prior to commencing  construction of any additions or  modifications
to any  structural  elements  of any  Hotel,  the cost of  which  is  reasonably
estimated  to exceed  $250,000  (as  adjusted  as  provided  below) (a  "Capital
Addition")  (other than any Capital Addition which is reasonably  required to be
made  immediately  in order to  prevent  imminent  damage or danger to person or
property or to subject  Manager,  Tenant or  Landlord  to  criminal  liability),
Manager  shall  submit,  to Tenant and Landlord in writing,  a proposal  setting
forth,  in reasonable  detail,  any such proposed  improvement and cost estimate
therefor  and  shall   provide  to  Tenant  and  to  Landlord   such  plans  and
specifications, and such permits, licenses, contracts and such other information
concerning the same as Landlord or Tenant may reasonably  request.  Landlord and
Tenant  shall have  twenty  (20)  Business  Days to approve  or  disapprove  all
materials  submitted  to Landlord or Tenant,  as the case may be, in  connection
with any such

                                      -24-
<PAGE>

proposal.  Failure of  Landlord or Tenant to respond to the  Manager's  proposal
within twenty (20) Business Days after receipt of all  information and materials
requested by Landlord or Tenant (if  applicable) in connection with the proposed
improvement  shall be deemed to  constitute  approval of the same by the failing
party.

         B. In the event any dispute shall arise with respect to the withholding
of any approval by either  Landlord or Tenant,  Manager shall meet with Landlord
and Tenant to discuss  the  objections  of  Landlord  or  Tenant,  and  Manager,
Landlord  and Tenant  shall  attempt in good faith to resolve  any  disagreement
relating to the  proposal  submitted  by Manager.  If after sixty (60) days such
disagreement  has  not  been  resolved,  any  party  may  submit  the  issue  to
Arbitration.  No Capital  Addition shall be made which would tie-in or connect a
Hotel with any other  improvements  on property  adjacent to such Hotel (and not
part of the Site) including,  without limitation,  tie-ins of buildings or other
structures or utilities  (other than connections to public  utilities).  Manager
shall not  finance  the cost of any  construction  of such  improvements  by the
granting of a lien on, or security interest in, such Hotel or Manager's interest
therein without the prior written  consent of Landlord,  which consent may be in
Landlord's sole discretion.

         C. The $250,000 limit referred to above shall be increased from time to
time to an amount equal to $250,000 multiplied by a fraction, the denominator of
which shall be the Index for the nearest month prior to the  Effective  Date and
the  numerator  of which shall be the Index for the nearest  month for which the
Index is available prior to the first day of the Accounting Period in which such
determination is being made.

         D.  Landlord  and Tenant may not  withhold  their  approval  of Capital
Addition  described  in this  Section 5.08 with respect to such items as are (1)
required in order for the Hotels to comply with System  Standards  or  Operating
Standards;  or (2) required by reason of or under any Insurance  Requirement  or
Legal  Requirement,  or otherwise  required for the  continued  safe and orderly
operation of each Hotel.

         5.09 Special Provision Re: Hotel in Emeryville, California.

         A. With respect to the Hotel  located in  Emeryville,  California  only
(the  "Emeryville  Hotel"),  Manager will  continue to own the existing FF&E for
such  Hotel,  and  Manager  covenants  to use all of such  existing  FF&E in the
operation and management of such Hotel. Any replacement  FF&E obtained  pursuant
to this Agreement shall not be the property of Manager but shall be the property
of Tenant.  Upon any sale or  disposition  of any of the  existing  FF&E for the
Emeryville  Hotel, any proceeds  received from the same shall be placed into the
Reserve for such Hotel,  and Manager  shall have no further  ownership  right or
interest  therein,  and  shall  thereafter  only  have the right to use the same
pursuant to the terms of this Agreement.  Manager  represents to Tenant that the
existing FF&E for the Emeryville Hotel is in compliance in all material respects
with System  Standards and is otherwise,  in Manager's best judgment,  adequate,
appropriate  and at  levels  that  are at least  equal  to those  found at other
similarly  situated  hotels  comparable  to the Hotel.  Upon any  expiration  or
termination  of this Agreement  Manager  covenants to convey good and marketable
title to Tenant of any remaining of the existing FF&E for the  Emeryville  Hotel
to Tenant for One Dollar  ($1.00).  The

                                      -25-
<PAGE>

provisions  of Section  5.03.D shall be applicable to the existing FF&E provided
by Manager with respect to the Emeryville Hotel, and the non-recourse provisions
of Section  9.04  hereof  shall not be  applicable  with  respect  to  Manager's
obligation pursuant to this Section 5.09.

         B. (i) Manager shall use commercially reasonable efforts to comply with
the  requirements of the Site Closure Report and Cap Management Plan authored by
Treadwell  and  Rollo on  November  30,  2000  and  approved  by the  California
Department of Toxic Substances Control on December 1, 2000. All costs associated
with and  expenditures  required for compliance with the Site Closure Report and
Cap Management Plan will be Deductions.

                  (ii)  Manager  shall use  commercially  reasonable  efforts to
comply  with  the  requirements  of  the  Third   Implementation   Agreement  to
Disposition  and  Development  Agreement  executed by  Emeryville  Redevelopment
Agency and  Courtyard  Management  Corporation,  dated May 18,  1999.  All costs
associated  with  any  expenditures  required  for  compliance  with  the  Third
Implementation Agreement to Disposition and Development

                                   ARTICLE VI

               INSURANCE, DAMAGE, CONDEMNATION, AND FORCE MAJEURE

         6.01     Insurance.

         A.  Manager  shall at all times  during the Term and at any other times
Manager shall be in  possession of the Hotels,  keep the Hotels and all property
located therein or thereon, insured on behalf of Tenant and Landlord pursuant to
the terms of this  Agreement.  Manager  shall obtain and  maintain,  either with
insurance companies of recognized responsibility or by legally qualifying itself
as a self insurer, a minimum of the following insurance:

              1. "All-risk" property insurance, including insurance against loss
or damage by fire,  vandalism and malicious mischief,  earthquake,  explosion of
steam boilers,  pressure  vessels or other similar  apparatus,  now or hereafter
installed in the Hotels,  with equivalent coverage as that provided by the usual
extended coverage endorsements, in an amount equal to one hundred percent (100%)
of the then full Replacement Cost thereof  excluding  foundations and excavation
(as defined in Section 6.01.C) (except that the foregoing shall not be construed
to require Manager to maintain  earthquake  insurance if the same is unavailable
on commercially  reasonable  terms,  provided Manager gives Tenant prior written
notice  thereof and except  that the amount of  earthquake  insurance  shall not
necessarily  be 100% of the then full  Replacement  Cost  with an agreed  amount
endorsement  and  sufficient  limits  to  avoid  a  co-insurance  penalty.  Such
earthquake  insurance  can be provided  through a blanket  earthquake  insurance
program with limits adequate to protect the regional  aggregate probable maximum
loss for all properties under the blanket program);

                                      -26-
<PAGE>

              2. Business  interruption  and blanket earnings plus extra expense
under a rental  value  insurance  policy or  endorsement  covering  risk of loss
during the  lesser of the first  twelve  (12)  months of  reconstruction  or the
actual  reconstruction  period  necessitated  by  the  occurrence  of any of the
hazards described in subparagraph (a) above, in such amounts as may be customary
for comparable  properties managed or leased by Manager or its Affiliates in the
surrounding area and in an amount  sufficient to prevent Landlord or Tenant from
becoming a co-insurer;

              3. Commercial general liability insurance, including bodily injury
and property  damage (on an occurrence  basis and on a 1973 or 1988 ISO CGL form
or on a form customarily  maintained by similarly  situated  Hotels,  including,
without limitation,  broad form contractual liability,  independent contractor's
hazard  and  completed  operations   coverage,   aggregate  limit  per  location
endorsement)  in an amount not less than Two Million  Dollars  ($2,000,000)  per
occurrence  and umbrella  coverage of all such claims in an amount not less than
Twenty-Three Million Dollars  ($23,000,000) per occurrence  (provided,  however,
that with respect to commercial  general liability  insurance,  Manager will not
self  insure  against  any loss or claim (i) in an amount  more than Ten Million
Dollars  ($10,000,000) unless such self insurance is provided on a fronted basis
through an  insurance  company  meeting  the  requirements  set forth in Section
6.02.D  hereof,  and (ii) Marriott  provides  Tenant with a guaranty in form and
substance  reasonably  satisfactory to Tenant with respect to any claims against
which Manager has self insured;

              4. Flood (if s Hotel is located in whole or in part within an area
identified as an area having special flood hazards and in which flood  insurance
has been made  available  under the National  Flood  Insurance  Act of 1968,  as
amended,  or the Flood  Disaster  Protection  Act of 1973,  as  amended  (or any
successor  acts  thereto))  and such other hazards and in such amounts as may be
available  under  the  National  Flood  Insurance   Program  and  customary  for
comparable properties in the area;

              5.  Worker's  compensation  insurance  coverage  for  all  persons
employed  by Manager at the Hotels  with  statutory  limits and  otherwise  with
limits of and  provisions  in  accordance  with the  requirements  of applicable
local,  state  and  federal  law,  and  employer's  liability  insurance  as  is
customarily carried by similar employers; and

              6. Such additional insurance as may be required, from time to time
by (A) the  Existing  CC&R's in  effect on the date  hereof  and  Future  CC&R's
approved in writing by Manager to the extent such approval is required  pursuant
to Section 8.02 hereof, or (B) Landlord, or (C) any Mortgagee under a Qualifying
Mortgage,  and which, with respect to (B) and (C) above, is reasonably  required
and customarily carried by comparable lodging properties in the area.

         B. The insurance  herein required may be brought within the coverage of
a so-called  blanket  policy or policies of insurance  carried and maintained by
Tenant (to the extent permitted hereby) or Manager,  provided, that such blanket
policies fulfill the requirements contained herein.

                                      -27-
<PAGE>

         C. "Replacement Cost" as used herein, shall mean the actual replacement
cost of the  property  requiring  replacement  from time to time,  including  an
increased cost of  construction  endorsement,  less  exclusions  provided in the
standard form of fire insurance policy. In the event Landlord, Tenant or Manager
believes that the then full  Replacement  Cost has increased or decreased at any
time during the Term, such party, at its own cost,  shall have the right to have
such full Replacement Cost redetermined by an independent  accredited  appraiser
approved by the other parties, which approval shall not be unreasonably withheld
or delayed. The party desiring to have the full Replacement Cost so redetermined
shall  forthwith,  on  receipt of such  determination  by such  appraiser,  give
written notice thereof to the other parties. The determination of such appraiser
shall  be  final  and  binding  on  the  parties  hereto  until  any  subsequent
determination  under this Section 6.01.C and Manager shall forthwith conform the
amount of the insurance  carried to the amount so  determined by the  appraiser.
Such replacement value determination will not be necessary so long as s Hotel is
insured through a blanket replacement value policy.

         D. All policies of insurance  required  under  Section  6.01.A shall be
carried in the name of Manager.  The property  policies  required  under Section
6.01.A.1,  Section 6.01.A.2,  Section 6.01A.4 and Section 6.01.A.6 shall include
Tenant and Landlord as additional  insureds as their  interests may appear.  The
liability  policies  required  under Section  6.01.A.3  shall include Tenant and
Landlord as additional  named  insureds.  Upon notice by Tenant or Landlord,  as
applicable,  Manager  shall  also  have  the  policies  required  under  Section
6.01.A.1,  Section  6.01.A.2,  Section 6.01.A.3 and Section 6.01.A.6 include any
Mortgagee  as an  additional  insured  (or as  Mortgagee,  as  applicable).  Any
property losses  thereunder shall be payable to the respective  parties as their
interests may appear. All insurance policies and endorsements  required pursuant
to this Section 6.01.A.1 through 6.01.A.4 shall be fully paid for, nonassessable
and, except for umbrella, worker's compensation,  flood and earthquake coverage,
shall be issued by insurance  carriers  authorized  to do business in the State,
having a general  policy  holder's  rating of no less than B++ in Best's  latest
rating guide. All such policies  described in Sections 6.01.A.1 through 6.01.A.4
shall  include no deductible  in excess of Two Hundred  Fifty  Thousand  Dollars
($250,000)  (excluding  the insurance in Section  6.01.A.4 and other high hazard
risks,  including,  but not limited to,  earthquake,  flood and  windstorm  with
respect  to which  such  deductibles  shall be in an  amount  as is  customarily
carried by  operators  of similar  facilities).  All loss  adjustments  shall be
payable as provided in Section 6.01.G.  hereof.  All such policies shall provide
Tenant,  Landlord and any Mortgagee  under a Qualifying  Mortgage if required by
the same  thirty  (30) days'  prior  written  notice of any  material  change or
cancellation  of such policy and the property  insurance  policies shall provide
for a waiver of subrogation, to the extent available.

         E.  Manager  shall  deliver  to Tenant  and  Landlord  certificates  of
insurance with respect to all policies so procured and, in the case of insurance
policies about to expire, shall deliver certificates with respect to the renewal
thereof.  All  certificates  of  insurance  provided for under this Section 6.01
shall, to the extent obtainable,  state that the insurance shall not be canceled
or materially changed without at least thirty (30) days' prior written notice to
the certificate holder. In the event Manager shall fail to effect such insurance
as herein required, to pay the premiums therefor, or to deliver,  within fifteen
(15) days of a request  therefor,  such certificates to Tenant or any Qualifying
Mortgage,

                                      -28-
<PAGE>

Tenant shall have the right,  but not the obligation,  to acquire such insurance
and pay the premiums  therefor,  which amounts shall be payable to Tenant,  upon
demand,  as a Deduction,  together with interest  accrued thereon at the Overdue
Rate (which  interest  shall not be a  Deduction,  but shall be paid by Manager)
from the date such payment is made until (but excluding) the date repaid.

         F.  Insurance  premiums and any other costs or expenses with respect to
the insurance or  self-insurance  required under Section 6.01.A.,  including any
Insurance Retention (as defined below),  shall be Deductions.  Such premiums and
costs shall be allocated on an equitable basis to the hotels participating under
Manager's blanket insurance or self-insurance  programs.  Any reserves,  losses,
costs or  expenses  (including  any  deductibles)  which are not  required to be
insured and are not insured shall be treated as a cost of insurance and shall be
Deductions,  and claims which are required to be insured against,  to the extent
not so insured, and over and above any deductible permitted hereunder,  shall be
paid by  Manager  at its own  costs and  expense  and not as a  Deduction.  Upon
Termination,  an  escrow  fund in an  amount  acceptable  to  Manager  based  on
actuarial loss  projections  for Hotels in the System shall be established  from
Gross  Revenues  and  used by  Manager  to cover  the  amount  of any  Insurance
Retention  and all other costs which will  eventually  have to be paid by either
Tenant or Manager with respect to pending or contingent claims,  including those
which arise  after  Termination  for causes  arising  during the Term.  If Gross
Revenues are  insufficient  to meet the  requirements  of such escrow fund, then
Tenant shall deliver to Manager, within ten (10) days after receipt of Manager's
written request therefor,  the sums necessary to establish such escrow fund; and
if Tenant fails to timely  deliver such sums to Manager,  Manager shall have the
right (without  affecting  Manager's  other  remedies  under this  Agreement) to
withdraw the amount of such expenses from Working Capital  provided by Tenant or
any other  funds of Tenant  held by or under the  control  of Manager or held by
Marriott under the Pooling  Agreement and available to pay Aggregate  Deductions
(as defined in the Pooling  Agreement).  For  purposes of this  Section  6.01.F,
"Insurance  Retention"  shall  mean  the  amount  of any loss or  reserve  under
Manager's blanket insurance or self-insurance programs which is allocated to the
Hotel,  not to  exceed  the  higher  of (A) the  maximum  per  occurrence  limit
established  for  similar  hotels  participating  in such  programs,  or (B) the
insurance  policy  deductible  on any loss  which may fall  within  high  hazard
classifications as mandated by the insurer (e.g.,  earthquake,  flood, windstorm
on coastal properties,  etc.). If the Hotel is not a participant under Manager's
blanket insurance or self-insurance  programs,  "Insurance Retention" shall mean
the amount of any loss or  reserve  allocated  to the  Hotel,  not to exceed the
insurance policy deductible.

         G. Except as provided in the last clause of this sentence, all proceeds
payable by reason of any loss or damage to a Hotel, or any portion thereof,  and
insured under any policy of property  insurance required by Section 6.01.A.1 and
Section  6.01.A.4,   inclusive,   (other  than  the  proceeds  of  any  business
interruption  insurance  under Section  6.01.A.2 and liability  insurance  under
Section  6.01.A.3) shall be paid directly to Landlord as its interest may appear
(subject  to the  provisions  of  Section  6.02) and all loss  adjustments  with
respect to losses  payable to Tenant shall require the prior written  consent of
Landlord; provided, however, that so long as no event of default under the Lease
or under this Agreement shall have occurred or be continuing,  all such proceeds

                                      -29-
<PAGE>

less than or equal to Five Hundred  Thousand  Dollars  ($500,000)  shall be paid
directly to Manager and such losses may be adjusted without Landlord's  consent.
If Tenant is required to reconstruct or repair a Hotel as provided herein,  such
proceeds  shall be paid out by  Landlord  from  time to time for the  reasonable
costs of  reconstruction  or repair of the Hotel  necessitated by such damage or
destruction,  subject to and in accordance  with the provisions of Section 6.02.
Any excess proceeds of insurance shall be distributed as Operating  Profit under
the provisions of Section 3.02.B hereof, provided that the amount of such excess
proceeds of  insurance  shall not be  included  in Gross Room  Revenues or Gross
Revenues for the  purposes of  calculating  the System Fee, the Base  Management
Fee, the First Incentive Management Fee and the Second Incentive Management Fee.
In the event that the provisions of Section 6.02.A are applicable, the insurance
proceeds  shall be retained by the party  entitled  thereto  pursuant to Section
6.02.A. All salvage resulting from any risk covered by insurance shall belong to
Landlord, provided any rights to the same have been waived by the insurer.

         H.  Insofar as and to the extent that such  agreement  may be effective
without  invalidating or making it impossible to secure insurance  coverage from
responsible  insurance companies doing business in the State with respect to any
insurance then being carried by Manager,  Tenant or Landlord, the party carrying
such insurance or suffering said loss releases  Manager,  Tenant and Landlord of
and from any and all claims  with  respect  to such loss and such party  further
agrees that any insurance  companies shall have no right of subrogation  against
Tenant,  Landlord or Manager on account  thereof,  even though extra premium may
result therefrom.  In the event that any extra premium is payable by Tenant as a
result of this provision,  the same shall be paid from Gross Revenues or Working
Capital as a Deduction.

         I. Manager shall not take out separate insurance, concurrent in form or
contributing  in the event of loss with that  required  by this  Article  VI, or
increase the amount of any existing  insurance by securing an additional  policy
or  additional  policies,  which may diminish  the  proceeds  which will be paid
pursuant to the policies  required by this Article VI, unless all parties having
an insurable interest in the subject matter of such insurance, including Tenant,
Landlord and all Mortgagees, are included therein as additional insureds and the
loss is payable  under such  insurance  in the same manner as losses are payable
under this policies required by this Article VI. In the event Manager shall take
out any such  separate  insurance  or  increase  any of the  amounts of the then
existing  insurance as described in the preceding  sentence,  Manager shall give
prompt notice to Tenant thereof.

         6.02     Damage and Repair.

         A. If,  during the Term with respect to any Hotel,  such Hotel shall be
totally or partially  destroyed and the Hotel is thereby rendered Unsuitable for
Its Permitted Use, (1) Manager may terminate this Agreement with respect to such
Hotel by sixty (60) days written  notice to Tenant and  Landlord,  or (2) if the
Lease has been terminated as a result of such casualty, the Tenant may terminate
this  Agreement  with  respect to such Hotel by  written  notice to Manager  and
Landlord,  whereupon,  this Agreement and the Lease, with

                                      -30-
<PAGE>

respect to such Hotel,  shall terminate and Landlord shall be entitled to retain
the insurance proceeds payable on account of such damage.

         B. If, during the Term with respect to any Hotel, such Hotel is damaged
or destroyed by fire, casualty or other cause but is not rendered Unsuitable for
Its Permitted Use and the Lease is not  terminated in accordance  with its terms
with respect to such Hotel, Tenant shall,  subject to Sections 6.02.C and 6.02.D
below,  provided there is then no Manager Default,  forward to Manager the funds
necessary to repair or replace the damaged or destroyed  portion of the Hotel to
the same  condition as existed  previously  and Manager  shall have the right to
discontinue  operating the Hotel to the extent it deems necessary to comply with
applicable law, ordinance,  regulation or order or as necessary for the safe and
orderly operation of the Hotel.

         C. If the cost of the repair or restoration of a Hotel is less than the
sum of the deductible plus the amount of insurance proceeds received by Landlord
or Tenant, Tenant shall be required to make available the funds necessary (minus
the amount of such  deductible)  to cause such Hotel to be repaired and restored
to the extent insurance  proceeds are made available by Landlord for such repair
and restoration.  The amount of such deductible shall be funded first,  from the
Reserve for the applicable hotel, and to the extent such Reserve is insufficient
therefor,  the balance shall be funded by Tenant, and any such funding by Tenant
shall result in an  adjustment to Tenant's  First  Priority with respect to such
Hotel as if Tenant had made a lump sum deposit  into the Reserve for such Hotel,
in the manner set forth in the  definition of Tenant's First  Priority,  and the
Addendum applicable to such Hotel shall be revised in accordance  therewith.  If
the cost of the  repair or  restoration  of such  Hotel  exceeds  the  amount of
insurance  proceeds received by Landlord,  plus the deductible  amount,  Manager
shall give notice to Tenant and Landlord setting forth in reasonable  detail the
nature of such deficiency,  and Tenant shall promptly  thereafter advise Manager
in writing  whether  Tenant  shall pay and assume the amount of such  deficiency
(Tenant  having no  obligation  to do so,  except that, if Tenant shall elect to
make such funds  available,  the same shall become an irrevocable  obligation of
Tenant).  In the event  Tenant  shall  elect not to pay and assume the amount of
such  deficiency,  Landlord  shall  have the  right  (but  not the  obligation),
exercisable at Landlord's sole election by written notice to Tenant and Manager,
given within sixty (60) days after Manager's notice of the deficiency,  to elect
to make  available  for  application  to the cost of repair or  restoration  the
amount of such  deficiency.  In the event that neither Landlord nor Tenant shall
elect to make such deficiency available for restoration,  (1) Manager may effect
Termination  of this  Agreement  with respect to such Hotel by written notice to
Tenant and Landlord or (2) if the Lease has been terminated with respect to such
Hotel as a result of such casualty,  the Tenant may effect a Termination of this
Agreement  with respect to such Hotel by written notice to Manager and Landlord,
whereupon, this Agreement shall terminate with respect to such Hotel as provided
in Section  6.02.A.  Except  for  deductibles  which are  addressed  above,  any
reserves,  losses,  costs or  expenses  which are  uninsured  (and which are not
required to be insured hereunder) and which are not self-insured hereunder shall
be treated as a cost of insurance and shall be Deductions.

         D. In the  event  Tenant  is  required  to  make  available  the  funds
necessary to restore a Hotel,  Tenant shall  promptly do so and such funds shall
be used to perform the

                                      -31-
<PAGE>

repair and restoration of such Hotel (hereinafter  called the "Work"),  so as to
restore such Hotel in compliance  with all Legal  Requirements  and so that such
Hotel shall be, to the extent practicable, substantially equivalent in value and
general  utility to its  general  utility  and value  immediately  prior to such
damage or  destruction  and in  compliance  with System  Standards and Operating
Standards.  Manager shall,  at Tenant's  request,  provide  general  supervisory
services  with  respect  to  completion  of such  work  as part of the  services
provided  hereunder in  consideration  of the  management  fees paid to Manager,
however,  Manager shall not be obligated to provide  additional  secure services
unless  Tenant and Manager  enter into  separate  arrangements  to provide  such
services and for stated  additional  consideration.  Subject to the terms of the
Lease,  Landlord shall advance the insurance proceeds and any additional amounts
payable by Landlord  pursuant to this Section 6.02.D to Tenant  regularly during
the repair and  restoration  period so as to permit  payment for the cost of any
such  restoration  and  repair.  Any such  advances  shall be made not more than
monthly within ten (10) Business Days after Tenant submits to Landlord a written
requisition and  substantiation  therefor on AIA Forms G702 and G703 (or on such
other form or forms as may be reasonably acceptable to Landlord).  Landlord may,
at its  option,  condition  advancement  of said  insurance  proceeds  and other
amounts on (i) the  absence of an "Event of Default"  under the Lease,  (ii) its
approval of plans and  specifications  of an architect  satisfactory to Landlord
(which  approval shall not be unreasonably  withheld or delayed),  (iii) general
contractors' estimates,  (iv) architect's  certificates,  (v) unconditional lien
waivers of general contractors,  if available,  (vi) evidence of approval by all
governmental  authorities and other regulatory bodies whose approval is required
and (vii) such other certificates as Landlord may, from time to time, reasonably
require.

         E.  All  business  interruption  insurance  proceeds  shall  be paid to
Manager and included in Gross Revenues.  Any casualty which does not result in a
Termination of this  Agreement  with respect to the  applicable  Hotel shall not
excuse the payment of sums due to Tenant hereunder with respect to such Hotel.

         F. Manager hereby waives any statutory rights of termination  which may
arise by reason of any damage to or destruction of any Hotel.

         G. Special Provisions  Applicable to Hotels in the States of California
or Washington.

         (a) With respect to any Hotels  located in the States of  California or
Washington, the following shall apply: Notwithstanding any provisions of Section
6.02 or 6.03 to the  contrary,  if (x) Material  Earthquake  Damage to any Hotel
occurs and (y) Manager was not required to maintain  earthquake  insurance  with
respect to such Hotel pursuant to Section 6.01, Manager shall have the right, by
the giving of written  notice to Tenant within sixty (60) days after the date of
earthquake,  to effect a  Termination  of this  Agreement  with  respect  to the
affected Hotel (which Termination shall not be deemed due to a Manager Default),
this Agreement shall terminate with respect to such Hotel as of the date of such
earthquake,  provided that Manager shall pay to Tenant, on or before the date of
giving such  written  notice,  an amount equal to the lesser of (i) the Tenant's
First  Priority for such Hotel  payable for the balance of the  applicable  Term
(without

                                      -32-
<PAGE>

giving  effect to such  termination  but after  giving  effect to any  exercised
Renewal Term) and (ii) the  "Purchase  Price" for such Hotel as set forth in the
Purchase and Sale Agreement applicable to such Hotel, which payment may be made,
at Manager's request, by application thereto of funds held by Tenant pursuant to
the Holdback Agreement.

         (b) For purposes of this Section 6.02.G,  "Material  Earthquake Damage"
shall mean damage or  destruction  of a Hotel  resulting  from  earthquake,  the
repair or  restoration  of which  will cost in excess of an amount  equal to One
Million Five Hundred Thousand Dollars ($1,500,000) multiplied by a fraction, the
denominator  of which shall be the Index for the nearest month prior to the date
on which Landlord  acquired its interest in the Hotel and the numerator of which
shall be the Index for the nearest month prior to the date of such earthquake.

         (c) It is expressly  understood  and agreed that,  in the event Manager
elects or is required to repair any damage or destruction  to a Hotel  resulting
from  earthquake and as to which Manager was not required to maintain  insurance
pursuant  to Section  6.01  hereof or as to which  Manager  maintained  coverage
pursuant  to  Section  6.01  hereof but the  proceeds  thereof  are  inadequate,
provided  that not less than five full years remain in the Term  (including  any
exercised Renewal Terms),  Manager may use funds from the Reserve for such Hotel
to pay for the  restoration  and repair  costs and  Landlord and Tenant shall be
required  to  disburse  additional  funds  subject  to and  upon the  terms  and
conditions of Section 5.07 hereof.

         6.03 Damage Near End of Term. Notwithstanding any provisions of Section
6.01 or 6.02 hereof to the contrary  (but subject to the  provisions  of Section
6.02.G  above),  if damage to or destruction of any Hotel occurs during the last
twelve (12) months of the then Term  (including any exercised  Renewal Term) and
if such damage or destruction cannot reasonably be expected to be fully repaired
and restored  prior to the date that is nine (9) months prior to the end of such
Term  (including any exercised  Renewal Term),  the provisions of Section 6.02.A
shall apply as if such Hotel had been  totally or partially  destroyed  and such
Hotel operated thereon rendered Unsuitable for its Permitted Use.

         6.04 Tenant's  Option to Obtain Certain  Insurance.  Tenant may, at its
option,  from time to time by written notice to Manager which shall be delivered
no later than sixty (60) days prior to the natural  expiration  of the insurance
policies  which  Manager has  obtained  pursuant to Section  6.01.A.1,  2 and 4,
procure and maintain the insurance  specified in Section  6.01.A.1,  2 and 4 (in
which case  Manager  shall  allow such  policies  obtained  by it under  Section
6.01.A.1, 2 and 4 to expire), subject to the following terms and conditions:

         A. All  policies of  insurance  shall be carried in the name of Tenant,
with Manager as an additional  insured.  Any property losses thereunder shall be
payable to the respective parties as their interests may appear.

                                      -33-
<PAGE>

         B.  Tenant  shall  deliver  to Manager  and  Landlord  certificates  of
insurance with respect to all policies so procured and, in the case of insurance
policies about to expire, shall deliver certificates with respect to the renewal
thereof.

         C. All such certificates of insurance shall, to the extent  obtainable,
state that the insurance shall not be canceled or materially  changed without at
least thirty (30) days' prior written notice to the certificate holder.

         D. Premiums for such insurance coverage shall be treated as Deductions,
provided that if the cost of such insurance  procured by Tenant exceeds the cost
of Manager's comparable coverage by more than ten percent (10%), all such excess
costs shall be the sole responsibility of Tenant and shall not be a Deduction.

         E. Should  Tenant  exercise its option to procure any of the  insurance
described in this Section 6.04, Tenant hereby waives its rights of recovery from
Manager or any of its  Affiliates  (and their  respective  directors,  officers,
shareholders,  agents and  employees)  for loss or damage to any Hotel,  and any
resultant  interruption  of  business,  resulting  from an  occurrence  or event
covered by the insurance so procured by Tenant.

         F. Should Tenant exercise its rights to obtain the insurance  described
in this Section 6.04,  Tenant  acknowledges  that until Tenant gives Manager not
less than sixty (60) days advance notice that Tenant is rescinding such exercise
Manager is under no obligation to thereafter  include such Hotels in its blanket
insurance program (with respect to the coverage described in Section 6.01.A.1, 2
and 4) for the balance of the Term of this Agreement.  However, upon a Sale of a
Hotel, a successor  Tenant shall have the right,  notwithstanding  the fact that
the previous Tenant may have obtained  insurance in accordance with this Section
6.04,  to have such  Hotel  included  in  Manager's  blanket  insurance  program
(provided  that such Hotel,  as of that point in time,  satisfies the applicable
criteria  for  admission  to  such  program,  as  established  by the  program's
insurance  carriers) by making a written  request to Manager for such  inclusion
not later than thirty  (30) days after the date of which such party  becomes the
Tenant.

         G. All insurance  procured by Tenant  hereunder  shall be obtained from
reputable  insurance  companies  reasonably  acceptable  to  Manager  and  shall
otherwise comply with the provisions of this Article VI.

         6.05 Condemnation. If either (i) the whole of a Hotel shall be taken by
Condemnation,  or (ii) a Condemnation  of less than the whole of a Hotel renders
such Hotel  Unsuitable for Its Permitted Use, this Agreement shall terminate and
Tenant and  Landlord  shall seek the Award for their  interests in such Hotel as
provided in the Lease.  In  addition,  Manager  shall have the right to initiate
such  proceedings as it deems  advisable to recover any damages to which Manager
may be entitled; provided, however, that Manager shall be entitled to retain the
award or compensation it may obtain through such proceedings which are conducted
separately  from those of Tenant and Landlord only if such award or compensation
does not  reduce the award or  compensation  otherwise  available  to Tenant and
Landlord.  For this purpose, any award or

                                      -34-
<PAGE>

compensation  received by any holder of a Mortgage on a Hotel shall be deemed to
be an award of compensation received by Landlord.

         6.06 Partial Condemnation.  In the event of a Condemnation of less than
the whole of a Hotel such that such  Hotel is not  rendered  Unsuitable  for Its
Permitted  Use,  Manager  shall,  to the extent of the Award and any  additional
amounts  disbursed  by Tenant or  Landlord  as  hereinafter  provided,  commence
promptly and continue diligently to restore the untaken portion of such Hotel so
that such  Hotel  shall  constitute  a complete  architectural  unit of the same
general  character  and  condition  (as  nearly  as may be  possible  under  the
circumstances)  as the Hotel located thereon existing  immediately prior to such
Condemnation,  in full  compliance with all Legal  Requirements,  subject to the
provisions of this Section 6.06.  Manager shall,  at Tenant's  request,  provide
general supervisory  services with respect to completion of such work as part of
the services provided  hereunder in consideration of the management fees paid to
Manager,  however, Manager shall not be obligated to provide additional services
unless  Tenant and Manager  enter into  separate  arrangements  to provide  such
services and for stated additional  consideration.  If the cost of the repair or
restoration  of the Hotel  exceeds the amount of the Award,  Manager  shall give
Landlord  and Tenant  written  notice  thereof,  which notice shall set forth in
reasonable  detail the nature of such  deficiency,  and  Tenant  shall  promptly
thereafter  advise  Manager in writing  whether  Tenant  will pay and assume the
amount of such deficiency  (Tenant having no obligation to do so, except that if
Tenant  shall  elect to make such  funds  available,  the same  shall  become an
irrevocable  obligation  of Tenant  pursuant  to this  Agreement).  In the event
Tenant shall elect not to pay and assume the amount of such deficiency, Landlord
shall have the right (but not the  obligation),  exercisable at Landlord's  sole
election  by Notice to Tenant and  Manager  given  within  sixty (60) days after
Tenant's notice of the deficiency, to elect to make available for application to
the cost of repair or restoration  the amount of such  deficiency.  In the event
neither  Landlord nor Tenant shall elect to make such  deficiency  available for
restoration,  either Manager or Tenant may terminate this Agreement with respect
to such Hotel.

         6.07  Disbursement  of Award.  Subject to the terms  hereof,  Tenant or
Landlord,  as applicable,  shall contribute to the cost of restoration that part
of the Award  necessary to complete  such repair or  restoration,  together with
severance and other damages awarded for such Hotel and any deficiency  Tenant or
Landlord, as applicable, has agreed to disburse, to Manager regularly during the
restoration  period  so as to  permit  payment  for the cost of such  repair  or
restoration.  Landlord may, at its option,  condition  advancement of such Award
and other amounts on (i) the absence of any Event of Default,  (ii) its approval
of plans and  specifications  of an architect  satisfactory  to Landlord  (which
approval  shall  not  be  unreasonably  withheld  or  delayed),   (iii)  general
contractors' estimates,  (iv) architect's  certificates,  (v) unconditional lien
waivers of general contractors,  if available,  (vi) evidence of approval by all
governmental authorities and other regulatory bodies whose approval is required,
and (vii) such other certificates as Landlord may, from time to time, reasonably
require.  Landlord's and Tenant's obligation under this Section 6.07 to disburse
the Award and such other amounts shall be subject to (x) the collection  thereof
by Landlord  and (y) the  satisfaction  of any  applicable  requirements  of any
Qualifying Mortgage,  and the release of such Award by the

                                      -35-
<PAGE>

applicable Mortgagee.  Tenant's obligation to restore the applicable Hotel shall
be subject to the release of the Award to Landlord by the  applicable  Mortgagee
under a Qualifying Mortgage.

         6.08 Temporary Condemnation. In the event of any temporary Condemnation
of a Hotel or Tenant's interest  therein,  this Agreement shall continue in full
force  and  effect.  The  entire  amount of any  Award  made for such  temporary
Condemnation  allocable  to the Term,  whether  paid by way of damages,  rent or
otherwise,  shall be paid to Manager and shall constitute Gross Revenues. Tenant
shall,   promptly  upon  the   termination  of  any  such  period  of  temporary
Condemnation,  at its sole cost and expense, restore such Hotel to the condition
that existed immediately prior to such Condemnation, in full compliance with all
Legal  Requirements,  unless such period of temporary  Condemnation shall extend
beyond the  expiration  of the Term, in which event Tenant shall not be required
to make such  restoration.  For  purposes of this Section  6.08, a  Condemnation
shall be deemed  to be  temporary  if the  period  of such  Condemnation  is not
expected to, and does not, exceed twelve (12) months.

         6.09  Allocation  of Award.  Except as  provided  in  Section  6.07 and
Section 6.08 and the second and third  sentences of this Section 6.09, the total
Award shall be solely the  property of and payable to  Landlord.  Any portion of
the Award made for the taking of Tenant's leasehold interest in a Hotel, loss of
business,  the taking of Tenant's  Personal  Property,  or Tenant's  removal and
relocation  expenses shall be the sole property of, and payable to, Tenant.  Any
portion  of the Award made for the taking of  Manager's  interest  in a Hotel or
Manager's loss of business  during the remainder of the Term hereof shall be the
sole property of, and payable to, Manager,  subject to the provisions of Section
6.05 hereof.  In any Condemnation  proceedings,  Landlord,  Tenant,  and Manager
shall each seek its own Award in conformity herewith, at its own expense.

         6.10 Effect of Condemnation.  Any condemnation which does not result in
a Termination of this Agreement in accordance with its terms with respect to the
applicable  Hotel shall not excuse the  payment of sums due to Tenant  hereunder
with  respect to such Hotel and this  Agreement  shall  remain in full force and
effect.

                                   ARTICLE VII

                              TAXES; OTHER CHARGES

         7.01     Real Estate and Personal Property Taxes.

         A. Subject to Section  11.23  relating to permitted  contests,  Manager
shall pay, from Gross Revenues for each Hotel,  all Impositions  with respect to
such  Hotel,  before  any  fine,  penalty,  interest  or cost  (other  than  any
opportunity  cost as a result of a failure to take advantage of any discount for
early payment) may be added for  non-payment,  such payments to be made directly
to the taxing  authorities  where feasible,  and shall  promptly,  upon request,
furnish to Landlord and Tenant copies of official  receipts or other  reasonably
satisfactory  proof  evidencing  such  payments.  Any such  payments  shall be a
Deduction in determining Operating Profit for such Hotel. If any such Imposition

                                      -36-
<PAGE>

may, at the option of the taxpayer, lawfully be paid in installments (whether or
not interest shall accrue on the unpaid balance of such Imposition), Manager may
exercise  the  option to pay the same (and any  accrued  interest  on the unpaid
balance of such Imposition) in installments  and, in such event,  shall pay such
installments  during  the Term as the  same  become  due and  before  any  fine,
penalty,  premium, further interest or cost may be added thereto. Manager shall,
upon request,  provide such data as is maintained by Manager with respect to any
Hotel as may be  necessary  to  prepare  any  required  returns  and  reports by
Landlord or Tenant.

         Tenant shall give, and will use reasonable efforts to cause Landlord to
give,  copies of official  tax bills and  assessments  which it may receive with
respect to any Hotel and prompt notice to Tenant and Manager of all  Impositions
payable by Tenant under the Lease of which  Tenant or Landlord,  as the case may
be, at any time has knowledge;  provided,  however,  that Landlord's or Tenant's
failure to give any such notice  shall in no way diminish  Manager's  obligation
hereunder  to  pay  such  Impositions   (except  that  Landlord  or  Tenant,  as
applicable,  shall be  responsible  for any interest or penalties  incurred as a
result of Landlord's or Tenant's, as applicable, failure promptly to forward the
same).

         B. The word "Impositions" as used in this Agreement shall include,  but
not be limited to,  franchise taxes under the laws of the State of Tennessee and
gross receipt or general excise taxes or sales taxes payable on (i) Rent payable
to Landlord,  (ii) all sums payable to Tenant pursuant to this Agreement (or the
Pooling  Agreement  with  respect to Hotels to which the  Pooling  Agreement  is
applicable), and (iii) all sums payable to Manager pursuant to this Agreement as
System  Fees or  management  fees (or  pursuant to the  Pooling  Agreement  with
respect to Hotels to which the Pooling  Agreement  is  applicable),  if any, but
shall not include the following,  all of which shall be paid from the applicable
Reserve, and not from Gross Revenues:

              1. Special assessments (regardless of when due or whether they are
paid as a lump sum or in  installments  over time) imposed because of facilities
which  are  constructed  by or on  behalf  of the  assessing  jurisdiction  (for
example, roads, sidewalks,  sewers,  culverts,  etc.) which directly benefit the
Hotel  (regardless of whether or not they also benefit other  buildings),  which
assessments  shall  be  treated  as  capital  costs of  construction  and not as
Deductions;  provided,  however,  (a) such  amounts  shall be paid by Manager if
Manager is required to do so under the Purchase and Sale  Agreement or Agreement
to Lease,  and (b) such amounts shall be paid as a Deduction if such assessments
were  reflected in the pro forma  budgets  prepared by Manager and  delivered to
Landlord and Tenant prior to the date of execution and delivery of the Agreement
to Lease; and

              2. "Impact Fees"  (regardless of when due or whether they are paid
as a lump sum or in installments over time) which are required as a condition to
the issuance of site plan approval,  zoning variances or building permits, which
impact  fees  shall be  treated  as  capital  costs of  construction  and not as
Deductions.

                                      -37-
<PAGE>

         C. Notwithstanding  anything herein to the contrary, each of Tenant and
Manager  shall pay from its own funds (and not from Gross  Revenues of any Hotel
or any Reserve)  any  franchise,  corporate,  estate,  inheritance,  succession,
capital levy or transfer tax imposed on Tenant or Manager, as applicable, or any
income tax imposed (but not gross receipt or general excise taxes) on any income
of Tenant or Manager (including  distributions to Tenant pursuant to Article III
hereof).

         D. Manager  shall cause to be paid,  with  respect to each Hotel,  when
due, from Gross  Revenues,  as Deductions,  for such Hotel, to the extent of the
sufficiency of funds available therefore:

              1. Utility Charges - all charges for electricity, power, gas, oil,
water and other utilities used in connection with each Hotel.

              2.  Insurance  Premiums - all premiums for the insurance  coverage
required to be maintained pursuant to Section 6.01 hereof.

              3. Other Charges - all other amounts,  liabilities and obligations
arising in connection with the operation of each Hotel except those  obligations
expressly  assumed by Landlord  or Tenant  pursuant  to the  provisions  of this
Agreement or any of the Incidental  Documents or expressly stated not to be paid
from Gross Revenues of a Hotel pursuant to this Agreement.

                                  ARTICLE VIII

                             OWNERSHIP OF THE HOTELS

         8.01     Ownership of the Hotels.

         A. Tenant hereby covenants that it will not hereafter impose or consent
to the  imposition  of any  liens,  encumbrances  or other  charges,  except  as
follows:

              1. easements or other  encumbrances  that do not adversely  affect
the  operation  of a Hotel by Manager  and that are not  prohibited  pursuant to
Section 8.02 of this Agreement;

              2. mortgages  which  constitute  Qualifying  Mortgages and related
security instruments;

              3. liens for taxes,  assessments,  levies or other public  charges
not yet due or due but not yet payable; or

              4.  equipment  leases  for  office  equipment,   telephone,  motor
vehicles and other property approved by Manager.

         B.  Subject to liens  permitted  to Section  8.01.A  hereof and further
subject  to liens  permitted  to be placed  by  Landlord  pursuant  to the Owner
Agreement,  Tenant

                                      -38-
<PAGE>

covenants  that, so long as there is no Manager  Default  under this  Agreement,
Manager  shall  quietly hold,  occupy and enjoy the Hotels  throughout  the Term
hereof free from  hindrance,  ejection or  molestation  by Tenant or Landlord or
other party claiming  under,  through or by right of Tenant or Landlord.  Tenant
agrees to pay and  discharge  any payments  and charges and, at its expense,  to
prosecute all appropriate  actions,  judicial or otherwise,  necessary to assure
such free and quiet occupation as set forth in the preceding sentence.

         8.02     No Covenants, Conditions or Restrictions.

         A. Tenant  covenants that, as of the Effective Date and during the Term
of this Agreement with respect to each Hotel, Tenant will not enter into (unless
Manager has given its prior written consent thereto,  which consent shall not be
unreasonably  withheld,  conditioned  or delayed) any  covenants,  conditions or
restrictions,   including   reciprocal   easement   agreements  or  cost-sharing
arrangements (collectively referred to as "Future CC&R's") affecting any Site or
Hotel (i) which would  prohibit or limit  Manager from  operating  such Hotel in
accordance with System Standards,  including related amenities of such Hotel; or
(ii) which would allow such Hotel facilities (for example, parking spaces) to be
used by persons  other than guests,  invitees or  employees of such Hotel.  With
respect to each Hotel, Manager hereby consents to (a) any easements,  covenants,
conditions or restrictions, including without limitation any reciprocal easement
agreements or cost-sharing agreements, existing as of the date Landlord acquired
title to such Hotel,  and (b) any of the  foregoing  items with  respect to such
Hotel  existing as of the date hereof and of which Manager has knowledge (all of
the foregoing, collectively, the "Existing CC&R's").

         B. All financial  obligations  imposed on Tenant or on a Hotel pursuant
to any Future  CC&R's for which  Manager's  consent is  required  under  Section
8.02.A  above  shall be paid by Tenant  from its own  funds,  and not from Gross
Revenues of a Hotel or from the Reserve of a Hotel, unless Manager has given its
prior written consent to such Future CC&R's as required under Section 8.02.A.

         C. Manager  shall  manage,  operate,  maintain and repair each Hotel in
compliance  with all  obligations  imposed  on  Tenant,  Landlord  or such Hotel
pursuant to any Existing  CC&R's or Future CC&R's (unless the Manager's  consent
is required  for such Future  CC&R's and Manager does not consent to such Future
CC&R's) to the extent  such  Existing  CC&R's  and Future  CC&R's  relate to the
management, operation, maintenance and repair of such Hotel.

         8.03  Liens;   Credit.   Manager  and  Tenant  shall  use  commercially
reasonable efforts to prevent any liens from being filed against any Hotel which
arise from any  maintenance,  repairs,  alterations,  improvements,  renewals or
replacements  in or to such Hotels.  They shall cooperate and Tenant shall cause
the Landlord to cooperate fully in obtaining the release of any such liens,  and
the cost thereof,  if the lien was not occasioned by the fault of a party, shall
be treated the same as the cost of the matter to which it  relates.  If the lien
arises as a result of the fault of a party,  then the party at fault  shall bear
the cost of obtaining the lien release. In no event shall any party borrow money
in the

                                      -39-
<PAGE>

name of, or pledge the credit of, any other party.  Manager  shall not allow any
lien to exist with respect to its interest in this Agreement.

         Subject to the right to  contest  matters  set forth in  Section  11.23
hereof and for encumbrances  permitted under Section 8.01 hereof,  Manager shall
not,  to the  extent  funds to pay the same are  provided  on a timely  basis as
required hereunder,  directly or indirectly, create or allow to remain and shall
promptly discharge any lien, encumbrance,  attachment, title retention agreement
or claim upon any Hotel,  except (a) existing  liens for those taxes of Landlord
which Manager is not required to pay hereunder, (b) liens for Impositions or for
sums resulting from  noncompliance  with Legal  Requirements  so long as (i) the
same are not yet due and payable, or (ii) are being contested in accordance with
Section  11.23,  (c) liens of  mechanics,  laborers,  materialmen,  suppliers or
vendors  incurred in the  ordinary  course of business  that are not yet due and
payable or are for sums that are being  contested  in  accordance  with  Section
11.23 and (d) any  Mortgages  or other  liens  which are the  responsibility  of
Landlord.

                                   ARTICLE IX

                                    DEFAULTS

         9.01 Manager Events of Default.  Each of the following shall constitute
a "Manager Event of Default" to the extent permitted by applicable law:

         A. The filing by Manager  of a  voluntary  petition  in  bankruptcy  or
insolvency or a petition for  reorganization  under any  bankruptcy  law, or the
admission  by Manager  that it is unable to pay its debts as they become due, or
the institution of any proceeding by Manager for its dissolution or termination.
Upon the  occurrence  of any Manager  Event of Default as  described  under this
Section  9.01.A,  said  Manager  Event of  Default  shall be  deemed a  "Manager
Default" under this Agreement.

         B. The consent by Manager to an  involuntary  petition in bankruptcy or
the failure to vacate,  within ninety (90) days from the date of entry  thereof,
any order approving an involuntary  petition by Manager.  Upon the occurrence of
any  Manager  Event of Default as  described  under this  Section  9.01.B,  said
Manager  Event  of  Default  shall be  deemed a  "Manager  Default"  under  this
Agreement.

         C. The  entering  of an  order,  judgment  or  decree  by any  court of
competent jurisdiction,  on the application of a creditor,  adjudicating Manager
as bankrupt or  insolvent  or  approving a petition  seeking  reorganization  or
appointing a receiver,  trustee,  or liquidator of all or a substantial  part of
Manager's assets, and such order,  judgment or decree's  continuing unstayed and
in effect for an aggregate of sixty (60) days (whether or not consecutive). Upon
the  occurrence of any Manager Event of Default as described  under this Section
9.01.C,  said Manager Event of Default shall be deemed a "Manager Default" under
this Agreement.

         D. The  failure of Marriott  or Manager or any  Affiliate  of either of
them to make any  payment  required to be made in  accordance  with the terms of
this Agreement,

                                      -40-
<PAGE>

or any Incidental Document on or before the date due. Upon the occurrence of any
Manager Event of Default as described  under this Section  9.01.D,  said Manager
Event of Default  shall be deemed a "Manager  Default"  under this  Agreement if
Marriott  or  Manager  or such  Affiliate  fails to cure such  Manager  Event of
Default (1) within any applicable  notice and cure period,  if any,  provided in
the  document  pursuant to which such payment is to be made,  or (2)  otherwise,
eight (8) days  after  receipt of written  notice  from the other  party to such
document demanding such cure.

         E. The  failure of Marriott  or Manager or any  Affiliate  of either of
them to  perform,  keep or  fulfill  any of the other  covenants,  undertakings,
obligations  or  conditions  set forth in this  Agreement  or in any  Incidental
Document on or before the date required for the same. Upon the occurrence of any
Manager Event of Default as described  under this Section  9.01.E,  said Manager
Event of Default  shall be deemed a "Manager  Default"  under this  Agreement if
Marriott  or  Manager  or such  Affiliate  fails to cure such  Manager  Event of
Default  within  thirty  (30) days after  receipt of written  notice from Tenant
demanding such cure, or, if the Manager Event of Default is suscpetible of cure,
but such cure cannot be accomplished within said thirty (30) day period of time,
if Marriott  or Manager or such  Affiliate  fails to  commence  the cure of such
Manager Event of Default  within  fifteen (15) days of such notice or thereafter
fails to diligently pursue such efforts to completion.

         F. The failure of Manager to maintain  insurance  coverages required to
be maintained by Manager under Article VI hereof (excluding insurance maintained
by Tenant pursuant to Section 6.04 hereof),  and such failure shall constitute a
Manager  Default  hereunder  if it  continues  for eight (8) days after  written
notice  thereof from Tenant (except that no notice shall be required if any such
insurance coverage shall have lapsed).

         G. Any  material  representation  or  warranty  made by  Manager or any
Affiliate in this  Agreement or in any Incidental  Document  proves to have been
false in any material respect on the date when made or deemed made, and the same
shall  constitute a Manager  Default if Manager fails to cure or change the fact
or event which  caused such  representation  or warranty to have been false when
made or deemed made within  fifteen (15)  Business  Days of receiving  notice of
such  falseness  from  Tenant,  provided,  however,  that  if  such  default  is
susceptible  of cure but such cure can not reasonably be  accomplished  with the
use of due  diligence  within such period of time and if, in  addition,  Manager
commences to cure or cause to be cured such default within fifteen (15) Business
Days after  receiving  notice thereof from Tenant and thereafter  prosecutes the
cure of such default with due  diligence,  such period of time shall be extended
to such period of time as may be reasonably  necessary to cure such default with
due diligence.

         H. The  occurrence of any other event  described in this Agreement as a
Manager Default,  including without limitation,  the events described in Section
3.02.C,  4.01.E  and 4.5.A of this  Agreement,  or the  occurrence  of a Manager
Default as  described in that certain  Management  Agreement  dated of even date
herewith between an Affiliate of Manager and an Affiliate of Tenant with respect
to the  Marriott's  Kauai Resort and

                                      -41-
<PAGE>

Beach Club, or the  occurrence of a Manager  Default as described in the Pooling
Agreement.

         9.02     Remedies for Manager Defaults.

         A. In the event of a Manager  Default,  Tenant shall have the right to:
(1) terminate this  Agreement  with respect to the applicable  Hotel under which
such Manager Default arose by written notice to Manager, which termination shall
be  effective  as of the  effective  date  which is set  forth  in said  notice,
provided that said  effective  date shall be at least thirty (30) days after the
date of said notice; (2) institute  forthwith any and all proceedings  permitted
by law or equity (provided they are not  specifically  barred under the terms of
this Agreement), including, without limitation, actions for specific performance
and/or damages; or (3) avail itself of the remedies described in Section 9.03.

         B. In the event of a Manager Default,  and provided that Tenant desires
to terminate  this  Agreement  with respect to Hotels other than the  applicable
Hotel under which the  circumstances  giving rise to such Manager Default arose,
Tenant shall have the right to do so provided that Tenant,  to the extent it may
legally do so, must  simultaneously  terminate  this  Agreement as to all Hotels
which are at such  time  subject  to this  Agreement  and all  Other  Management
Agreements with respect to all other Portfolio Properties which are at such time
subject to Other Management Agreements.

         C. None of (a) the  termination of this Agreement in connection  with a
Manager Default,  (b) the repossession of any Hotel or any portion thereof,  (c)
the  failure  of  Tenant to engage a  replacement  manager  for any Hotel or any
portion  thereof,  nor (d) the engagement of any replacement  manager for all or
any portion of a Hotel,  shall relieve  Manager of its liability and obligations
hereunder,  all of which shall  survive any such  termination,  repossession  or
engagement.  In the event of any termination of this Agreement with respect to a
Hotel as a result of a Manager  Default,  Manager shall  forthwith pay to Tenant
all amounts due and payable with respect to such Hotel through and including the
date of such termination.  Thereafter, Manager, until the end of what would have
been the Term of this Agreement in the absence of such termination,  and whether
or not a  replacement  manager  shall  have been  engaged  for such Hotel or any
portion  thereof,  shall be liable to Tenant  for,  and shall pay to Tenant,  as
current damages,  the amounts which Tenant would have received hereunder for the
remainder of the Term had such  termination not occurred,  less the net amounts,
if any,  received from a replacement  manager,  after  deducting all  reasonable
expenses in connection with such engaging such replacement,  including,  without
limitation,  all  repossession  costs,  brokerage  commissions,  legal expenses,
attorneys'  fees,  advertising,  expenses  of  employees,  alteration  costs and
expenses of  preparation  for such  engagement.  Manager  shall pay such current
damages to Tenant as soon after the end of each Accounting Period as practicable
to determine the amount of the same.

         D. At any time after such termination, whether or not Tenant shall have
collected any amounts owing and due up to and including the date of  termination
of  this  Agreement,  as  liquidated  final  damages  beyond  the  date  of such
termination  and in lieu of Tenant's  right to receive any other  damages due to
the termination of this Agreement,

                                      -42-
<PAGE>

at Tenant's election, Manager shall pay to Tenant an amount equal to the present
value  (discounted  at a rate equal to the interest  rate  published in The Wall
Street Journal for U.S. Treasury Obligations having a maturity,  closest in time
to the last day of the Term) of the excess,  if any, of the amounts which Tenant
would have been entitle to receive  hereunder from the date of such  termination
based on the then market conditions;  provided,  however,  that Manager shall be
entitled to a credit from Tenant in the amount of any  unapplied  balance of the
Holdback,  provided  that  thereupon  Tenant  and its  Affiliates  shall have no
further  obligation to pay the portion of the Holdback so credited to Manager or
any of its Affiliates. Nothing contained in this Agreement shall, however, limit
or  prejudice  the  right of  Tenant to prove  and  obtain  in  proceedings  for
bankruptcy or  insolvency an amount equal to the maximum  allowed by any statute
or rule of law in effect at the time when,  and  governing  the  proceedings  in
which, the damages are to be proved,  whether or not the amount be greater than,
equal to, or less than the amount of the loss or damages referred to above.

         E. In case of any Manager Default  resulting in Manager being obligated
to vacate a Hotel, Tenant may (a) engage a replacement manager for such Hotel or
any part or parts thereof, either in the name of Tenant or otherwise, for a term
or terms  which may at  Tenant's  option,  be equal to,  less than or exceed the
period which would  otherwise have  constituted  the balance of the Term and may
grant  concessions or other  accommodations to the extent that Tenant reasonably
considers advisable and necessary to engage such replacement manager(s), and (b)
may make such reasonable alterations,  repairs and decorations in a Hotel or any
portion  thereof  as  Tenant,  in its sole and  absolute  discretion,  considers
advisable and  necessary  for the purpose of engaging a replacement  manager for
such Hotel; and the making of such  alterations,  repairs and decorations  shall
not operate or be  construed  to release  Manager  from  liability  hereunder as
aforesaid.  Subject to the last sentence of this  paragraph,  Tenant shall in no
event be liable in any way  whatsoever for any failure to a engage a replacement
manager for such Hotel, or, in the event a replacement  manager is engaged,  for
failure to collect  amounts due Tenant in connection  therewith.  To the maximum
extent  permitted by law,  Manager hereby expressly waives any and all rights of
redemption  granted  under any  present  or future  laws in the event of Manager
being evicted or dispossessed, or in the event of Tenant obtaining possession of
a Hotel,  by reason of the  occurrence  and  continuation  of a Manager  Default
hereunder.  Tenant covenants and agrees, in the event of any termination of this
Agreement  as a result  of a  Manager  Default,  to use  reasonable  efforts  to
mitigate its damages.

         F. Any payments  received by Tenant under any of the provisions of this
Agreement  during the  existence or  continuance  of a Manager  Default (and any
payment made to Tenant from others  rather than Manager due to the  existence of
any  Manager  Default)  shall  be  applied  to  Manager's  current  and past due
obligations under this Agreement in such order as Tenant may determine or as may
be prescribed by applicable law.

         G. If a Manager Default shall have occurred and be continuing,  Tenant,
after  notice to Manager  (which  notice  shall not be required if Tenant  shall
reasonably  determine  immediate  action  is  necessary  to  protect  person  or
property),  without  waiving

                                      -43-
<PAGE>

or releasing  any  obligation  of Manager and without  waiving or releasing  any
Manager  Default,  may (but shall not be obligated to), at any time  thereafter,
make such  payment or perform  such act for the  account  and at the  expense of
Manager,  and may, to the maximum extent permitted by law, enter upon a Hotel or
any  portion  thereof for such  purpose and take all such action  thereon as, in
Tenant's sole and absolute discretion, may be necessary or appropriate therefor.
No such  entry  shall  be  deemed  an  eviction  of  Manager  or  result  in the
termination  hereof.  All  reasonable  costs and  expenses  (including,  without
limitation,  reasonable  attorneys'  fees)  incurred  by  Tenant  in  connection
therewith,  together with interest  thereon (to the extent  permitted by law) at
the Overdue Rate from the date such sums are paid by Tenant until repaid,  shall
be paid by Manager to Tenant, on demand.

         9.03     Additional Remedies for Manager Recourse Defaults.

         A. Upon the  occurrence of a Manager  Default  under the  provisions of
Section  9.01.D,  the amount owed to Tenant or any Affiliate of Tenant  pursuant
thereto shall accrue interest, at an annual rate equal to the Overdue Rate, from
and after the date on which such payment was originally due.

         B.  The  rights   granted  under  this  Article  IX  shall  not  be  in
substitution for, but shall be in addition,  to, any and all rights and remedies
available  to Tenant  (including,  without  limitation,  injunctive  relief  and
damages) by reason of applicable provisions of law or equity.

         C. Upon the  occurrence  of a Manager  Default with respect to a Hotel,
Manager shall permit Landlord  and/or Tenant to enter upon the applicable  Hotel
for the  purposes of  effecting a cure for such  Manager  Default,  provided (i)
Landlord and/or Tenant, as applicable, act strictly in accordance with the terms
of  the  Lease,  and  (ii)  Landlord  and/or  Tenant,  as  applicable,   do  not
unreasonably interfere with the operation of such Hotel.

         9.04 Non-Recourse Provision. Notwithstanding anything in this Agreement
to the  contrary,  but subject to the balance of this  Section  9.04 and further
subject to Manager's  obligations in Section 5.09 hereof,  Manager's obligations
pursuant  to this  Agreement  and the  Pooling  Agreement  are in all  instances
non-recourse to Manager,  and in the event of any claim, suit or cause of action
by Tenant against  Manager  pursuant to or in connection  with this Agreement or
the  Pooling  Agreement  or the  transactions  contemplated  by  either of them,
Tenant's sole recourse  against Manager shall be with respect to amounts held by
Marriott or Manager for the account of Tenant  pursuant to this Agreement or the
Pooling  Agreement,  and to amounts available  pursuant to the Marriott Guaranty
and to amounts available pursuant to the Holdback  Agreement,  and Manager shall
have no other  liability  beyond the  extent  thereof  with  respect to any such
claim, suit or cause of action. Notwithstanding the foregoing, this Section 9.04
shall not be  applicable  with respect to (a) fraud  committed  by Manager,  (b)
misapplication  or  misappropriation  of funds  committed  by  Manager,  (c) the
willful  misconduct  of Manager,  (d) the gross  negligence  of Manager,  or (e)
losses against which Manager has elected to self insure pursuant to Section 6.01
hereof.  This  Section 9.04 shall not be construed to

                                      -44-
<PAGE>

limit any right of set-off to which  Tenant may be entitled  with respect to any
amount to which  Manager  or any  Affiliate  may be  entitled  pursuant  to this
Agreement,  any Other Management Agreement or the Pooling Agreement,  and Tenant
shall be entitled to set-off against amounts owed by Tenant to Manager hereunder
amounts owed to Tenant  under this  Agreement or any  Incidental  Document,  but
excluding in any event Systems Fees due to Manager  hereunder or under any Other
Management  Agreement  and any fees due to Marriott  pursuant  to any  Franchise
Agreement.

         9.05 Good Faith  Dispute  By  Manager.  If Manager  shall in good faith
dispute the occurrence of any Manager Default and Manager, before the expiration
of the  applicable  cure period,  shall give notice  thereof to Tenant,  setting
forth, in reasonable  detail,  the basis  therefor,  no Manager Default shall be
deemed to have occurred provided Manager shall escrow disputed amounts,  if any,
pursuant to an escrow arrangement  reasonably  acceptable to Tenant and Manager;
provided,  however,  that in the event that any dispute is ultimately determined
against Manager, then Manager shall pay to Tenant interest on any disputed funds
at the  Overdue  Rate,  from the date  demand  for such funds was made by Tenant
until paid. If Tenant and Manager shall fail, in good faith, to resolve any such
dispute within ten (10) Business Days after Manager's notice of dispute,  either
may submit the matter for  resolution to a court of competent  jurisdiction.  In
the event that such court shall determine a Manager  Default,  in fact,  exists,
Manager  shall  have the  applicable  cure  period  from  the date of the  final
non-appealable determination of the court to cure such Manager Default.

         9.06 Tenant Events of Default. Each of the following shall constitute a
"Tenant Event of Default" to the extent permitted by applicable law:

         A. The  filing by Tenant  of a  voluntary  petition  in  bankruptcy  or
insolvency or a petition for  reorganization  under any  bankruptcy  law, or the
admission  by Tenant  that it is unable to pay its debts as they  become due, or
the  institution of any proceeding by Tenant for its dissolution or termination.
Upon the  occurrence  of any Tenant  Event of Default  as  described  under this
Section 9.06.A,  said Tenant Event of Default shall be deemed a "Tenant Default"
under this Agreement.

         B. The consent by Tenant to an  involuntary  petition in  bankruptcy or
the failure to vacate,  within ninety (90) days from the date of entry  thereof,
any order  approving an involuntary  petition by Tenant.  Upon the occurrence of
any Tenant Event of Default as described under this Section 9.06.B,  said Tenant
Event of Default shall be deemed a "Tenant Default" under this Agreement.

         C. The  entering  of an  order,  judgment  or  decree  by any  court of
competent jurisdiction, on the application of a creditor, adjudicating Tenant as
bankrupt  or  insolvent  or  approving  a  petition  seeking  reorganization  or
appointing a receiver,  trustee,  or liquidator of all or a substantial  part of
Tenant's assets, and such order, judgment or decree's continuing unstayed and in
effect for an aggregate of sixty (60) days  (whether or not  consecutive).  Upon
the  occurrence  of any Tenant Event of Default as described  under this Section
9.06.C,  said Tenant Event of Default shall be deemed a "Tenant  Default"  under
this Agreement.

                                      -45-
<PAGE>

         D. The  failure of Tenant to make any  payment (or cause to be made any
payment by any Affiliate of Tenant which is a party thereto) required to be made
in accordance with the terms of this Agreement or any Incidental  Document on or
before  the date due.  Upon the  occurrence  of any  Tenant  Event of Default as
described  under this  Section  9.06.D,  said Tenant  Event of Default  shall be
deemed a "Tenant  Default"  under this  Agreement  if Tenant  fails to cure such
Tenant Event of Default (1) within any  applicable  notice and cure  period,  if
any,  provided in the document  pursuant to which such payment is to be made, or
(2)  otherwise,  eight (8) days after  receipt of written  notice from the other
party to such document demanding such cure.

         E. The failure of Tenant to  perform,  keep or fulfill any of the other
covenants,  undertakings,  obligations or conditions set forth in this Agreement
or any Incidental  Document.  Upon the occurrence of any Tenant Event of Default
as described  under this Section  9.06.E,  said Tenant Event of Default shall be
deemed a "Tenant  Default"  under  this  Agreement  if Tenant  fails to cure the
Tenant Event of Default  within thirty (30) days after receipt of written notice
from  Tenant  demanding  such  cure,  or,  if the  Tenant  Event of  Default  is
susceptible  of cure,  but such cure cannot be  accomplished  within said thirty
(30) day period of time,  if Manager  fails to commence  the cure of such Tenant
Event of Default within fifteen (15) days of such notice or thereafter  fails to
diligently pursue such efforts to completion.

         F. Any  material  representation  or  warranty  made by  Tenant  or any
Affiliate in this  Agreement or in any Incidental  Document  proves to have been
false in any material respect on the date when made or deemed made, and the same
shall  constitute a Tenant Default if Tenant fails to cure or change the fact or
event which caused such  representation or warranty to have been false when made
within  fifteen (15) Business Days of receiving  notice of such  falseness  from
Manager, provided, however, that if such default is susceptible of cure but such
cure can not  reasonably be  accomplished  with the use of due diligence  within
such period of time and if, in addition, Tenant commences to cure or cause to be
cured such default  within  fifteen (15)  Business Days after  receiving  notice
thereof from Manager and thereafter prosecutes the cure of such default with due
diligence,  such  period of time shall be extended to such period of time as may
be reasonably necessary to cure such default with due diligence.

         G. The occurrence of an event of default  beyond any applicable  notice
and cure period under any obligation, agreement, instrument or document which is
secured in whole or in part by Tenant's or  Landlord's  interest in any Hotel or
should the holder of such security  accelerate the indebtedness  secured thereby
or commence a foreclosure  thereof.  Upon the  occurrence of any Tenant Event of
Default as  described  under this Section  9.06.G,  said Tenant Event of Default
shall be deemed a "Tenant Default" under this Agreement.

         9.07     Remedies for Tenant Defaults.

         A. In the event of a Tenant  Default,  Manager  shall have the right to
institute forthwith any and all proceedings permitted by law or equity (provided
they are not specifically barred under the terms of this Agreement),  including,
without limitation,

                                      -46-
<PAGE>

actions for specific performance and/or damages. Except as expressly provided in
this  Agreement,  Manager  shall have no right to  terminate  this  Agreement by
reason  of a Tenant  Event of  Default  or a Tenant  Default.  In the event of a
termination as described in this Section 9.07 with respect to any Hotel, Manager
shall  retain all of its rights under the Owner  Agreement  with respect to such
Hotel.

         B. Upon the occurrence of a Tenant Default  pursuant to any of Sections
9.06.A,  9.06.B or 9.06.C hereof, or which arises with respect to a violation by
Tenant of Section 10.02 hereof with respect to a Sale of a Hotel in violation of
such  provision  or by Landlord  with respect to a violation of Article 6 of the
Owner's Agreement or Section 8.01.A.2 with respect to the encumbering of a Hotel
by Tenant by a Mortgage which is not a Qualifying Mortgage,  or by Landlord with
respect to a violation  of Article V of the  Owner's  Agreement,  Manager  shall
have,  in addition to all other  rights and remedies  provided  for herein,  the
right to effect a Termination of this Agreement.  Notwithstanding  the foregoing
sentence,  so long as a Hotel is subject to a Qualifying  Mortgage or owned by a
Person who  acquired  such  interest  pursuant to a  Qualifying  Mortgage  (or a
deed-in-lieu   in  connection   therewith),   Manager  shall  not  exercise  the
termination  right  provided  for in this Section  9.07.B if the Tenant  Default
described  herein is also a  default  pursuant  to the terms of such  Qualifying
Mortgage so long as the mortgagee thereunder is diligently pursuing its remedies
to cure the event or circumstance which created such Tenant Default as described
in this Section 9.07.B.

         C.  Manager  and/or any  Affiliate  shall be  entitled,  in case of any
breach of the covenants of Section 11.11.E by Tenant or others claiming  through
it, to injunctive  relief and to any other right or remedy available at law. The
provisions of this Section 9.07.C shall survive Termination.

         9.08 Good  Faith  Dispute  By  Tenant.  If Tenant  shall in good  faith
dispute the occurrence of any Tenant  Default and Tenant,  before the expiration
of the applicable  cure period,  shall give notice  thereof to Manager,  setting
forth,  in reasonable  detail,  the basis  therefor,  no Tenant Default shall be
deemed to have occurred and Tenant shall have no obligation with respect thereto
until final adverse determination thereof; provided,  however, that in the event
that such dispute is ultimately determined against Tenant, then Tenant shall pay
to Manager  interest of any  disputed  funds at the  Overdue  Rate from the date
demand for such  funds was made by Manager  until  paid.  If Manager  and Tenant
shall fail,  in good faith,  to resolve  any such  dispute  within ten (10) days
after Tenant's notice of dispute, either may submit the matter for resolution to
a court of competent jurisdiction.  In the event that such court shall determine
a Tenant Default, in fact, exists,  Tenant shall have the applicable cure period
from the date of the  final  non-appealable  determination  of the court to cure
such Default.

         9.09  Landlord  Defaults.   Each  of  the  following  shall  constitute
"Landlord Defaults": (1) The failure of Landlord to provide funds to any Reserve
on or before the date such funds are  required to be paid under  Section  5.07.B
hereof or under the Owner Agreement (after any Arbitration, if applicable),  (2)
the failure of Landlord to make insurance or condemnation proceeds available for
repair,  restoration or replacement required under the Owner Agreement,  (3) the
imposition by Landlord of a Mortgage

                                      -47-
<PAGE>

against any Hotel which is not a  Qualifying  Mortgage,  (4) the  permitting  by
Landlord of a lien on Landlord's interest in any Hotel in violation of the terms
hereof of or the Owner Agreement,  or (5) a Landlord Sale of any Hotel occurs in
violation of the Owner Agreement.

         If a Landlord Default occurs,  Tenant shall have no remedies under this
Agreement  with respect to such  Landlord  Default,  but reserves its rights and
remedies  under the  Lease.  Notwithstanding  anything  herein to the  contrary,
Manager  shall be entitled to  exercise  any and all of the  remedies of Manager
with respect to a Landlord Default under the Owner Agreement.

                                    ARTICLE X

                               ASSIGNMENT AND SALE

         10.01 Assignment.

         A.  Except as  provided in Section  10.01.D,  Manager  shall not assign
mortgage,  pledge,  hypothecate or otherwise transfer its interest in all or any
portion of this  Agreement or any rights  arising under this Agreement or suffer
or permit  such  interests  or rights to be  assigned,  transferred,  mortgaged,
pledged,  hypothecated or encumbered,  in whole or in part, whether voluntarily,
involuntarily  or by  operation  of law, or permit the use or  operation  of the
Hotels by anyone  other than  Manager or Tenant.  For  purposes of this  Section
10.01.A,  an  assignment  of this  Agreement  shall be  deemed  to  include  the
following (for purposes of this Section 10.01.A,  a "Corporate  Transfer"):  any
direct or indirect  transfer of any interest in Manager such that Manager  shall
cease to be an  Affiliate  of  Marriott  or any  transaction  pursuant  to which
Manager is merged or  consolidated  with another entity which is not Marriott or
an  Affiliate  of  Marriott or  pursuant  to which all or  substantially  all of
Manager's  assets are  transferred  to any other  entity,  as if such  change in
control  or  transaction  were an  assignment  of this  Agreement  but shall not
include any involuntary liens or attachments  contested by Manager in good faith
in accordance with Section 11.23 of this Agreement.

         B.  Notwithstanding  the  foregoing,  if,  after  giving  effect  to  a
Corporate  Transfer,  Manager,  or all or substantially all of Manager's assets,
would be owned or  controlled by a Person who would,  in  connection  therewith,
acquire all or substantially all of the Courtyard business of Marriott, provided
that (I) such Person ratifies in writing the obligations of Manager  pursuant to
this Agreement, and (II) in Tenant's reasonable  determination,  such Person and
its  controlling  parties  (w) shall have  sufficient  expertise  and  financial
resources to carry on the such business  consistent with  historical  practices,
(x) shall not be convicted felons, (y) shall qualify as an "eligible independent
contractor"  under Section 856(d)(9) of the Code and (z) shall otherwise satisfy
the  requirements  of  Section  10.01.C  hereunder,  Tenant  shall at  Manager's
request,  waive the restrictions set forth in this Section 10.01 with respect to
such Corporate  Transfer and no consent by Tenant shall be required with respect
thereto.  If Tenant  fails to give  notice of such  waiver  (or the  withholding
thereof)  within  twenty  (20)  Business  Days after  Manger's  written  request
therefor, such waiver shall be deemed given.

                                      -48-
<PAGE>

         C. Notwithstanding the terms of Section 10.01.A, Manager shall have the
right,  without Tenant's  consent,  to (1) assign its interest in all or part of
this  Agreement to Marriott or any Affiliate of Marriott,  (2) sublease or grant
concessions  or  licenses  to shops or any other space at a Hotel so long as the
terms  of any such  subleases  or  concessions  do not  exceed  the Term of this
Agreement,  provided that (a) such subleases and  concessions are for newsstand,
gift shop, parking garage, health club,  restaurant,  bar or commissary purposes
or similar  concessions,  (b) such subleases do not have a term in excess of the
lesser of five (5) years or the remaining  Term under this  Agreement and (c) do
not demise,  (i) in the aggregate,  in excess of three  thousand  (3,000) square
feet of any Hotel,  or (ii) for any single  sublease,  in excess of 1,000 square
feet of any Hotel, (d) any such sublease,  license or concession to an Affiliate
of a Manager  shall be on terms  consistent  with  those  that  would be reached
through arms-length negotiation, (e) for so long as Landlord or any Affiliate of
Landlord  shall seek to  qualify as a real  estate  investment  trust,  anything
contained in this Agreement to the contrary  notwithstanding,  Manager shall not
sublet or  otherwise  enter into any  agreement  with  respect to a Hotel on any
basis such that the rental or other fees to be paid by any sublessee  thereunder
would be based, in whole or in part, on either (i) the income or profits derived
by the business  activities  of such  sublessee,  or (ii) any other formula such
that any portion of such  sublease  rental  would fail to qualify as "rents from
real property" within the meaning of Section 856(d) of the Internal Revenue Code
of 1986, as amended, or any similar or successor provision thereto, and (f) such
lease or  concession  will not  violate  or  affect  any  Legal  Requirement  or
Insurance Requirement, and Manager shall obtain or cause the subtenant to obtain
such additional  insurance coverage applicable to the activities to be conducted
in such  subleased  space  as  Landlord  and any  Mortgagee  under a  Qualifying
Mortgage may  reasonably  require,  (3) assign its interest in this Agreement in
connection with a merger or consolidation or a sale of all or substantially  all
of the assets of  Manager or  Marriott,  and (4)  assign  its  interest  in this
Agreement  in  connection  with a merger  or  consolidation  or a sale of all or
substantially  all  of  the  System  assets  (including   associated  management
agreements) owned by Marriott and its Subsidiaries.

         D. Tenant shall not assign or transfer  its interest in this  Agreement
without the prior written  consent of Manager;  provided,  however,  that Tenant
shall have the right,  without such consent,  to (1) assign its interest in this
Agreement  in  connection  with  a Sale  of a  Hotel  which  complies  with  the
provisions of Section 10.02 of this Agreement, (2) assign its interest hereunder
to Landlord  or an  Affiliate  of  Landlord  under the terms of the Lease or the
Owner Agreement, (3) assign its interest hereunder to Manager or an Affiliate of
Manager,  and (4) assign its  interest  hereunder to an Affiliate of Tenant in a
corporate  restructuring  of  Tenant  or any of its  Affiliates,  provided  such
assignment complies with the provisions of Section 10.02 of this Agreement.

         E.  In the  event  either  party  consents  to an  assignment  of  this
Agreement by the other, no further  assignment shall be made without the express
consent in writing of such party,  unless such  assignment may otherwise be made
without such consent  pursuant to the terms of this Agreement.  An assignment by
Tenant of its interest in this Agreement  approved or permitted  pursuant to the
terms hereof shall relieve Tenant from its obligations under this Agreement with
respect to the Hotel to which such  assignment  pertains  arising from and after
the effective date of such assignment.  An assignment by

                                      -49-
<PAGE>

Manager of its  interest in this  Agreement  shall not relieve  Manager from its
obligations  under  this  Agreement  with  respect  to the  Hotel to which  such
assignment  pertains unless such  assignment  occurs in the context of a sale of
all  or  substantially  all  of the  Courtyard  business  of  Marriott  and  its
Affiliates and which is otherwise permitted or approved,  if required,  pursuant
to this  Agreement,  in which  event  Manager  shall be so  relieved  from  such
obligations arising from and after the effective date of such assignment.

         10.02    Sale of the Hotel.

         A.  Tenant may enter into a Sale of a Hotel to any Person  which (1) is
an Affiliate of Tenant, and (2) who assumes Tenant's obligations with respect to
such Hotel under this Agreement,  the Owner Agreement (to the extent  applicable
to the Hotel being sold),  the  corresponding  Franchise  Agreement  and, to the
extent applicable with respect to the "deconsolidation"  provisions thereof, the
Pooling  Agreement (or ratifies each of such obligations if such Sale of a Hotel
is pursuant to a transfer of a Controlling Interest in Tenant). Tenant shall not
enter into any Sale of a Hotel to any Person which is not an Affiliate of Tenant
(a) which does not have  sufficient  financial  resources  to  fulfill  Tenant's
obligations with respect to such Hotel under this Agreement, the Owner Agreement
(to the extent applicable to the Hotel),  the Franchise  Agreement,  and, to the
extent applicable as set forth in the preceding sentence, the Pooling Agreement;
(b) which is in control of, or is controlled by, Persons who have been convicted
of felonies  involving moral turpitude in any state or federal court;  (c) which
owns or has an equity  interest in a hotel brand,  tradename,  system,  or chain
having at least five (5) hotels  (excluding  a mere  franchisee  or mere passive
investor); and (d) which fails to expressly assume in writing the obligations of
Tenant hereunder and under the Owner Agreement (to the extent  applicable to the
Hotel), the Franchise  Agreement,  and, to the extent applicable as set forth in
the preceding sentence, the Pooling Agreement.

         B. Tenant shall provide  written notice of any proposed Sale of a Hotel
and  shall  provide  to  Manager  such   information   concerning  the  proposed
transferee's financial condition, ownership and business interests and as may be
reasonably  necessary or  appropriate  in order for Manager to determine if such
transfer is consistent with the above provisions.

         C. In connection with any Sale of a Hotel, Manager and the purchaser or
its tenant shall enter into a new management  agreement with Manager,  which new
management  agreement  will  be on all of  the  terms  and  conditions  of  this
Agreement  (with  revisions as reasonably  required to account for the fact that
such  management  agreement  may be  applicable  to less than all of the  Hotels
subject to this  Agreement)  except that the Initial Term and Renewal Term(s) of
any such new  management  agreement  shall  consist  only of the  balance of the
Initial Term and Renewal  Term(s)  remaining under this Agreement at the time of
execution of such new management agreement.  Such new management agreement shall
be  executed  by Manager and such new tenant at the time of closing of a Sale of
the Hotel,  and a memorandum of such new management  agreement shall be executed
by the parties  and  recorded  immediately  following  recording  of the deed or
memorandum  of  lease  or  assignment  and  prior to  recordation  of any  other
documents.

                                      -50-
<PAGE>

                                   ARTICLE XI

                                  MISCELLANEOUS

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

         11.02  Actions By Manager.  Manager  covenants and agrees that it shall
not take any action which would be binding upon Tenant or Landlord except to the
extent it is permitted to do so pursuant to the terms of this Agreement.

         11.03 Relationship. In the performance of this Agreement, Manager shall
act solely as an independent contractor,  except that in the performance of this
Agreement,  Manager shall have all  fiduciary  duties of an agent to a principal
under  applicable law and Tenant shall have all fiduciary  duties of a principal
to an agent under  applicable  law.  Neither this Agreement nor any  agreements,
instruments,  documents or transactions contemplated hereby shall in any respect
be  interpreted,  deemed  or  construed  as making  Manager  a partner  or joint
venturer  with, or agent of,  Tenant,  except that, in the  performance  of this
Agreement,  Manager will have the  fiduciary  duties of an agent and Tenant will
have the fiduciary duties of a principal.  Tenant and Manager agree that neither
party will make any contrary  assertion,  claim or  counterclaim  in any action,
suit,  arbitration  or other legal  proceedings  involving  Tenant and  Manager.
Nothing contained herein is intended to, nor shall be construed as, creating any
landlord-tenant  relationship  between Manager and Tenant or between Manager and
Landlord.  Each of Manager  and  Tenant  shall  prepare  and shall  cause  their
Affiliates to prepare their financial statements and tax returns consistent with
the foregoing characterization.

         11.04  Applicable Law. The Agreement shall be construed under and shall
be governed by the laws of the state of Maryland  without  regard to its "choice
of law" rules.

         11.05 Recordation. The terms and provisions of this Agreement shall run
with the  parcel of land  designated  as the Site,  and with  Tenant's  interest
therein, and shall be binding upon all successors to such interest.  The parties
shall  execute  simultaneously  with  this  Agreement  sufficient  copies  of  a
"Memorandum of Management  Agreement" in recordable  form  satisfactory  to both
parties,  which Memorandum of Management  Agreement shall, if legally permitted,
be recorded or registered  (or such other steps shall be taken by the parties as
are necessary,  to the extent legally permitted,  to give official notice to all
third  parties that this  Agreement  binds the Hotels)  promptly  following  the

                                      -51-
<PAGE>

Effective  Date of this  Agreement  in each  jurisdiction  in  which a Hotel  is
located. Any cost of such recordation shall be paid by Manager.

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

         11.07 Notices. Notices, statements and other communications to be given
under the terms of the  Agreement  shall be in  writing  and  delivered  by hand
against receipt or sent by certified or registered mail or Express Mail service,
postage prepaid,  return receipt requested or by nationally  utilized  overnight
delivery service, addressed to the parties as follows:

               To Tenant:       HPT TRS MI-135, INC.
                                c/o Hospitality Properties Trust
                                400 Centre Street
                                Newton, Massachusetts 02458
                                Attn:  President

               with copy to:    Sullivan & Worcester LLP
                                One Post Office Square
                                Boston, Massachusetts 02109
                                Attn:  Alexander A. Notopoulos, Esq.
                                       Sander E. Ash, Esq.

               To Manager:      Courtyard Management Corporation
                                c/o Marriott International, Inc.
                                10400 Fernwood Road
                                Bethesda, Maryland 20817
                                Attn:  Law Department 52.923 - Hotel Operations
                                Fax:     (301) 380-6727

               with copy to:    Courtyard Management Corporation
                                c/o Marriott International, Inc.
                                10400 Fernwood Road
                                Bethesda, Maryland 20817
                                Attn:  Dept. Lodging Financial Analysis
                                       Department of Courtyard by Marriott
                                Fax:     (301) 380-3667

               with a copy to:  Marriott International, Inc.
                                10400 Fernwood Road
                                Bethesda, Maryland 20817
                                Attn:  Treasury Department - Dept. 924.04
                                Fax:     (301) 380-5067

                                      -52-
<PAGE>

               with a copy to:  Venable, Baetjer and Howard, LLP
                                1800 Mercantile Bank and Trust Building
                                Two Hopkins Plaza
                                Baltimore, Maryland 21201
                                Attn:  James D. Wright, Esq.
                                   Fax:     (410) 244-7742

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

         11.08    Environmental Matters.

         A. Subject to Section  11.08.D  hereof and the  sufficiency of funds in
each applicable  Reserve,  during the Term or at any other time while Manager is
in possession of the Hotel, (1) Manager shall not store,  spill upon, dispose of
or transfer to or from any Hotel any Hazardous  Substance,  except in compliance
with all Legal Requirements,  (2) Manager shall maintain the Hotels at all times
free  of  any  Hazardous   Substance   (except  in  compliance  with  all  Legal
Requirements),  and (3) Manager (a) upon  receipt of notice or  knowledge  shall
promptly  notify  Landlord and Tenant in writing of any  material  change in the
nature  or extent of  Hazardous  Substances  at any  Hotel,  (b) shall  file and
transmit to  Landlord  and Tenant a copy of any  Community  Right to Know report
which is required to be filed by the Manager with respect to any Hotel  pursuant
to SARA  Title III or any  other  Legal  Requirements,  (c)  shall  transmit  to
Landlord  and  Tenant  copies  of  any  citations,   orders,  notices  or  other
governmental   communications   received  by  Manager   with   respect   thereto
(collectively,  "Environmental  Notice"),  which Environmental Notice requires a
written response or any action to be taken and/or if such  Environmental  Notice
gives notice of and/or presents a material risk of any material violation of any
Legal Requirement and/or presents a material risk of any material cost, expense,
loss or damage (an  "Environmental  Obligation"),  (d) shall  observe and comply
with all Legal  Requirements  relating to the use,  maintenance  and disposal of
Hazardous  Substances and all orders or directives  from any official,  court or
agency of competent jurisdiction relating to the use or maintenance or requiring
the removal, treatment,  containment or other disposition thereof, and (e) shall
pay or otherwise  dispose of any fine,  charge or  Imposition  related  thereto,
unless  Tenant  or the  Manager  shall  contest  the same in good  faith  and by
appropriate  proceedings  and the right to use and the value of any Hotel is not
materially and adversely affected thereby.

         B. Subject to Sections 11.08.C and 11.08.D below and the sufficiency of
funds in each  applicable  Reserve,  in the event of the  discovery of Hazardous
Substances other than those maintained in accordance with Legal  Requirements on
any  portion  of any Site or in any  Hotel  during  the Term of this  Agreement,
Manager  shall  promptly  (i) clean up and remove  from and about such Hotel all
Hazardous  Substances  thereon,  (ii)

                                      -53-
<PAGE>

contain  and  prevent  any  further  release or threat of  release of  Hazardous
Substances on or about such Hotel, and (iii) use good faith efforts to eliminate
any further  release or threat of release of  Hazardous  Substances  on or about
such Hotel, and (iv) otherwise effect a remediation of the problem in accordance
with (1) the Comprehensive  Environmental  Response,  Compensation and Liability
Act, 42 U.S.C. Section 9601 et seq., as amended; (2) the regulations promulgated
thereunder,  from time to time; (3) all federal, state and local laws, rules and
regulations  (now or  hereafter  in effect)  dealing  with the use,  generation,
treatment,  storage, disposal or abatement of Hazardous Substances;  and (4) the
regulations promulgated thereunder,  from time to time (collectively referred to
as "Environmental Laws").

         C. The actual costs incurred or the estimated costs to be incurred with
respect to any costs that have been or are to be incurred under Section  11.08.B
above are herein  collectively  referred to as, the  "Environmental  Costs". Any
costs incurred by Tenant with respect to any judgment or settlement  approved by
Manager  (such  approval  shall not be  unreasonably  withheld,  conditioned  or
delayed with respect to any third party claims  including,  without  limitation,
claims by Landlord arising under the Lease),  including reasonable attorney fees
incurred  with  respect  to such  claims,  as a result of  release  or threat of
release  of  Hazardous  Substances  on or about  any of the  Hotels  are  herein
referred to as the "Other Environmental  Costs". The Environmental Costs and the
Other  Environmental  Costs are collectively  referred to herein as the "Section
11.08 Costs".

         D. All Environmental Costs, Other Environmental Costs and Section 11.08
Costs with respect to each Hotel shall be paid from the  applicable  Reserve for
such Hotel;  provided,  however,  that if any of the foregoing  costs arise as a
result of the gross negligence or willful  misconduct of Manager or any employee
of Manager, such costs shall be paid by Manager at its sole cost and expense and
not as a Deduction, and Manager shall indemnify Tenant for any loss, cost, claim
or  expense  (including  reasonable  attorneys'  fees)  incurred  by  Tenant  in
connection therewith.

         11.09    Confidentiality.

         A.  The  parties  hereto  agree  that  the  matters  set  forth in this
Agreement  are  strictly  confidential  and each party will make every effort to
ensure that the  information  is not disclosed to any outside person or entities
(including  the press)  without  the prior  written  consent of the other  party
except  may be  required  by law and as may be  reasonably  necessary  to obtain
licenses, permits, and other public approvals necessary for the refurbishment or
operation of the Hotels,  or in connection with financing or proposed  financing
of the Hotels, a Sale of a Hotel, or a sale of a controlling interest in Tenant,
Manager, or Marriott or is required to be disclosed under the Lease.

         B. No  reference  to  Manager or to any  Affiliate  will be made in any
prospectus,   private  placement  memorandum,   offering  circular  or  offering
documentation  related thereto  (collectively  referred to as the "Prospectus"),
issued by Tenant or an  Affiliate,  which is  designated  to interest  potential
investors in a Hotel,  unless Manager has previously received a copy of all such
references. However, regardless of whether

                                      -54-
<PAGE>

Manager  does or does  not so  receive  a copy of all such  references,  neither
Manager nor any Affiliate will be deemed a sponsor of the offering  described in
the Prospectus,  nor will it have any responsibility for the Prospectus, and the
Prospectus will so state. Unless Manager agrees in advance,  the Prospectus will
not  include  any  trademark,  symbols,  logos  or  designs  of  Manager  or any
Affiliates.  Tenant shall  indemnify,  defend and hold Manager harmless from and
against all loss,  costs,  liability and damage  (including  attorneys' fees and
expenses,  and the cost of  litigation)  arising  out of any  Prospectus  or the
offering  described  therein,  and this  obligation  of Tenant shall survive any
Termination of this Agreement.

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

         11.11 Actions to be Taken Upon Termination.  Upon a Termination of this
Agreement with respect to any Hotel, the following shall be applicable:

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

         B.  Manager  shall  release and transfer to Tenant,  or cause  Marriott
under the Pooling  Agreement to release and transfer to Tenant,  any of Tenant's
funds which are held or  controlled  by Manager or Marriott  with respect to the
applicable  Hotels,  with the  exception of funds of Tenant to be held in escrow
pursuant to Section  6.01.F and  Section  11.11.I and  otherwise  in  accordance
herewith. All amounts in the applicable

                                      -55-
<PAGE>

Reserves shall be applied to any amounts payable from such Reserves hereunder or
under the Owner Agreement and the balance shall be paid to Landlord.

         C.  Manager  shall make  available  to Tenant  such  books and  records
respecting the applicable Hotels  (including those from prior years,  subject to
Manager's  reasonable records retention policies) as will be needed by Tenant to
prepare the  accounting  statements,  in accordance  with the Uniform  System of
Accounts, for the applicable Hotels for the year in which the Termination occurs
and for any subsequent year.

         D. Manager  shall (to the extent  permitted by law) assign to Tenant or
to the new manager all operating  licenses and permits for the applicable Hotels
which have been  issued in  Manager's  name  (including  liquor  and  restaurant
licenses, if any).

         E. If any applicable Franchise Agreements have been terminated, Manager
shall  have  the  option,   to  be  exercised  within  thirty  (30)  days  after
Termination,  to purchase, at their then book value, any items of the applicable
Hotels'  Inventories  and Fixed  Asset  Supplies as may be marked with any Trade
Name,  or any  Marriott or Courtyard  by Marriott  trademark,  other trade name,
symbol,  logo or design.  In the event  Manager does not  exercise  such option,
Tenant  agrees that it will use any such items not so purchased  exclusively  in
connection with the applicable Hotels until they are consumed.

         F. Manager  shall,  at Tenant's  sole cost and expense,  use good faith
commercially  reasonable  efforts to  transfer to and  cooperate  with Tenant or
Tenant's  designee in connection  with the  processing of all  applications  for
licenses,  operating  permits  and  other  governmental  authorizations  and all
contracts  entered into by Manager,  including  contracts with  governmental  or
quasi-governmental  entities  which Manager has entered into with respect to the
use and  operation of the  applicable  Hotels as then  operated (and Tenant will
assume  responsibility  for all of the same),  but  excluding  (i) all insurance
contracts and  multi-property  contracts not limited in scope to the  applicable
Hotels or other  Portfolio  Properties (if  applicable),  (ii) all contracts and
leases with Affiliates of Manager,  (iii) utility  deposits,  and (iv) telephone
numbers for the  applicable  Hotels (which  telephone  numbers  Manager shall be
required to convey to Tenant only if this  Agreement is terminated as the result
of an Event of Default by  Manager).  Tenant  shall  indemnify  and hold Manager
harmless for all claims,  costs and expenses  (including  reasonable  attorneys'
fees) arising from acts or omissions by Tenant or Tenant's  designee  under such
contracts  subsequent to the earlier of the date of  Termination  or the date of
transfer thereof to Tenant or Tenant's designee.

         G.  Tenant  shall have the right to  operate  the  improvements  on the
applicable   Sites  without   modifying  the   architectural   design  of  same,
notwithstanding  the fact that such  design or certain  features  thereof may be
proprietary to Manager  and/or  protected by trademarks or service marks held by
Manager  or an  Affiliate,  provided  that  such use  shall be  confined  to the
applicable Sites.

         H. Any computer software  (including  upgrades and replacements) at the
applicable Hotels owned by Manager,  Marriott, an Affiliate,  or the licensor of
any of

                                      -56-
<PAGE>

them is proprietary to Manager, Marriott, such Affiliate, or the licensor of any
of them and shall in all  events  remain  the  exclusive  property  of  Manager,
Marriott,  the Affiliate or the licensor of any of them, as the case may be, and
nothing  contained in this Agreement shall confer on Tenant the right to use any
of  such  software.  Subject  to the  terms  and  conditions  of  the  Franchise
Agreement,  Manager  shall have the right to remove from the  applicable  Hotels
without  compensation to Tenant any computer  software  (including  upgrades and
replacements),  including,  without  limitation,  the System software,  owned by
Manager,  Marriott,  any Affiliate or the licensor of any of them.  Furthermore,
upon Termination, Manager shall be entitled to remove from the applicable Hotels
without  compensation  to Tenant any  computer  equipment  utilized as part of a
centralized  reservation system or owned by a party other than Tenant,  unless a
Franchise Agreement is in place and such equipment is to be provided pursuant to
the Franchise Agreement.

         I. If this  Agreement  with respect to one or more Hotels is terminated
for any  reason,  other  than a  Termination  by  reason  of a  Manager  Default
hereunder,  and in any event excluding a termination which occurs as a result of
the  expiration  of the Term  hereof,  an escrow  fund for each  Hotel  shall be
established  from Gross  Revenues  of such Hotel to  reimburse  Manager  for all
reasonable  costs and expenses  incurred by Manager in terminating its employees
at such Hotel,  such as severance  pay,  unemployment  compensation,  employment
relocation, and other employee liability costs arising out of the termination of
employment of Manager's  employees at such Hotel.  If Gross  Revenues of each of
such Hotels are  insufficient  to meet the  requirements of such escrow fund for
such Hotel,  then  Manager  shall have the right to withdraw  the amount of such
expenses  from  Working  Capital  or any  other  funds of  Tenant  (specifically
excluding  any  interest  Tenant may have in the  Reserve  for such  Hotel) with
respect  to such Hotel  held by or under the  control  of  Manager  or  Marriott
hereunder or under the Pooling Agreement, if applicable.

         J.  Various  other  actions  shall  be  taken,  as  described  in  this
Agreement,  including, but not limited to, the actions described in Section 4.05
and Section 6.01.F.

         K. Manager shall peacefully  vacate and surrender the applicable Hotels
to Tenant.

         L. Upon  expiration of the entire Term of this Agreement and expiration
of the Lease in accordance with their respective terms (and not as a result of a
Default  or Event of  Default),  Tenant  shall  have no  further  liability  for
repayment of Additional Manager Advances, Additional Marriott Advances, Holdback
Agreement Advances,  and any other advances made by Marriott or Manager pursuant
to this Agreement or the Pooling Agreement.

         The provisions of this Section 11.11 shall survive Termination.

         11.12 Trademarks,  Trade Names and Service Marks. The names "Marriott,"
"Courtyard,"  "Courtyard  by Marriott"  and  "Marriott  Courtyard"  (each of the
foregoing  names,  together  with  any  combination  thereof,  are  collectively
referred to as the "Trade Names") when used alone or in connection  with another
word or words,  and the Marriott

                                      -57-
<PAGE>

or Courtyard by Marriott trademarks,  service marks, other trade names, symbols,
logos and  designs  shall in all events  remain the  exclusive  property  of the
Franchisor  under  the  Franchise  Agreements  and  nothing  contained  in  this
Agreement shall confer on Tenant the right to use any of the Trade Names, or the
Marriott or Courtyard by Marriott trademarks,  service marks, other trade names,
symbols,  logos or designs affiliated or used therewith otherwise than in strict
accordance  with the terms of this  Agreement.  Except as  provided  in  Section
11.11.E and the Franchise  Agreement,  upon  termination  of this Agreement with
respect to any Hotel,  any use of or right to use any of the Trade Names, or any
of the Marriott or Courtyard by Marriott trademarks,  service marks, other trade
names,  symbols,  logos or designs by Tenant  shall cease  forthwith  and Tenant
shall  promptly  remove from such Hotel any signs or similar items which contain
any of said Trade Names, trademarks,  service marks, other trade names, symbols,
logos or designs in accordance with the Franchise  Agreement and this Agreement.
If Tenant has not  removed  such signs or  similar  items  within ten (10) days,
Manager  shall  have the  right to do so.  The cost of such  removal  shall be a
Deduction for such Hotel  attributable  to the  Accounting  Period in which such
Termination occurs. Included under the terms of this Section are all trademarks,
service marks, trade names,  symbols,  logos or designs used in conjunction with
such Hotel,  including but not limited to restaurant names,  lounge names, etc.,
whether  or not the  marks  contain  the  "Marriott"  name or the  Courtyard  by
Marriott name.  The right to use such  trademarks,  service marks,  trade names,
symbols,  logos or designs belongs exclusively to Marriott,  and the use thereof
inures to the benefit of  Marriott  whether or not the same are  registered  and
regardless of the source of the same. The provisions of this Section 11.12 shall
survive Termination.

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

         11.14 Partial  Invalidity.  If any portion of this  Agreement  shall be
declared invalid by order,  decree or judgment of a court,  this Agreement shall
be  construed  as if such  portion  had not been so  inserted  except  when such
construction  would  operate  as an undue  hardship  on  Manager  or  Tenant  or
constitute a substantial  deviation  from the general intent and purpose of said
parties as reflected in this Agreement.

         11.15 Survival.  Except as otherwise  specifically provided herein, the
rights and obligations of the parties herein shall not survive any Termination.

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

                                      -58-
<PAGE>

         11.17 [Intentionally deleted].

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

         11.19 Affiliates.  Manager shall be entitled to contract with companies
that are Affiliates (or companies in which Manager has an ownership  interest if
such interest is not  sufficient to make such a company an Affiliate) to provide
goods and/or  services to the Hotels;  provided that the prices and/or terms for
such goods and/or services are competitive.  Additionally,  Manager may contract
for the purchase of goods and  services  for the Hotels with third  parties that
have  other  contractual   relationships   with  Manager,   Marriott  and  their
Affiliates,  so long as the prices and terms are  competitive.  In  determining,
pursuant to the  foregoing,  whether such prices  and/or terms are  competitive,
they will be compared to the prices  and/or terms which would be available  from
reputable and qualified  parties for goods and/or  services of similar  quality,
and the goods  and/or  services  which are being  purchased  shall be grouped in
reasonable  categories,  rather than being compared item by item. Any dispute as
to whether prices and/or terms are competitive  shall be referred to Arbitration
as provided in Section  11.22.  The prices  paid may  include  overhead  and the
allowance of a reasonable return to Manager's  Affiliates (or companies in which
Manager has an ownership  interest if such  interest is not  sufficient  to make
such a company an  Affiliate),  provided  that such  prices are  competitive  as
provided for herein.  Tenant  acknowledges  and agrees that, with respect to any
purchases of goods or services  pursuant to this Section  11.19,  and subject to
the foregoing qualification that prices and/or terms are competitive,  Manager's
Affiliates may retain for their own benefit any  allowances,  credits,  rebates,
commissions and discounts received with respect to any such purchases.

         11.20  Competing  Facilities.  Except as  provided  in  Section  11.21,
neither this Agreement nor anything implied by the relationship  between Manager
and  Tenant  shall   prohibit  any  Marriott  or  any  Affiliate   thereof  from
constructing,  operating,  promoting,  and/or  authorizing  others to construct,
operate,  or promote one or more Marriott  Hotels,  Marriott  Resorts,  Marriott
Suites Hotels,  RITZ-CARLTON Hotels,  Renaissance Hotels,  Conference Centers by
Marriott,  Residence  Inn by Marriott  Hotels,  Courtyard  by  Marriott  Hotels,
Fairfield Inns,  Fairfield  Suites,  TownePlace  Suites by Marriott,  SpringHill
Suites  by  Marriott,  or any other  lodging  concepts,  time-share  facilities,
restaurants,  or  other  business  operations  of any  type,  at  any  location,
including a location proximate to the Sites.  Tenant  acknowledges,  accepts and
agrees further that Marriott and its Affiliates  retain the right,  from time to
time, to construct or operate,  or both, or promote or acquire,  or authorize or
otherwise license others to construct or operate, or both, or promote or acquire
any  hotels,  lodging  concepts  or  products,  restaurants  or  other  business
operations  of any type  whatsoever,  including,  but not by way of  limitation,
those listed  above,  at any location  including  one or more sites which may be
adjacent,  adjoining or proximate to the Site, which business  operations may be
in direct

                                      -59-
<PAGE>

competition  with the Hotels and that any such exercise may adversely affect the
operation of the Hotels.

         11.21    Trade Area Restriction.

         A.  Notwithstanding   anything  to  the  contrary  in  this  Management
Agreement  and without  limitation  Marriott's  obligations  with respect to the
Franchise Agreement entered into with respect to any Hotel,  neither Manager nor
any Affiliate  shall operate or open any hotel as a Courtyard by Marriott  hotel
nor shall  Manager or any  Affiliate  authorize a third party to operate or open
any hotel as a Courtyard by Marriott hotel within the area designated on Exhibit
B with respect to any Hotel (the "Restricted Trade Area"), until after the Trade
Area  Restriction  Expiration  Date set forth on the  Addendum  for such  Hotel,
unless such hotel (1) is owned or leased by HPT or an  Affiliate;  (2) is owned,
operated,  managed or franchised by Marriott or its  Affiliates  and has been so
identified  in writing at or prior to the time of the  execution of the Purchase
and Sale Agreement;  (3) is part of an acquisition by Marriott or its Affiliates
of an  interest  in a chain  or group of not less  than  five (5)  hotels  (such
acquisition   to  occur  in  a  single   transaction  or  a  series  of  related
transactions);  (4)  has  been so  identified  in  writing  by  Marriott  or its
Affiliates as planned to be developed, acquired, operated, managed or franchised
by Marriott or its Affiliates prior to the time of execution of the Purchase and
Sale Agreement;  or (5) is a replacement of any of the properties  identified in
(1)  through  (4) above with a property  having  not more than one  hundred  ten
percent  (110%) of the Guest Rooms of the hotel so replaced or an  expansion  of
any of the properties  otherwise permitted to be located in the Restricted Trade
Area under this Section  11.21.A,  such  expansion not to increase the number of
Guest Rooms at such hotel by more than 10%.

         B.  Subsequent to each  applicable  Trade Area  Restriction  Expiration
Date,  Marriott  and its  Affiliates  shall  be free  to  open or  operate,  and
authorize a third party to open and operate any hotel as a Courtyard by Marriott
hotel within the Restricted  Trade Area for each Hotel,  except that if Marriott
or its  Affiliates  shall  determine to obtain,  either  through  development or
purchase,  any hotel to be operated as a Courtyard by Marriott  hotel within any
Restricted Trade Area,  Manager shall or shall cause such Affiliates to give HPT
notice thereof and to negotiate,  in good faith, at the election of HPT, for the
acquisition  thereof by HPT and the lease  thereof to an Affiliate of HPT on the
terms and conditions of the Lease and the management of such property by Manager
in  accordance  with the terms of this  Agreement,  except  with  respect to the
amount of the purchase price, initial working capital,  tenant's first priority,
tenant's second  priority,  tenant's third priority and the minimum rent payable
with respect thereto. Manager or its Affiliates, however, shall not be obligated
to provide notice until the development or purchase of the Courtyard by Marriott
hotel has been fully  approved  by the Board of  Directors  of  Marriott  or its
Affiliates.  Moreover, the foregoing requirement of good faith negotiation shall
not bind  Tenant,  HPT,  Marriott or any of their  Affiliates  to proceed with a
transaction  with respect to the  identified  hotel  unless the  purchase  price
thereof and minimum rent payable with respect thereto,  tenant's first priority,
tenant's  second  priority  and  tenant's  third  priority is agreed upon within
thirty (30) business days after the  commencement of  negotiations  with respect
thereto.  This  paragraph  B shall not apply to hotels  that (a) are  developed,
acquired,  or owned by parties other than Marriott and its

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<PAGE>

Affiliates,  (b) are part of an  acquisition by Marriott or its Affiliates of an
interest  in a  chain  or  group  of at  least  five  (5)  hotels  (in a  single
transaction or series of related transactions),  or (c) are a replacement of any
hotel  otherwise  permitted  to be  located in any  Restricted  Trade Area under
Section  11.21.A or an expansion of any of the  properties  otherwise  permitted
under Section 11.21.A.

         11.22 Arbitration. Landlord, Tenant and Manager agree that any disputes
for which  Arbitration is provided under this Agreement and the Owner  Agreement
shall be subject to one arbitration  process which shall be binding on Landlord,
Manager and Tenant.  For  purposes  of this  Agreement,  the Lease and the Owner
Agreement, Arbitration shall be conducted as provided in the Owner Agreement.

         11.23 Permitted  Contests.  Manager shall have the right to contest the
amount or validity of any Imposition, Legal Requirement,  Insurance Requirement,
lien, attachment, levy, encumbrance, charge or claim (collectively, "Claims") as
to any Hotel, by appropriate legal proceedings, conducted in good faith and with
due diligence, provided that (a) such contest shall not cause Landlord or Tenant
to be in default  under any  Qualifying  Mortgage or  reasonably  be expected to
result in a lien  attaching  to such Hotel,  unless such lien is fully bonded or
otherwise secured to the reasonable  satisfaction of Landlord,  (b) no part of a
Hotel nor any Gross Revenues therefrom shall be in any immediate danger of sale,
forfeiture,  attachment  or  loss,  and (c)  Manager  shall  indemnify  and hold
harmless Tenant and Landlord from and against any cost, claim,  damage,  penalty
or reasonable expense,  including reasonable attorneys' fees, incurred by Tenant
or Landlord in  connection  therewith or as a result  thereof.  Tenant agrees to
sign  all  required   applications  and  otherwise  cooperate  with  Manager  in
expediting  the matter,  provided  that Tenant shall not thereby be subjected to
any liability therefor  (including,  without limitation,  for the payment of any
costs or  expenses  in  connection  therewith),  and any such costs or  expenses
incurred in connection  therewith  shall be paid as a Deduction  with respect to
the applicable Hotel.  Landlord shall, in the Owner Agreement,  agree to join in
any such  proceedings if required  legally to prosecute  such contest,  provided
that  Landlord  shall  not  thereby  be  subjected  to  any  liability  therefor
(including,  without  limitation,  for the  payment of any costs or  expenses in
connection  therewith)  and Manager  agrees by agreement  in form and  substance
reasonably  satisfactory  to Landlord,  to assume and  indemnify  Landlord  with
respect to the same.  Any amounts  paid under any such  indemnity  of Manager to
Tenant or Landlord shall be a Deduction  with respect to such Hotel.  Any refund
of any Claims and such charges and  penalties or interest  thereon  which amount
shall be paid to Manager and included in Gross Revenues of such Hotel.

         11.24 Estoppel Certificates.  Each party to this Agreement shall at any
time and from time to time,  upon not less than thirty  (30) days' prior  notice
from the other party,  execute,  acknowledge and deliver to such other party, or
to any third party  specified by such other party,  a statement in writing:  (a)
certifying that this Agreement is unmodified and in full force and effect (or if
there have been modifications,  that the same, as modified, is in full force and
effect and stating the  modifications);  (b) stating  whether or not to the best
knowledge  of the  certifying  party (i) there is a  continuing  default  by the
non-certifying party in the performance or observance of any covenant, agreement
or

                                      -61-
<PAGE>

condition  contained in this  Agreement,  or (ii) there shall have  occurred any
event which,  with the giving of notice or passage of time or both, would become
such a default,  and, if so, specifying each such default or occurrence of which
the  certifying  party  may  have  knowledge;  (c)  stating  the  date to  which
distributions  of  Operating  Profit have been made;  and (d) stating such other
information as the non-certifying  party may reasonably request.  Such statement
shall be  binding  upon  the  certifying  party  and may be  relied  upon by the
non-certifying  party and/or such third party  specified  by the  non-certifying
party  as  aforesaid,   including,   without  limitation  its  lenders  and  any
prospective  purchaser or mortgagee of any Hotel or the leasehold estate created
by the Lease.  The  obligations  set forth in this Section  11.24 shall  survive
Termination  (that is,  each party  shall,  on  request,  within the time period
described above, execute and deliver to the non-certifying party and to any such
third party a statement certifying that this Agreement has been terminated).

         11.25  Indemnification.  Subject  to the  provisions  of  Section  9.04
hereof, and  notwithstanding  the existence of any insurance provided for herein
and without  regard to the policy  limits of any such  insurance,  Manager shall
protect,  indemnify and hold harmless  Tenant and Landlord for, from and against
all liabilities,  obligations,  claims,  damages,  penalties,  causes of action,
costs  and  reasonable  expenses  (including,  without  limitation,   reasonable
attorneys'  fees),  to the maximum  extent  permitted  by law,  imposed  upon or
incurred  by or  asserted  against  Tenant or  Landlord  by reason  of:  (a) any
accident,  injury  to or death  of  persons  or loss of or  damage  to  property
occurring on or about the Hotels or  adjoining  sidewalks or rights of way under
Manager's  control,  (b)  any  use,  misuse,  non-use,  condition,   management,
maintenance or repair by Manager or anyone  claiming under Manager of the Hotels
or  Tenant's  Personal  Property  or any  litigation,  proceeding  or  claim  by
governmental  entities or other third parties to which Tenant is made a party or
participant  relating to the Hotel's or Tenant's  Personal Property or such use,
misuse,  non-use,   condition,   management,   maintenance,  or  repair  thereof
including,  failure to perform obligations (other than Condemnation proceedings)
to which Tenant is made a party, (c) any Impositions that are the obligations of
Manager to pay pursuant to the applicable provisions of this Agreement,  and (d)
infringement  and other claims  relating to the  propriety  marks of Marriott or
Manager with respect to any Hotel; provided, however, that Manager's obligations
hereunder shall not apply to any liability,  obligation, claim, damage, penalty,
cause  of  action,  cost or  expense  to the  extent  the same  arises  from any
negligence or willful misconduct of Tenant,  its employees,  agents or invitees.
Manager, at its expense, shall contest, resist and defend any such claim, action
or  proceeding   asserted  or  instituted  against  Tenant  (and  shall  not  be
responsible  for any  duplicative  attorneys'  fees  incurred  by Tenant) or may
compromise or otherwise dispose of the same, with Tenant's prior written consent
(which consent may not be unreasonably withheld or delayed). In the event Tenant
shall  unreasonably  withhold or delay its consent,  Manager shall not be liable
pursuant to this Section 11.25 for any incremental increase in costs or expenses
resulting therefrom.  The obligations of Manager under this Section 11.25 are in
addition to the  obligations  set forth in Section  11.08.D and shall  survive a
Termination of this Agreement.  The indemnification provided for in this Section
11.25 shall not be applicable to Environmental  Costs, Other Environmental Costs

                                      -62-
<PAGE>

or Section 11.08 Costs,  with respect to which a specific  indemnity is provided
in Section 11.08 hereof, to the extent addressed therein.

         11.26  Prohibited  Transactions.  At any time during  which an Event of
Default shall have occurred and be continuing, Manager shall not permit to exist
or enter into any agreement or arrangement (other than the Franchise  Agreement)
whereby it engages in a  transaction  of any kind with an  Affiliate of Manager,
except on terms and conditions which are  commercially  reasonable and have been
negotiated at arm's length.

         11.27 Remedies Cumulative. To the maximum extent permitted by law, each
legal,  equitable or contractual  right,  power and remedy of Tenant or Manager,
now or hereafter  provided  either in this Agreement or by statute or otherwise,
shall be  cumulative  and  concurrent  and shall be in  addition  to every other
right,  power and remedy and the exercise or beginning of the exercise by Tenant
or  Manager  (as  applicable)  of any one or more of  such  rights,  powers  and
remedies shall not preclude the simultaneous or subsequent exercise by Tenant of
any or all of such rights, powers and remedies.

         11.28  Amendments  and  Modifications.  This  Agreement  shall  not  be
modified or amended except in writing signed by both parties.

         11.29 Construction;  Nonrecourse.  Anything contained in this Agreement
to the contrary notwithstanding, all claims against, and liabilities of, Manager
or  Tenant  arising  prior  to any date of  termination  or  expiration  of this
Agreement  with  respect  to  any  Hotel  shall  survive  such   termination  or
expiration.  In no event shall  Tenant be liable for any  consequential  damages
suffered  by  Manager  as the  result of a breach of this  Agreement  by Tenant.
Neither  this  Agreement  nor  any  provision  hereof  may be  changed,  waived,
discharged  or terminated  except by an instrument in writing  signed by all the
parties thereto. All the terms and provisions of this Agreement shall be binding
upon and  inure to the  benefit  of the  parties  hereto  and  their  respective
permitted successors and assigns. Each term or provision of this Agreement to be
performed  by  Manager  shall  be  construed  as  an  independent  covenant  and
condition.  Time is of the essence with respect to the exercise of any rights of
Manager or Tenant under this  Agreement.  Except as otherwise  set forth in this
Agreement, any obligations arising prior to the expiration or sooner termination
of this Agreement of Manager (including without limitation, any monetary, repair
and  indemnification  obligations)  and Tenant shall  survive the  expiration or
sooner termination of this Agreement.  Nothing contained in this Agreement shall
be  construed to create or impose any  liabilities  or  obligations  and no such
liabilities  or  obligations  shall  be  imposed  on any  of  the  shareholders,
beneficial owners, direct or indirect, officers, directors,  trustees, employees
or agents of Tenant or its  Affiliates  or  Manager  or its  Affiliates  for the
payment or performance  of the  obligations or liabilities of Tenant or Manager,
as applicable, hereunder.

         11.30 Counterparts;  Headings. This Agreement may be executed in two or
more counterparts,  each of which shall constitute an original,  but which, when
taken together,  shall  constitute but one instrument and shall become effective
as of the date hereof when copies hereof,  which, when taken together,  bear the
signatures  of each of the parties

                                      -63-
<PAGE>

hereto shall have been signed.  Headings in this  Agreement  are for purposes of
reference  only and  shall not limit or affect  the  meaning  of the  provisions
hereof.

         11.31 No Political Contributions. Notwithstanding any contained in this
Agreement to the  contrary,  no money or property of the Hotels shall be paid or
used or  offered,  nor shall  Tenant or Manager  directly or  indirectly  use or
offer, consent or agree to use or offer, any money or property of the Hotels (i)
in aid of any political  party,  committee or  organization,  (ii) in aid of any
corporation,  joint  stock or other  association  organized  or  maintained  for
political  purposes,  (iii) in aid of any  candidate  for  political  office  or
nomination for such office,  (iv) in connection  with any election,  (v) for any
political purpose whatever,  or (vi) for the reimbursement or indemnification of
any person for any money or property so used.

         11.32 Single Agreement.  The parties hereto  acknowledge and agree that
this Agreement and the Other  Management  Agreements are intended to constitute,
and shall constitute, a single transaction.

         11.33 REIT Qualification. Manager shall not take any action which would
cause  Landlord's  rental  income from Tenant under the Leases for the Hotels to
fail to qualify as "rents from real property" pursuant to Sections  856(d)(8)(B)
and 856(d)(9) of the Code.

         11.34  Further  Compliance  With  Section  856(d) of the Code.  Manager
represents  that,  as  of  the  date  hereof,  it is  an  "eligible  independent
contractor"  as defined  under  Section  856(d)(9)(A)  of the Code,  and further
agrees that it shall maintain such status except to the extent events outside of
Manager's control may affect Manager's independent contractor status.  Landlord,
Manager and Tenant  agree to  cooperate  in good faith to the purpose and effect
that Manager retain such status. This covenant shall apply for so long as one or
more of the Hotels are owned by Landlord (or a successor or permitted  assignee)
and leased to Tenant (or a  successor  or a  permitted  assignee)  as part of an
ownership  structure that is subject to REIT tax requirements.  Without limiting
the foregoing, Manager shall do each of the foregoing:

              A. Manager shall exercise its powers, privileges, responsibilities
and obligations under this Agreement (and related documents) so as to cause each
Hotel  to  qualify  as  a  "qualified  lodging  facility"  pursuant  to  Section
856(d)(9)(D) of the Code. In furtherance of the foregoing,  Manager shall comply
with any regulations or other administrative  guidance now or hereafter existing
with respect to qualification as an "eligible independent contractor" under said
Section 856(d)(9)(A).  Without limiting any of the foregoing,  Manager shall not
authorize any wagering  activities to be conducted at or in connection  with any
Hotel and Manager shall ensure that at least one-half of the guest rooms in each
such  Hotel  are  used on a  transient  basis  and that no  Hotel  will  include
amenities  and  facilities  which  are  not  customary  for  similarly  situated
properties.

              B. None of Manager or any of its Affiliates  (either  individually
or collectively) shall own, within the meaning of Section 856(d)(5) of the Code,
either

                                      -64-
<PAGE>

directly or indirectly, more than thirty-five percent (35%) of the shares of HPT
(whether by vote, value or number of shares).

              C. To the extent within the reasonable control of Manager and each
Affiliate,  neither Manager nor any Affiliate shall permit more than thirty-five
percent (35%) of the total combined voting power of Manager's or such Affiliates
outstanding  stock (or  thirty-five  percent  (35%) of the  total  shares of all
classes of its  outstanding  stock) to be owned,  within the  meaning of Section
856(d)(5) of the Code,  directly or  indirectly,  by one or more persons  owning
thirty-five  percent (35%) or more of the  outstanding  stock of HPT and Manager
and its  Affiliates  shall  otherwise  comply  with  any  regulations  or  other
administrative  guidance now or hereafter  existing under said Section 856(d)(5)
of the Code with respect to such ownership limits.

              D.  Manager,  or a person  who is a  "related  person"  within the
meaning of  Section  856(d)(9)(F)  of the Code (a  "Related  Person"),  shall be
actively  engaged in the trade or business of operating  or managing  "qualified
lodging  facilities"  for one or more  persons who are not Related  Persons with
respect to HPT or Tenant ("Unrelated  Persons").  Manager or such Related Person
shall  derive at least ten percent  (10%) of each of its revenue and profit from
operating or managing  "qualified  operating  facilities"  within the meaning of
Section 856(d)(9)(D) of the Code for Unrelated Persons and shall comply with any
regulations  or other  administrative  guidance now or hereafter  existing under
Section  856(d)(9)  of the Code with  respect to the amount of hotel  management
business that needs to be conducted with Unrelated  Persons in order for Manager
to qualify as an "eligible independent contractor" under said Section 856(d)(9).

         11.35 Adverse  Regulatory Event. In the event of an Adverse  Regulatory
Event  arising from or in  connection  with this  Agreement,  Tenant and Manager
shall work  together  in good faith to amend this  Agreement  to  eliminate  the
impact of such Adverse Regulatory  Effect.  For purposes of this Agreement,  the
term "Adverse Regulatory Effect" means any time that a law, statute,  ordinance,
code,  rule or  regulation  imposes upon Tenant (or could imposes upon Tenant in
Tenant's reasonable opinion), any material threat to either Landlord's status as
a "real estate  investment  trust" under the Code or to the treatment of amounts
paid to such Landlord as "rents from real property"  under Section 856(d) of the
Code.  Each of  Manager  and  Tenant  shall  inform  the  other  of any  Adverse
Regulatory  Event of which it is aware  and which it  believes  likely to impair
compliance of any of the Hotels with respect to the  aforementioned  sections of
the Code.

         11.36 Commercial  Leases.  For so long as one or more of the Hotels are
owned by Landlord and leased to Tenant as part of an ownership structure that is
subject to REIT tax  requirements,  Manager  agrees that Manager shall not enter
into any sublease with respect to any Hotel (or any part thereof)  without first
providing  Landlord  with a copy thereof.  Landlord  shall have twenty (20) days
from the date of its receipt of such proposed sublease to give written notice to
Manager  indicating  whether  such  sublease  would,  in  Landlord's  reasonable
judgment,  provide for a rental to be paid by the sublessee thereunder based (or
considered to be based),  in whole or in part, on the income or profits  derived
by the business activities of the sublessee, or any other formula, such

                                      -65-
<PAGE>

that any portion of the rent payable under the sublease would fail to qualify as
"rents from real property"  within the meaning of Section 856(d) of the Code, or
any similar or successor  provisions thereto. If Landlord provides timely notice
of its determination that such proposed sublease would provide for such a rental
then Manager will not enter into such proposed sublease.  If Landlord shall fail
to give Manager such written notice within such twenty (20) day period, Landlord
shall be estopped from  claiming  that such sublease  violates the terms of this
Section 11.36.

         11.37 Waiver of Jury Trial.  Tenant and Manager each hereby absolutely,
irrevocably and  unconditionally  waive trial by jury in any litigation,  claim,
action, suit or proceeding,  at law or in equity,  arising out of, pertaining to
or in any way associated  with this  Agreement or the  covenants,  undertakings,
representations  or  warranties  set forth  herein or the  relationships  of the
parties hereto.

                                   ARTICLE XII

                               DEFINITION OF TERMS

         12.01    Definition of Terms.

         The  following  terms  when  used in this  Agreement  and the  Addendum
attached hereto shall have the meanings indicated:

         "Accounting  Period"  shall mean the four (4) week  accounting  periods
having the same beginning and ending dates as Manager's four (4) week accounting
periods,  except that an  Accounting  Period may  occasionally  contain five (5)
weeks when necessary to conform Manager's accounting system to the calendar.

         "Addenda" shall mean the Addenda attached hereto from time to time.

         "Additional  Manager  Advances"  shall mean  advances by Manager  under
Sections 4.01.E, 4.03.B, 4.03.D, 4.05.A, and 9.03.B hereof.

         "Additional Marriott Advance" shall mean an Additional Marriott Advance
under the Pooling Agreement,  and if the Pooling Agreement does not apply to any
Hotel,  the  portion  of such  Additional  Marriott  Advances  determined  to be
allocable to such Hotel in accordance with the Pooling Agreement.

         "Additional  Rent"  shall,  for any period,  for each  Hotel,  mean the
amount of Additional  Rent allocable to such Hotel which accrued under the Lease
for such period.

         "Advance  Notice"  shall  have the  meaning  ascribed  to that  term in
Section 4.03.B.2 hereof.

         "Affiliate"  shall mean with respect to Person,  (a) in the case of any
such Person which is a partnership,  any partner in such partnership, (b) in the
case of any such Person

                                      -66-
<PAGE>

which is a limited liability company,  any member of such company, (c) any other
Person which is a Parent,  or  Subsidiary or a Subsidiary or Parent with respect
to such  Person or to one or more of the persons  referred  to in the  preceding
clauses  (a) and (b),  and (d) any other  Person  who is an  officer,  director,
trustee or employee of, or partner in, such Person or any Person  referred to in
the preceding clauses (a), (b) and (c).

         "Agreement"  shall mean this  Management  Agreement  between Tenant and
Manager,  including  the  exhibits  and the Addenda  from time to time  attached
hereto.

         "Agreement  to Lease"  shall mean the  Agreement to Lease and Manage by
and among Marriott,  Landlord, Tenant, Manager, and affiliates of Marriott dated
as of June  15,  2001,  with  respect  to the  Hotels  and the  other  Portfolio
Properties.

         "Annual Operating  Projection" shall have the meaning ascribed to it in
Section 4.04 hereof.

         "Arbitration" shall mean the process described in Section 11.22 hereof.

         "Available  Funds"  shall  have the  meaning  ascribed  to that term in
Section 3.02.B.2 hereof.

         "Award" shall have the meaning ascribed to it in the Lease.

         "Base Gross Revenues" shall mean, for each Hotel,  the amount set forth
on the  applicable  Addendum  for such  Hotel,  and if not  included  on such an
Addendum,  then  Gross  Revenues  for the Base  Year for each  Hotel,  provided,
however,  that in the event that,  with respect to any Fiscal  Year,  or portion
thereof,  for  any  reason  (including,   without  limitation,   a  casualty  or
condemnation)  there shall be, for one hundred  eighty (180) days or more in any
Fiscal  Year,  a reduction  in the number of rooms at a Hotel or a change in the
services  provided  at  a  Hotel  (including,  without  limitation,  closing  of
restaurants)  from the number of rooms or the services  provided during the Base
Year,  in  determining  Tenant's  Second  Priority  payable with respect to such
Fiscal Year,  Base Gross Revenues shall be reduced as follows:  (a) in the event
of a  complete  closing of a Hotel,  Gross  Revenues  attributable  to the Hotel
during the Base Year shall be subtracted from Base Gross Revenues throughout the
period  of such  closing;  (b) in the event of a  partial  closing  of the Hotel
affecting any number of guest rooms in such Hotel,  Gross Revenues  attributable
to guest room occupancy or guest room service at such Hotel during the Base Year
shall be ratably allocated among all guest rooms in service at such Hotel during
the Base Year and all such Total Hotel Sales  attributable to rooms no longer in
service shall be subtracted  from Base Gross  Revenues  throughout the period of
such closing; (c) in the event of a closing of a restaurant,  all Gross Revenues
attributable  to such  restaurant  during the Base Year shall be subtracted from
Base Gross Revenues for such Hotel  throughout  the period of such closing;  and
(d) in the event of any other change in  circumstances  affecting a Hotel,  Base
Gross Revenues shall be equitably  adjusted in such manner as Manager and Tenant
shall reasonably agree.

                                      -67-
<PAGE>

         "Base  Management Fee" shall,  during any given Fiscal Year (or portion
thereof),  mean,  for each Hotel,  an amount  equal to the  positive  difference
obtained  by  subtracting  the System Fee for such Hotel for such period from an
amount  equal to seven  percent  (7%) of Gross  Revenues for such Hotel for such
period.

         "Base  Year"  shall  mean,  for each  Hotel,  the year set forth on the
Addendum applicable to such Hotel, and if not set forth on an Addendum, for each
Hotel acquired by Landlord prior to the date hereof, the second full Fiscal Year
of operation of such Hotel;  and for each Hotel acquired by Landlord on or after
the date  hereof,  the 2002 Fiscal Year (which  begins on or about  December 29,
2001); provided,  however, if there shall occur or shall have occurred, prior to
the  expiration of the Base Year  described in the preceding  clause,  any force
majeure  with  respect to a Hotel  which  causes or shall have caused a material
decline in Gross  Revenues  during the second full Fiscal Year of  operation  of
such Hotel,  the Base Year shall be adjusted to be the first full Fiscal Year of
operation of such Hotel after the termination of any such force majeure event.

         "Buildings"  shall have the meaning  ascribed to that term in Section A
of the Recitals.

         "Business Day" shall mean any day other than Saturday,  Sunday,  or any
other day on which banking  institutions in the Commonwealth of Massachusetts or
the State of Maryland are authorized by law or executive action to close.

         "Capital  Addition"  shall have the  meaning  ascribed  to that term in
Section 5.08.A hereof.

         "Central Office  Services" shall have the meaning ascribed to that term
in Section 1.03 hereof.

         "Chain  Services"  shall  have the  meaning  ascribed  to that  term in
Section 1.03; provided,  however, that the Base Management Fee for each Hotel is
intended to cover only the services  currently listed (as of the Effective Date)
in clause (i) of the definition of Chain Services in Section 1.03 other than the
charges for the national and regional reservations system service which shall be
paid as a Deduction. Accordingly, if there are expenditures that were originally
treated as Deductions but that are later  determined to be more properly treated
as Chain Services,  or if additional central or regional services are (after the
Effective Date) furnished for the benefit of hotels in the System,  each Hotels'
allocable  share of such  expenditures  shall be treated as Deductions and shall
not be covered by the Base Management Fee for such Hotels.  Conversely, if there
are  expenditures  that were (as of the Effective  Date) listed in clause (i) of
the  definition  of Chain  Services  and  included in Chain  Services (as of the
Effective Date) but that are later  determined to be more properly  furnished at
the Hotels instead of on a central or regional basis,  such  expenditures  shall
not later be treated as a Deduction but shall continue to be covered by the Base
Management  Fee for each of such  Hotels.  Any fees for services not included in
the Base Management Fee for the Hotels shall be consistent with fees established
for the System.

                                      -68-
<PAGE>

         "Claims" shall have the meaning  ascribed to that term in Section 11.23
hereof.

         "Code" shall mean the Internal Revenue Code of 1986, as amended.

         "Condemnation"  shall mean, with respect to any Hotel, (a) the exercise
of any  governmental  power with respect to such Hotel or any interest  therein,
whether  by legal  proceedings  or  otherwise,  by a  Condemnor  of its power of
condemnation,  (b) a voluntary  sale or  transfer  of any Hotel or any  interest
therein,  to any Condemnor,  either under threat of  condemnation or while legal
proceedings  for  condemnation  are  pending,  or  (c)  a  taking  or  voluntary
conveyance of any Hotel or any interest  therein,  or right accruing  thereto or
use thereof, as the result or in settlement of any Condemnation or other eminent
domain proceeding  affecting any Hotel or any interest  therein,  whether or not
the same shall have actually been commenced.

         "Condemnor" shall mean any public or quasi-public authority, or private
corporation or individual, having the power of Condemnation.

         "Controlling  Interest"  shall mean (i) if the Person is a corporation,
the right to exercise,  directly or indirectly, more than fifty percent (50%) of
the voting rights  attributable to the shares of such Person (through  ownership
of such shares or by contract), or (ii) if the Person is not a corporation,  the
possession,  directly  or  indirectly,  of the  power to  direct  or  cause  the
direction of the business, management or policies of such Person.

         "Deduction"  shall  have  the  meaning  ascribed  to  that  term in the
definition of Operating  Profit.  Deductions shall not include (i) payments with
respect  to items for  Manager  has given an  indemnity,  to the  extent of such
indemnity,  (ii)  payments with respect to items for which Manager has agreed to
be liable at its own cost and expense herein, (iii) any item specifically stated
not to be a  Deduction  herein,  and  (iv) any item  for  which  Manager  or any
Affiliate  has agreed to be liable (other than at the cost and expense of Tenant
or any  Affiliate)  under  the  terms of any  Incidental  Document  or any other
agreement between Manager or any Affiliate and Tenant or any Affiliate.

         "Default" shall have the meaning ascribed to that term in Section 9.01.

         "Disbursement Rate" shall have the meaning ascribed to that term in the
Leases.

         "Effective  Date" shall have the  meaning  ascribed to that term in the
Preamble.

         "Environmental  Costs" shall have the meaning  ascribed to that term in
Section 11.08.C hereof.

         "Environmental  Laws" shall have the  meaning  ascribed to that term in
Section 11.08.B hereof.

                                      -69-
<PAGE>

         "Environmental  Notice" shall have the meaning ascribed to that term in
Section 11.08.A hereof.

         "Environmental Obligation" shall have the meaning ascribed to that term
in Section 11.08.A hereof.

         "Estimated  Costs"  shall  have the  meaning  ascribed  to that term in
Section 11.08.D hereof.

         "Excess Gross Revenues" shall mean, with respect to each Hotel, for any
Fiscal Year, the amount of Gross Revenues for such Fiscal Year in excess of Base
Gross Revenues, prorated for any partial Fiscal Year.

         "Existing  CC&R's"  shall  have the  meaning  ascribed  to that term in
Section 8.02.A.

         "Existing Leases" shall mean the leases set forth on Exhibit C attached
hereto, to the extent the same have not been previously assigned pursuant to the
Agreement to Lease.

         "Event of  Default"  shall have the  meaning  ascribed  to that term in
Section 9.01.

         "FF&E" shall mean furniture, furnishings, fixtures, kitchen appliances,
vehicles,  carpeting and equipment,  including front desk and back-of-the  house
computer  equipment,  but shall not include Fixed Asset Supplies or any computer
software of any type  (including  upgrades and  replacements)  owned by Manager,
Marriott, an Affiliate of Manager or Marriott, or the licensor of any of them.

         "First  Incentive  Management  Fee"  shall  mean:  (a) for  each  Hotel
acquired by Landlord  prior to the date  hereof,  an amount  equal to the number
obtained  by  subtracting  from a  number  equal  to what  would  have  been the
Operating  Profit for such Hotel had this  Agreement been in effect with respect
to such Hotel for the entire  2001  Fiscal Year (which 2001 Fiscal Year began on
or about December 30, 2000), (i) the sum of the  distributions  which would have
been made if such Hotel had been subject to this  Agreement  for the entire 2001
Fiscal Year pursuant to Sections 3.02.B.1 through 3.02.B.7 hereof,  and (ii) Six
Thousand  Four  Hundred  Fifty One Dollars  ($6,451.00),  and (b) for each Hotel
acquired by Landlord on or after the date hereof, Zero Dollars ($0.00).

         "Fiscal  Year"  shall  mean  Manager's  Fiscal  Year  which  as of  the
Effective  Date ends at  midnight  on the Friday  closest to December 31 in each
calendar year; the new Fiscal Year begins on the Saturday immediately  following
said  Friday.  Any  partial  Fiscal  Year  between  the  Effective  Date and the
commencement  of the first full Fiscal Year shall  constitute a separate  Fiscal
Year. A partial Fiscal Year between the end of the last full Fiscal Year and the
Termination of this Agreement  shall also  constitute a separate Fiscal Year. If
Manager's Fiscal Year is changed in the future,  appropriate  adjustment to this
Agreement's  reporting  and  accounting  procedures  shall  be  made;  provided,
however,  that

                                      -70-
<PAGE>

no such change or  adjustment  shall alter the term of this  Agreement or in any
way reduce or in any  material  respect  delay the  distributions  of  Operating
Profit or other payments due hereunder.

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

         "Franchise  Agreement" means, with respect to each Hotel, the Franchise
Agreement  entered into  pursuant to the Agreement to Lease with respect to such
Hotel by and between Marriott and Tenant,  as the same may be amended,  modified
or supplemented from time to time.

         "Franchisor"  shall  have the  meaning  ascribed  to that  term in each
Franchise Agreement.

         "Future CC&R's" shall have the meaning ascribed to that term in Section
8.02.A hereof.

         "GAAP"   shall   mean   generally   accepted   accounting   principles,
consistently applied.

         "Government  Agencies" shall mean any court, agency,  authority,  board
(including, without limitation,  environmental protection, planning and zoning),
bureau,  commission,   department,  office  or  instrumentality  of  any  nature
whatsoever of any governmental or  quasi-governmental  unit of the United States
or the State or any county or any political subdivision of any of the foregoing,
whether now or hereafter in existence,  having  jurisdiction  over Tenant or the
Hotels operated thereon.

         "Gross  Revenues" shall mean for any period with respect to each Hotel,
all revenues and  receipts of every kind derived from  operating  such Hotel and
all departments and parts thereof during such period, including, but not limited
to: income (from both cash and credit  transactions)  after  deductions  for bad
debts and  discounts  for prompt cash  payments and refunds from rental of Guest
Rooms and other spaces at the Hotel, telephone charges, stores, offices, exhibit
or sales space of every kind;  license,  lease and  concession  fees and rentals
(not including gross receipts of licensees, lessees and concessionaires); income
from vending  machines;  income from parking;  health club membership fees; food
and beverage sales; wholesale and retail sales of merchandise;  service charges;
and  proceeds,  if any,  from  business  interruption  or other  loss of  income
insurance;  provided,  however,  that  Gross  Revenues  shall  not  include  the
following:  gratuities to employees of the Hotels;  federal,  state or municipal
excise, sales or use taxes or any other taxes collected directly from patrons or
guests or included as part of the sales price of any goods or services; proceeds
from the sale of FF & E; interest  received or accrued with respect to the funds
in the  Reserves or the other  operating  accounts of the Hotels;  any  refunds,
rebates,  discounts and credits of a similar nature,  given, paid or returned in
the course of obtaining Gross Revenues or components thereof; insurance

                                      -71-
<PAGE>

proceeds (other than proceeds from business interruption or other loss of income
insurance;  condemnation  proceeds (other than for a temporary  taking);  or any
proceeds  from  any  Sale  of a  Hotel  or  from  the  refinancing  of any  debt
encumbering any Hotel.

         "Gross Room  Revenues"  shall  include with respect to each Hotel,  all
gross  revenues  attributable  to or payable  for rental of guest  rooms at such
Hotel, after deductions for bad debts and discounts for prompt cash payments and
refunds from Rental of Guest Rooms,  including,  without limitation,  all credit
transactions,  whether or not  collected,  but  excluding  (i) any sales or room
taxes collected by Manager for transmittal to the appropriate  taxing authority,
and (ii) any  revenues  from sales or rentals of  ancillary  goods,  such as VCR
rentals, telephone income and fireplace log sales and sales from in-room service
bars.  Gross Room  Revenues  shall also include the  proceeds  from any business
interruption   insurance   applicable   to   loss   of   revenues   due  to  the
non-availability  of guest rooms and for  guaranteed  no-show  revenue  which is
collected.  Gross Room Revenues  shall be accounted  for in accordance  with the
Uniform System of Accounts.

         "Guest Room" shall mean with  respect to each Hotel,  a lodging unit in
such Hotel.

         "Hazardous Substances" shall mean any substance:

                  the  presence  of  which  requires  or may  hereafter  require
         notification,  investigation or remediation under any federal, state or
         local statute, regulation, rule, ordinance, order, action or policy; or

                  which is or becomes defined as a "hazardous waste", "hazardous
         material" or "hazardous  substance"  or  "pollutant"  or  "contaminant"
         under  any  present  or  future   federal,   state  or  local  statute,
         regulation, rule or ordinance or amendments thereto including,  without
         limitation, the Comprehensive Environmental Response,  Compensation and
         Liability  Act (42 U.S.C.  et seq.) and the Resource  Conservation  and
         Recovery  Act (42  U.S.C.  section  6901 et seq.)  and the  regulations
         promulgated thereunder; or

                  which is toxic, explosive, corrosive,  flammable,  infectious,
         radioactive,  carcinogenic,  mutagenic or otherwise hazardous and is or
         becomes regulated by any governmental  authority,  agency,  department,
         commission,  board, agency or instrumentality of the United States, any
         state of the United States, or any political subdivision thereof; or

                  the  presence  of  which  at  a  Hotel  causes  or  materially
         threatens to cause an unlawful  nuisance upon such Hotel or to adjacent
         properties  or poses or  materially  threatens to pose a hazard to such
         Hotel or to the health or safety of persons on or about such Hotel; or

                  without  limitation,  which contains gasoline,  diesel fuel or
         other petroleum hydrocarbons or volatile organic compounds; or

                                      -72-
<PAGE>

                  without limitation,  which contains polychlorinated  biphenyls
         (PCBs) or asbestos or urea formaldehyde foam insulation; or

                  without  limitation,   which  contains  or  emits  radioactive
         particles, waves or material; or

                  without limitation, constitutes materials which are now or may
         hereafter  be subject to  regulation  pursuant  to the  Material  Waste
         Tracking  Act  of  1988,  or any  applicable  laws  promulgated  by any
         Government Agencies.

         "Holdback Agreement" shall mean the Holdback Agreement dated as of June
15, 2001 between Marriott and Tenant.

         "Holdback  Agreement Advances" shall mean advances which Tenant elects,
in its discretion, to make, pursuant to the terms of the Holdback Agreement.

         "Hotel"  shall mean each Site together with the Buildings and all other
improvements  constructed  or to be  constructed  on such Site  pursuant to this
Agreement,  and all FF&E  installed or located on such Site or in the Buildings,
and all easements or other appurtenant rights thereto owned by Landlord together
with, for purposes of this Agreement, all office equipment, telephone equipment,
motor vehicles,  and other equipment leased by Tenant as permitted hereunder and
Fixed Asset  Supplies at such Hotel,  in each of the foregoing  instances as and
when the same hereunder subject to the terms of this Agreement.

         "HPT" shall mean  Hospitality  Properties  Trust,  its  successors  and
permitted assigns.

         "Impositions" shall have the meaning ascribed to that term in the Lease
with the exclusions set forth in Section 7.01.C hereof.

         "Incidental  Documents"  shall  mean  all  documents  entered  into  by
Marriott,   Manager,  Tenant,  Landlord,  HPT,  the  managers  under  the  Other
Management  Agreements  and/or  Marriott  Kauai,  Inc.  in  connection  with the
transactions  contemplated  by the  Agreement  to  Lease,  which  documents  are
specifically enumerated in Sections 11(a) and 12(a) of such Agreement to Lease.

         "Index" shall mean the Consumer  Price Index for Urban Wage Earners and
Clerical  Workers,  All-Cities,  All Items  1982-1984 = 100, as published by the
Bureau of Labor  Statistics  or, in the event  publication  thereof  ceases,  by
reference to whatever  index then  published by the United States  Department of
Labor at that time is most nearly  comparable as a measure of general changes in
price levels for urban areas, as reasonably determined by Manager and Tenant.

         "Initial Term" shall have the meaning  ascribed to that term in Section
2.01.A hereof.

                                      -73-
<PAGE>

         "Initial  Working  Capital" shall mean, with respect to each Hotel, the
amount of Initial  Working Capital for such Hotel as set forth on the applicable
Addendum.

         "Insurance  Requirements"  shall mean all terms of any insurance policy
required by this Agreement and all requirements of the issuer of any such policy
and all orders, rules and regulations and any other requirements of the National
Board of Fire  Underwriters  (or any other body  exercising  similar  functions)
binding upon the Hotels.

         "Insurance  Retention"  shall have the meaning ascribed to that term in
Section 6.01.F hereof.

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

         "Landlord" shall mean as of any date the landlord under the Lease as of
such date.

         "Landlord  Default"  shall have the  meaning  ascribed  to that term in
Section 9.01.F hereof.

         "Landlord  Sale of a Hotel"  shall have the  meaning  ascribed  to term
"Sale of a Hotel" in the Owner Agreement.

         "Leases" shall mean the Lease  Agreements  between  Landlord and Tenant
(in certain  instances,  as assignee of an Affiliate of Marriott) in effect from
time to time  relating  to the Hotels  and other  Portfolio  Properties  and any
replacement leases of the Hotels and other Portfolio Properties by the fee owner
thereof to Tenant which  provides for the  Landlord to fund  additional  capital
investment  as  provided  for under  such  initial  lease,  and any  amendments,
waivers,  modifications  thereto approved by Manager in writing,  which approval
shall not be  unreasonably  withheld  provided  the same does not (a) impose any
material cost, expense or obligation upon Manager or (b) reduce any amounts that
would otherwise be payable to Manager  hereunder or (c) otherwise be expended to
interfere  with  the  operation  and  maintenance  of the  Hotels  or  Manager's
obligations hereunder.

         "Lease  Term"  shall have the  meaning  ascribed to that term under the
Lease.

         "Lease  Year" shall mean each  Fiscal Year with the initial  Lease Year
commencing  on the  commencement  of the Lease  term and  ending  on the  Friday
closest to December 31.

         "Legal  Requirements"  shall  mean,  with  respect to each  Hotel,  all
federal, state, county,  municipal and other governmental statutes, laws, rules,
orders, regulations,  ordinances,  judgments,  decrees and injunctions affecting
such Hotel or the maintenance,  construction,  alteration or operation  thereof,
whether now or hereafter enacted or in

                                      -74-
<PAGE>

existence,   including,   without   limitation,   (a)  all  permits,   licenses,
authorizations,  certificates and regulations  necessary to operate such Hotels,
and (b) all covenants,  agreements,  restrictions and encumbrances  contained in
any  instruments at any time in force  affecting such Hotels which either (A) do
not require the  approval  of Manager,  or (B) have been  approved by Manager as
required  hereby,  including  those  which  may (i)  require  material  repairs,
modifications  or alterations in or to such Hotels or (ii) in any way materially
and  adversely  affect  the  use  and  enjoyment  thereof,   but  excluding  any
requirements  arising  as  a  result  of  Landlord's  status  as a  real  estate
investment trust, and (c) all valid and lawful  requirements of courts and other
government   agencies  or  authorities   pertaining  to  reporting,   licensing,
permitting,  investigation,  remediation and removal of underground improvements
(including, without limitation, treatment or storage tanks, or water, gas or oil
wells), or emissions,  discharges,  releases or threatened releases of Hazardous
Substances,  chemical substances,  pesticides,  petroleum or petroleum products,
pollutants,  contaminants or hazardous or toxic substances,  materials or wastes
whether solid, liquid or gaseous in nature, into the environment, or relating to
the manufacture,  processing,  distribution,  use, treatment, storage, disposal,
transport  or  handling  of  Hazardous  Substances,   underground   improvements
(including, without limitation, treatment or storage tanks, or water, gas or oil
wells), or pollutants,  contaminants or hazardous or toxic substances, materials
or wastes, whether solid, liquid of gaseous in nature.

         "License"  shall  mean  any  license,   permit,   decree,  act,  order,
authorization  or other  approval or  instrument  which is necessary in order to
operate each Hotel in accordance with Legal  Requirements and pursuant to System
Standards and otherwise in accordance with this Agreement.

         "Marriott  Limited Rent Guaranty"  shall mean that certain  Amended and
Restated Limited Rent Guaranty dated as of June 15, 2001 by and between Marriott
and an Affiliate of Tenant with respect to the Existing Leases.

         "Marriott Guaranty  Agreement" shall mean the Guaranty dated as of June
15, 2001 by and between Marriott and Tenant.

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

         "Manager  Default"  shall  have the  meaning  ascribed  to such term in
Section 9.01.

         "Manager Event of Default" shall have the meaning ascribed to such term
in Section 9.01.

         "Manager's  Reserve  Advance" shall have the meaning  ascribed to it in
Section 5.07.F hereof.

         "Marketing Fund" shall mean that certain fund (or any successor to such
fund)  maintained by Marriott,  to pay for the following System costs: all costs
associated with  developing,  preparing,  producing,  directing,  administering,
conducting,  maintaining and

                                      -75-
<PAGE>

disseminating   advertising,   marketing,   promotional  and  public   relations
materials,  programs,  campaigns,  sales and  marketing  seminars  and  training
programs,  and  similar  activities  of every  kind and  nature,  including  the
Courtyard by Marriott  directory;  and  conducting  market  research;  provided,
however,  that any costs  described in this definition of Marketing Fund may, at
the  option  of the  Manager  and any  association  which  may be  formed by the
Courtyard  by  Marriott  franchisees,  be charged  directly to each hotel in the
System on the basis of actual  use by or  benefit  to each  hotel  and,  in such
event,  shall become  Deductions.  Tenant shall contribute to the Marketing Fund
two percent (2%) of Gross Room  Revenues of each Hotel or such other amount (not
to exceed  three  percent  (3%) of Gross Room  Revenues as may be  provided  for
members of the System by  Franchisor  from time to time,  and such  contribution
shall be a Deduction.

         "Marriott"  shall  mean  Marriott   International,   Inc.,  a  Delaware
corporation.

         "Marriott Companies" shall mean Manager, Marriott, and any Affiliate of
Manager or Marriott.

         "Marriott  Guaranty  Advances"  shall mean advances  under the Marriott
Guaranty  Agreement  allocated to pay, inter alia,  Tenant's First Priority with
respect to the Hotel.

         "Minimum Rent" shall, for each Hotel,  for any period,  mean the amount
of Minimum Rent  allocable to such Hotel which  accrues under the Lease for such
period.

         "Mortgage" shall mean any mortgage indebtedness obtained by Landlord to
finance a Hotel, and may take the form of a mortgage,  deed of trust or security
document customarily in use in the jurisdiction in which the Site for such Hotel
is located.

         "Mortgagee" shall mean the holder of any Mortgage.

         "Officer's  Certificate"  shall  mean  a  certificate  executed  by the
Manager's chief accounting  officer which certifies that with respect to interim
accountings and the annual  statement  delivered under Section  4.01.D.2 hereof,
that the  accompanying  accounting or statement  has been  properly  prepared in
accordance with GAAP and fairly presents the financial operations of the Hotels.

         "Operating  Loss" shall mean,  with  respect to each Hotel,  a negative
Operating Profit for such Hotel.

         "Operating  Profit" shall mean, with respect to each Hotel,  the excess
of Gross Revenues over the following deductions, but excluding (i) payments with
respect  to items for  Manager  has given an  indemnity,  to the  extent of such
indemnity,  (ii)  payments with respect to items for which Manager has agreed to
be liable at its own cost and expense herein, (iii) any item specifically stated
not to be a  Deduction  herein,  and  (iv) any item  for  which  Manager  or any
Affiliate  has agreed to be liable (other than at the cost and expense of Tenant
or any  Affiliate)  under  the  terms of any  Incidental  Document  or any other
agreement  between  Manager  or  any  Affiliate  and  Tenant  or  any  Affiliate

                                      -76-
<PAGE>

("Deductions")  incurred by Manager in accordance  with the Operating  Standards
and the terms of this Agreement, on behalf of Tenant, in operating the Hotel:

              1. the cost of sales, including, without limitation, compensation,
fringe  benefits,  payroll taxes and other costs related to Hotel employees (the
foregoing costs shall not include salaries and other employee costs of executive
personnel  of Manager  who do not work at the Hotel on a regular  basis;  except
that the foregoing  costs shall include the allocable  portion of the salary and
other  employee  costs of any  general  manager or other  supervisory  personnel
assigned to a "cluster" of hotels which includes the Hotel);

              2. departmental expenses incurred at departments within the Hotel;
administrative  and  general  expenses;  the cost of  marketing  incurred by the
Hotel;  advertising and business  promotion  incurred by the Hotel; heat, light,
and power;  computer line charges;  and routine  repairs,  maintenance and minor
alterations treated as Deductions under Section 5.02;

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

              4. a reasonable reserve for uncollectible  accounts  receivable as
determined by Manager;

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

              6. all costs and fees of  technical  consultants  and  operational
experts who are retained or employed by Manager and/or Affiliates of the Manager
for specialized  services  (including,  without  limitation,  quality  assurance
inspectors) and the cost of attendance by employees of the Hotel at training and
manpower development programs sponsored by Manager;

              7. the System Fee;

              8.  insurance  costs and  expenses  as  provided  in Section  6.01
hereof;

              9. taxes, if any,  payable by or assessed  against Manager related
to this Agreement or to Manager's operation of the Hotel (exclusive of Manager's
income taxes) and all Impositions;

              10. transfers to the Hotel's Reserve required  pursuant to Section
5.03.C hereof;

              11. transfers required to be made, as they may change from time to
time,  to the  Marketing  Fund in order  for the Hotel to remain a member of the
System and shall be consistent with policies established for the System;

                                      -77-
<PAGE>

              12.  all usual and  customary  sums  charged to the Hotel for room
reservations  obtained  for the Hotel  through  the  reservation  system used by
Manager or  through  other  reservation  facilities  operated  by Manager or its
Affiliates which are charged to members of the System;

              13. the Hotel's  share of the costs and expenses of  participating
in programs and activities prescribed for members of the System (including those
central or regional  services  set forth in Section  1.03(c)(ii)  hereof) to the
extent  such  costs are not paid from the  Marketing  Fund (and  which  shall be
consistent with policies established for the system);

              14. the costs of  commercially  reasonable  efforts of causing the
Hotel to be in compliance with each and every provision of the Lease (regardless
of whether or not such compliance is a requirement of this Agreement);

              15.  such  other  costs and  expenses  incurred  by Manager as are
specifically   provided  for  elsewhere  in  this  Agreement  or  are  otherwise
reasonably necessary for the proper and efficient operation of the Hotel; and

              16.  such other  costs and  expenses  paid to  Landlord  or Tenant
pursuant to the Lease or this  Agreement,  if such costs and expenses would have
been a Deduction if paid directly by Manager to a third person in respect of the
Hotel.

         The term  "Deductions"  shall not  include  (a) debt  service  payments
pursuant to any Mortgage, and (b) payments pursuant to equipment leases or other
forms of financing  obtained by Tenant for the FF&E located in or connected with
a Hotel, both of which shall be paid or caused to be paid by Tenant from its own
funds, the Reserve to the extent permitted hereunder,  or from funds provided by
Landlord under the Lease.

         The term  "Deductions"  shall not  include (a) Rent  payable  under the
Lease, (b) any  reimbursement to Manager for advances Manager makes with respect
to a Hotel as permitted hereunder, and (c) the Priority Management Fee, the Base
Management  Fee, the First  Incentive  Management  Fee and the Second  Incentive
Management Fee for any Hotel.

         "Operating Profit After First Incentive Management Fee" shall mean, for
each Hotel,  for any period,  the amount of  Operating  Profit  remaining  after
deducting amounts paid or payable in respect of items (1) through (7) of Section
3.02.B hereof.

         "Operating  Standards"  shall have the meaning ascribed to such term in
Section 1.02.A hereof.

         "Other  Environmental  Costs"  shall have the meaning  ascribed to such
term in Section 11.08.C hereof.

                                      -78-
<PAGE>

         "Other Franchise  Agreements"  means the Franchise  Agreements  between
Marriott or an  Affiliate  and Tenant with respect to the  Portfolio  Properties
other than the Hotels.

         "Other Management  Agreements" means the Management  Agreements between
Manager or an  Affiliate  and Tenant with  respect to the  Portfolio  Properties
other than the Hotels.

         "Overdue  Rate"  shall have the  meaning  ascribed  to that term in the
Lease.

         "Owner  Agreement"  shall mean the Owner  Agreement  dated of even date
herewith by and among Landlord, Tenant, Marriott and Manager with respect to the
Hotels and other Portfolio Properties.

         "Parent"  shall mean,  with respect to any Person,  any Person who owns
directly, or indirectly through one or more Subsidiaries or Affiliates,  greater
than fifty percent of the voting or beneficial interest in, or otherwise has the
right  or power  (whether  by  contract,  through  ownership  or  securities  or
otherwise) to control, such Person.

         "Person" shall mean any individual or entity, and the heirs, executors,
administrators, legal representatives, successors and assigns of such individual
or entity where the context so admits.

         "Pooling  Agreement" means initially the Pooling Agreement by and among
Manager,  Marriott,  Tenant and others dated as of the date of the  Agreement to
Lease and any  subsequent  Pooling  Agreement  under  which the Gross  Revenues,
Working  Capital,  and  Reserves of the Hotels are pooled  with Gross  Revenues,
Working Capital and Reserves of the other Portfolio Properties,  as the same may
be supplemented, amended, or modified from time to time.

         "Portfolio  Properties"  shall mean, as of any date, the Hotels subject
to the  Pooling  Agreement  together  with  the  other  properties  whose  Gross
Revenues, Working Capital and Reserves are as of such date pooled with the Gross
Revenues,  Working  Capital  and  Reserves  of  the  Hotels  under  the  Pooling
Agreement.

         "Prime Rate" shall mean the "base rate" of interest announced from time
to time by Bankers Trust Company, New York, New York.

         "Priority  Management  Fee" shall mean, for each Hotel, an amount equal
to all Marriott  Guaranty Advances made with respect to such Hotel and for which
a corresponding Priority Management Fee has not previously been paid to Manager.

         "Proprietary  Information"  shall mean (a) all  computer  software  and
accompanying   documentation  (including  all  future  upgrades,   enhancements,
additions,   substitutions  and  modifications  thereof),  other  than  computer
software which is commercially available, which are used by Tenant or Manager in
connection with the

                                      -79-
<PAGE>

property  management  system,  the reservation  system and all future electronic
systems  developed  by Tenant or Manager for use in any Hotel,  (b) all manuals,
brochures and  directives  used by Tenant or Manager at any Hotel  regarding the
procedures and  techniques to be used in operating any such Hotel,  (c) customer
lists,  and (d) employee  records  which must remain  confidential  either under
Legal Requirements or under reasonable  corporate policies of Tenant or Manager;
provided,   however,  that  "Proprietary  Information"  shall  not  include  any
software,  manuals, brochures or directives issued by Marriott, as Franchisor to
Tenant, as franchisee, under the Franchise Agreement.

         "Prorated  Portion"  shall have the  meaning  ascribed  to such term in
Section 4.01.A hereof.

         "Prospectus"  shall have the  meaning  ascribed to such term in Section
11.09.B hereof.

         "Purchase  and  Sale  Agreement"  shall  mean  the  Purchase  and  Sale
Agreement identified on the Addendum hereto.

         "Qualifying  Mortgage" shall have the meaning  ascribed to such term in
the Owner Agreement.

         "Renewal Term(s)" shall have the meaning ascribed to it in Section 2.01
hereof.

         "Rent"  shall mean,  for any  period,  for each  Hotel,  Minimum  Rent,
Additional Rent and Special  Additional Rent allocated to such Hotel and accrued
under the  Lease for such  Hotel  for such  period,  provided  the same does not
exceed, in each instance,  the corresponding amounts of Tenant's First Priority,
Tenant's  Second  Priority and Tenant's Third Priority with respect to each such
Hotel.

         "Replacement  Cost"  shall have the  meaning  ascribed  to such term in
Section 6.01.C hereof.

         "Reserve"  shall  have the  meaning  ascribed  to such term in  Section
5.03.B hereof.

         "Reserve  Estimate"  shall have the  meaning  ascribed  to such term in
Section 5.04.A hereof.

         "Restricted  Trade  Area"  shall  have the  meaning  ascribed  to it in
Section 11.21 hereof.

         "Sale of a Hotel"  shall mean any sale,  assignment,  transfer or other
disposition,  for value or otherwise,  voluntary or involuntary, of the Tenant's
leasehold title to a Hotel and related property. For purposes of this Agreement,
a  Sale  of a  Hotel  shall  also  include  a  lease  (or  sublease)  of  all or
substantially  all of  Tenant's  leasehold  interest  in a Hotel  and any  sale,
assignment,  transfer or other disposition, for value or otherwise, voluntary or
involuntary,  in a  single  transaction  or a  series  of  transactions,  of the
Controlling  Interest

                                      -80-
<PAGE>

in Tenant,  but shall not include any  conveyance  other than a conveyance  of a
Controlling Interest in Tenant, Landlord or the immediate Parent of Tenant.

         "Second  Incentive  Management Fee" shall mean for each Hotel an amount
that is equal to fifty percent (50%) of Operating  Profit After First  Incentive
Management Fee for such Hotel in any Fiscal Year (or portion thereof).

         "Section  11.08 Costs" shall have the meaning  ascribed to such term in
Section 11.08.C hereof.

         "Site" shall have the meaning ascribed to that term in Section A of the
Recitals.

         "State"  means,  with  respect to each  Hotel,  the state in which such
Hotel is located.

         "Subsidiary"  shall mean, with respect to any Person, any entity (a) in
which such Person owns directly,  or  indirectly,  greater than fifty percent of
the voting or  beneficial  interest or (b) which such Person  otherwise  has the
right or power to control (whether by contract,  through ownership or securities
or otherwise).

         "Sum Due  Marriott"  shall have the  meaning  ascribed  to that term in
Section 3.02.B.5 hereof.

         "Sum Due  Tenant"  shall  have the  meaning  ascribed  to that  term in
Section 3.02.B.5 hereof.

         "System" shall mean all hotels which are operated under the Trade Names
listed on the Addenda.

         "System Fee" shall mean, with respect to each Hotel,  during any Fiscal
Year, an amount equal to five and one-half (5.5%) percent of Gross Room Revenues
of such Hotel.

         "System  Services"  shall  have the  meaning  ascribed  to that term in
Section 1.03.

         "System  Standards" shall mean either (or both as the context requires)
of the following two categories of standards: (i) the operational standards (for
example,   services   offered  to  guests,   cleanliness,   staffing,   employee
compensation and benefits, Chain Services,  frequent traveler programs and other
similar programs,  etc.); and (ii) the physical standards (for example,  quality
of  the  Improvements,  FF&E,  and  Fixed  Asset  Supplies,  frequency  of  FF&E
replacements,  etc.);  each of such  standards  shall be the  standard  which is
generally  prevailing or in the process of being  implemented at other hotels in
the  System,  on a fair and  consistent  basis with other  hotels in the System,
including all services and facilities in connection therewith that are customary
and usual at comparable  hotels in the System;  provided,  however,  that if the
market  area  or the

                                      -81-
<PAGE>

physical  peculiarities  of the Hotels  warrant,  in the reasonable  judgment of
Manager, a deviation from such standards shall be permitted.

         "Tenant"  shall have the meaning  ascribed to that term in the Preamble
or shall mean any successor or permitted assignee, as applicable.

         "Tenant  Advances"  shall have the  meaning  ascribed  to it in Section
3.02.B.5 hereof.

         "Tenant Default" shall have the meaning ascribed to it in Section 9.06.

         "Tenant  Event of  Default"  shall have the  meaning  ascribed to it in
Section 9.06.

         "Tenant  Operating  Loss Advances"  shall have the meaning  ascribed to
that term in Section 4.01.E hereof.

         "Tenant  Reserve  Advance"  means an  advance by Tenant  under  Section
5.07.F hereof.

         "Tenant's  First  Priority"  shall mean, for each Hotel,  for each full
Fiscal Year, an amount equal to the amount set forth on the applicable  Addenda,
or a pro rata portion  thereof in any partial  Fiscal Year;  provided,  however,
effective  on the date of each  disbursement  by  Landlord  pursuant  to Section
5.1.3(b),  10.2 or 11.2 of the Lease for such  Hotel or by  Tenant  pursuant  to
Section 5.07 hereof with respect to such Hotel,  in each instance at the request
of or with the approval of Landlord,  the Tenant's First  Priority  payable with
respect to each Accounting Period for such Hotel shall be increased by an amount
equal to the  quotient  obtained  by  dividing  (a) the  greater  of (i) ten and
four-tenths  percent  (10.4%),  and  (ii)  a  per  annum  amount  equal  to  the
Disbursement Rate determined as of the date of Manager's notice  identifying the
amount of and  requirement  for the applicable  funds(or the dates on which such
sums are advanced if no such notice is given), times the amount so disbursed, by
(ii)  thirteen  (13).  If any such  disbursement  is made during any  Accounting
Period on a day other than the first day of an Accounting  Period,  the Tenant's
First  Priority  payable  for such  Hotel on the  first  day of the  immediately
following  Accounting  Period (after having been so increased)  shall be further
increased (but only for such instant  Accounting  Period) by the amount by which
Tenant's First  Priority for the preceding  Accounting  Period,  as adjusted for
disbursement on a per diem basis, exceeded the amount of Tenant's First Priority
actually paid to Tenant for such preceding Accounting Period.

         "Tenant's First Priority Coverage Ratio" shall mean with respect to the
Portfolio  Properties  (or any of the Hotel if such  Hotels are not subject to a
Pooling Agreement),  for any period, the quotient of (i) the Aggregate Operating
Profit for all of the Portfolio  Properties (or the Operating  Profit for any of
the Hotels if such  Hotel is not  subject to a Pooling  Agreement)  during  such
period,  divided by (ii) the Aggregate  Tenant's  First  Priority for all of the
Portfolio  Properties  (or the Tenant's  First Priority for any of the Hotels if
such Hotel is not subject to a Pooling Agreement) during such period.

                                      -82-
<PAGE>

         "Tenant's First Priority Deficiency" shall have the meaning ascribed to
such term in Section 3.02.C hereof.

         "Tenant's Personal Property" shall mean all motor vehicles,  consumable
inventories and supplies, furniture,  furnishings, movable walls and partitions,
equipment and machinery and all other tangible  personal  property of Tenant, if
any,  acquired  by Tenant on and after the date hereof and located at a Hotel or
used in  Tenant's  business  at a Hotel,  and all  modifications,  replacements,
alterations and additions to such personal property.

         "Tenant's  Second Priority" shall mean, for each Hotel, an amount equal
to seven percent (7%) of Excess Gross Revenues for such Hotel.

         "Tenant's  Third  Priority"  shall  mean,  for each Hotel  acquired  by
Landlord prior to the date hereof, an amount equal to Zero Dollars ($0.00),  and
for each Hotel  acquired by Landlord on or after the date hereof,  for each full
Fiscal Year, the amount set forth on the applicable  Addendum for such Hotel, or
a pro rata portion thereof in any partial Fiscal Year.

         "Tenant Working Capital Advances" shall mean the aggregate of all funds
remitted by Tenant to Manager in order to fund additional  Working Capital under
Section  4.05  hereof,  or  pursuant  to the  Pooling  Agreement  to the  extent
allocable to the Hotels.

         "Term"  shall have the meaning  ascribed  to that term in Section  2.01
hereof.

         "Termination" shall mean, with respect to each Hotel, the expiration or
sooner cessation of the Term with respect to such Hotel.

         "Trade  Names" shall have the meaning  ascribed to it in Section  11.21
hereof.

         "Trade  Area  Restriction   Expiration  Date"  shall  mean  Trade  Area
Restriction Expiration Date set forth on each Addenda.

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

         "Unsuitable for Its Permitted Use" shall mean, with respect to a Hotel,
a state or  condition  of such  Hotel  such  that (a)  following  any  damage or
destruction  involving  such  Hotel,  such Hotel  cannot be operated in the good
faith  judgment  of Manager on a  commercially  practicable  basis and it cannot
reasonably  be expected to be restored to  substantially  the same  condition as
existed  immediately before such damage or destruction and otherwise as required
under Section 6.02.D.  hereof,  within nine (9) months  following such damage or
destruction  or such shorter  period of time as to which  business  interruption
insurance  is  available  to cover  Rent and other  costs  related  to the Hotel
following such damage or  destruction,  or (b) as the result of a partial taking
by

                                      -83-
<PAGE>

Condemnation,  such Hotel  cannot be  operated,  in the good faith  judgment  of
Manager  on  a  commercially   practicable  basis  in  light  of  then  existing
circumstances.

         "Work" shall have the meaning  ascribed to that term in Section  6.02.D
hereof.

         "Working  Capital" shall mean,  with respect to each Hotel,  funds that
are used in the day-to-day  operation of the business of such Hotel,  including,
without  limitation,  amounts sufficient for the maintenance of change and petty
cash funds, amounts deposited, in operating bank accounts, receivables,  amounts
deposited in payroll  accounts,  prepaid expenses and funds required to maintain
Inventories, less accounts payable and accrued current liabilities.

                        [SIGNATURES FOLLOW ON NEXT PAGE]

                                      -84-
<PAGE>

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

                                          TENANT:

WITNESS:                                  HPT TRS MI-135, INC., a
                                          Delaware corporation

                                          By:
-----------------------------------          --------------------------------
Print Name:________________________       Print Name:  John G. Murray
                                          Title:       Vice President

                                          MANAGER:

                                          COURTYARD MANAGEMENT
WITNESS:                                  CORPORATION, a Delaware corporation

                                          By:
-----------------------------------          --------------------------------
Print Name:______________________         Print Name:  Timothy J. Grisius
                                          Title:       Vice President

                                      -85-
<PAGE>

                                    EXHIBIT A

                                    THE SITES

<PAGE>

                                    EXHIBIT B

                                   TRADE AREA

The Restricted  Trade Area for each Hotel is the area within a five-mile  radius
of such  Hotel.  If there  exists any  conflicts  between the  narrative  of the
Restricted Trade Area and any attached map, the narrative shall control.

<PAGE>

                                    EXHIBIT C

                                 EXISTING LEASES<Page>

                                                                    EXHIBIT 10.3

                                POOLING AGREEMENT

         THIS POOLING AGREEMENT (this "Agreement") is made as of the 15th day of
June,  2001 (the  "Effective  Date"),  by and among (i) Marriott  International,
Inc.,  a Delaware  corporation  (hereinafter  referred to as  "Marriott"),  (ii)
Marriott  Hotel  Services,  Inc.,  a  Delaware  corporation,  Residence  Inn  By
Marriott,  Inc., a Delaware  corporation,  Courtyard Management  Corporation,  a
Delaware corporation,  SpringHill SMC Corporation,  a Delaware corporation,  and
Towneplace Management Corporation, a Delaware corporation (the entities named in
this clause  (ii) each  sometimes  hereinafter  referred  to  individually  as a
"Manager" and collectively as the "Managers"), and (iii) HPT TRS MI-135, INC., a
Delaware corporation (hereinafter referred to as "Tenant").

                                    RECITALS:

         A. Certain of the Managers  (as  sellers)  and  Hospitality  Properties
Trust,  a Maryland  real estate  investment  trust (as  purchaser)  (hereinafter
referred to as "HPT"),  are parties to that certain  Purchase and Sale Agreement
dated of even date herewith  (the  "Limited  Service  Purchase  Contract")  with
respect  to the three (3)  hotels  listed on  Exhibit A  attached  hereto as the
properties to be purchased (the "Additional Limited Service Properties").

         B. Marriott Kauai, Inc., a Delaware corporation (as seller) and HPT (as
purchaser),  are parties to that certain  Purchase and Sale  Agreement  dated of
even  date  herewith  (the  "Kauai  Purchase  Contract")  with  respect  to  the
Marriott's Kauai Resort and Beach Club (the "Kauai Hotel"). (The Limited Service
Purchase  Contract and the Kauai  Purchase  Contract are referred to hereinafter
collectively  as the "Purchase  Contracts,"  and the Additional  Limited Service
Properties and the Kauai Hotel are referred to hereinafter  collectively  as the
"Additional Properties.")

         C. Pursuant to certain  Assignment and Assumption  Agreements  dated of
even date  herewith,  HPT has  assigned  its rights  under the  Limited  Service
Purchase  Contract to HPTMI Properties  Trust, a Maryland real estate investment
trust, with respect to the Additional Limited Service  Properties,  and to HPTMI
Hawaii, Inc., a Delaware corporation  (collectively,  "Landlord"),  and Landlord
has assumed the obligations of HPT thereunder.  Landlord is also, as of the date
hereof, the owner,  directly or indirectly,  of certain other hotels operated by
Marriott and/or its Affiliates and which are listed on Exhibit B attached hereto
(the "Initial Properties").

         D. HPT,  Landlord,  Tenant and  Marriott  are  parties to that  certain
Agreement to Assign,  Release,  Franchise and Manage dated of even date herewith
(the  "Agreement to Lease") with respect to the  Additional  Properties  and the
Initial  Properties  (each  of  the  four  (4)  Additional  Properties  and  the
thirty-one   (31)  Initial   Properties  a  "Property"  and   collectively   the
"Properties").
<PAGE>

         E. From and after the date that  each  Property  is made  subject  to a
Lease and a  Management  Agreement  pursuant  to the  Agreement  to Lease,  such
Property  shall  constitute a "Portfolio  Property"  and all of such  Properties
shall  collectively  constitute  the "Portfolio  Properties."  Any Property with
respect to which a Manager  Deconsolidation Event, a Kauai Deconsolidation Event
or a Tenant  Deconsolidation  Event has occurred  shall  thereafter no longer be
considered a Portfolio Property.

         F.  Simultaneously  with the execution  and delivery of this  Agreement
Marriott and Tenant entered into a guaranty agreement (the "Guaranty Agreement")
pursuant  to which,  inter  alia,  Marriott  has agreed to  guarantee  to Tenant
(subject to the terms, conditions and limitations set forth therein) that Tenant
will  receive  timely  payment of Tenant's  First  Priority  with respect to the
Portfolio Properties in certain events.

         G. Pursuant to the Agreement to Lease,  Tenant has entered into or will
enter into (i) a management  agreement with each applicable Manager with respect
to each Portfolio  Property (each a "Management  Agreement" and collectively the
"Management  Agreements"),  and (ii) a franchise  agreement  with  Marriott with
respect to each Portfolio  Property except with respect to the Kauai Hotel (each
a "Franchise Agreement" and collectively the "Franchise Agreements").

         H. Pursuant to the Agreement to Lease it is contemplated  that, as each
Lease of an Initial Property is assigned to Tenant,  the applicable Manager will
enter into a Management  Agreement  for such  Property (or  confirmation  of the
applicability of a Management  Agreement to such Property,  as applicable),  and
Tenant and Marriott will enter into a Franchise Agreement for such Property,  at
which time such Property  will be considered a Portfolio  Property in accordance
with the provisions hereof.

         I. The parties desire that (i) the revenues generated by the operations
of the Portfolio  Properties be pooled for purposes of paying operating expenses
of the  Portfolio  Properties,  fees and  other  amounts  due to  Marriott,  the
Managers  and Tenant,  and  distributions  to various  other  persons,  and (ii)
working capital and reserves of the Portfolio  Properties be managed on a pooled
basis, all as hereinafter provided.

         NOW,  THEREFORE,  in  consideration of the foregoing and other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged,  Marriott,  each Manager,  and Tenant hereby covenant and agree as
follows:

                                    ARTICLE I
                                  DEFINED TERMS

         1.01 Definitions.

         The following  capitalized  terms as used in this Agreement  shall have
the meanings set forth below:

                                      -2-
<PAGE>

         "Accounting  Period"  shall  have  the  meaning,  with  respect  to any
Portfolio  Property,  given  such  term in the  Management  Agreement  for  such
Portfolio Property.

         "Actual  Tenant  Distribution"  shall  have the  meaning  set  forth in
Section 7.01.C.

         "Additional  Limited  Service  Properties"  shall have the  meaning set
forth in the Recitals.

         "Additional  Manager Advances" shall mean advances made by the Managers
and as so defined in each Management Agreement.

         "Additional Marriott Advances" shall mean all advances made by Marriott
pursuant  to  Sections  3.03,  4.03 (to the extent  described  therein as deemed
Additional Marriott Advances) and 5.01.B of this Agreement.

         "Additional  Properties"  shall  have  the  meaning  set  forth  in the
Recitals.

         "Advance Notice" shall have the meaning set forth in Section 4.03.B.

         "Affiliate"  shall  have  the  meaning  set  forth  in  the  Management
Agreements.

         "Agreement" shall have the meaning set forth in the Preamble.

         "Agreement to Lease" shall have the meaning set forth in the Recitals.

         "Aggregate Base  Management Fee" shall mean, for any given period,  the
sum of the Base Management Fees for the Portfolio Properties for such period.

         "Aggregate  Deductions"  shall mean,  for any given period,  the sum of
Deductions for the Portfolio Properties for such period.

         "Aggregate  First  Incentive  Management Fee" shall mean, for any given
period,  the sum of the  First  Incentive  Management  Fees  for  the  Portfolio
Properties for such period.

         "Aggregate Gross Revenues" shall mean, for any given period, the sum of
Gross Revenues for the Portfolio Properties for such period.

         "Aggregate Operating Loss" shall mean, for any given period, a negative
Aggregate Operating Profit for such period.

         "Aggregate  Operating  Profit"  shall mean,  for any given  period,  an
amount equal to Aggregate  Gross  Revenues less  Aggregate  Deductions  for such
period.

                                      -3-
<PAGE>

         "Aggregate  Operating Profit After Aggregate First Incentive Management
Fee" shall mean, for any period,  Aggregate Operating Profit remaining after the
distribution provided for in items (1) through (8) of Section 2.02.A hereof.

         "Aggregate  Priority  Management Fee" shall mean, for any given period,
the sum of the Priority  Management  Fees for the Portfolio  Properties for such
period.

         "Aggregate  Second Incentive  Management Fee" shall mean an amount that
is equal to fifty percent (50%) of Aggregate  Operating  Profit After  Aggregate
First  Incentive  Management  Fee in  any  Portfolio  Fiscal  Year  (or  portion
thereof).

         "Aggregate  System Fee" shall,  during any given Portfolio  Fiscal Year
(or portion  thereof),  be equal to the sum of the System Fees for the Portfolio
Properties for such period.

         "Aggregate  Tenant's First  Priority" shall mean, for any given period,
the sum of the Tenant's  First  Priority for the Portfolio  Properties  for such
period.

         "Aggregate  Tenant's First Priority  Deficiency" shall have the meaning
set forth in Section 2.02.B.

         "Aggregate  Tenant's Second Priority" shall mean, for any given period,
the sum of the Tenant's  Second  Priority for the Portfolio  Properties for such
period.

         "Aggregate  Tenant's Third  Priority" shall mean, for any given period,
the sum of the Tenant's  Third  Priority for the Portfolio  Properties  for such
period.

         "Allocation  Formula"  shall  have the  meaning  set  forth in  Section
6.02.C.

         "Available  Funds"  shall  have the  meaning  set  forth in item (5) of
Section 2.02.A.

         "Base Management Fee" shall have the meaning, for each Property,  given
such term in the Management Agreement for such Property.

         "Business Day" shall have the meaning given such term in the Management
Agreements.

         "Closing" shall have the meaning,  with respect to any Property,  given
such term in the Purchase Contract applicable to such Property.

         "Consolidated  Financials"  shall  mean,  for any fiscal  year or other
accounting period of Marriott,  annual audited and quarterly unaudited financial
statements of Marriott prepared on a consolidated  basis,  including  Marriott's
consolidated  balance sheet and the related statements of income and cash flows,
all in  reasonable  detail,  and  setting  forth  in  comparative  form  for the
corresponding figures for the corresponding figures for

                                      -4-
<PAGE>

the  corresponding  period  in  the  preceding  fiscal  year,  and  prepared  in
accordance with GAAP throughout the periods reflected.

         "Deconsolidation  Event"  shall have the  meaning  set forth in Section
6.02.A.

         "Deductions" shall have the meaning, for each Property, given such term
in the Management Agreement for such Property.

         "Deficiency  Owed  Tenant"  shall have the meaning set forth in Section
7.01.C.

         "Domestic   Hotels"  shall  mean  each  of  the  Portfolio   Properties
excluding, in any event, the Kauai Hotel.

         "Effective Date" shall have the meaning set forth in the Preamble.

         "Existing  Lease  Payments" shall have the meaning set forth in Section
7.01.A.

         "First  Incentive  Management  Fee"  shall have the  meaning,  for each
Property, given such term in the Management Agreement for such Property.

         "Fiscal  Year" shall have the meaning,  with  respect to any  Portfolio
Property,  given  such  term in the  Management  Agreement  for  such  Portfolio
Property.

         "Franchise  Agreement"  and  "Franchise   Agreements"  shall  have  the
meanings  set  forth in the  Recitals  and  shall  include  only  the  Franchise
Agreements for the Portfolio Properties.

         "GAAP" shall mean generally accepted accounting principles consistently
applied.

         "Gross Revenues" shall have the meaning, for each Property,  given such
term in the Management Agreement for such Property.

         "Guaranty Agreement" shall have the meaning set forth in the Recitals.

         "Guaranty  Term" shall have the meaning given such term in the Guaranty
Agreement.

         "Guaranty  Termination  Event"  shall  have the  meaning  set  forth in
Section 4.03.

         "Holdback  Agreement"  shall mean the  Holdback  Agreement of even date
herewith between, inter alia, Marriott and Tenant.

         "Holdback  Agreement Advances" shall mean advances which Tenant elects,
in its discretion, to make, pursuant to the terms of the Holdback Agreement.

                                      -5-
<PAGE>

         "HPT" shall have the meaning set forth in the Recitals.

         "Hypothetical  Report"  shall  have the  meaning  set forth in  Section
7.01.A.

         "Hypothetical  Tenant Distribution" shall have the meaning set forth in
Section 7.01.B.

         "Initial Properties" shall have the meaning set forth in the Recitals.

         "Kauai  Deconsolidation  Event"  shall  have the  meaning  set forth in
Section 6.03.

         "Kauai Hotel" shall have the meaning set forth in the Recitals.

         "Kauai Owner" shall mean HPTMI Hawaii, Inc., a Delaware corporation.

         "Kauai  Purchase  Contract"  shall  have the  meaning  set forth in the
Recitals.

         "Landlord" shall have the meaning set forth in the Recitals.

         "Landlord  Deconsolidation  Event"  shall have the meaning set forth in
Section 6.02.A.

         "Leases" shall have the meaning set forth in the Management Agreements.

         "Limited Service Purchase Contract" shall have the meaning set forth in
the Recitals.

         "Management  Agreement"  and  "Management  Agreements"  shall  have the
meanings  set  forth in the  Recitals  but  shall  include  only the  Management
Agreements for the Portfolio Properties.

         "Manager"  and  "Managers"  shall  have the  meaning  set  forth in the
Preamble.

         "Manager  Deconsolidation  Event"  shall have the  meaning set forth in
Section 6.02.A.

         "Manager Reserve Advances" shall mean advances made by the Managers and
as so defined in each Management Agreement.

         "Marriott" shall have the meaning set forth in the Preamble.

         "Marriott Guaranty Advance" shall have the meaning set forth in Section
4.03.

         "Modification" shall have the meaning set forth in Section 8.04.

                                      -6-
<PAGE>

         "Owner  Agreements"  shall  mean,  collectively,  the Owner  Agreements
applicable to the Portfolio  Properties and Franchise Agreements related thereto
among the Landlord, Marriott, the applicable Manager, and Tenant.

         "Pooled Reserve" shall have the meaning set forth in Section 5.02.

         "Pooled  Working  Capital"  shall have the meaning set forth in Section
5.01.

         "Portfolio  Accounting  Period" shall mean, for any period during which
the Kauai Hotel is a Portfolio  Property,  a period  comprised of one Accounting
Period with respect to the Domestic  Hotels,  and either zero or one  Accounting
Period  with  respect  to the Kauai  Hotel,  all as more  fully set forth on the
schedule  attached  hereto as Exhibit C. For any period  during  which the Kauai
Hotel is not a Portfolio  Property,  Portfolio  Accounting Period shall have the
same  meaning  as the  definition  of  "Accounting  Period"  as set forth in the
Management Agreements applicable to the Domestic Hotels. Marriott shall have the
right to make changes to the  Portfolio  Accounting  Periods in the future,  and
appropriate  adjustments to this Agreement's reporting and accounting procedures
shall be made; provided, however, that no such change or adjustment shall in any
way reduce or in any material respect delay the distribution of Operating Profit
or other payments due hereunder.

         "Portfolio  Fiscal  Year" shall mean,  for any period  during which the
Kauai Hotel is a Portfolio  Property,  the thirteen (13) full Accounting Periods
of a Fiscal Year with  respect to the  Domestic  Hotels and the twelve (12) full
Accounting Periods of the most closely corresponding Fiscal Year with respect to
the Kauai Hotel. A partial  Portfolio Fiscal Year between the Effective Date and
the first full  Portfolio  Fiscal  Year shall  constitute  a separate  Portfolio
Fiscal Year. A partial  Portfolio  Fiscal Year following the last full Portfolio
Fiscal Year shall  constitute a separate  Portfolio  Fiscal Year. For any period
during which the Kauai Hotel is not a Portfolio Property,  Portfolio Fiscal Year
shall have the same meaning as the  definition  of "Fiscal Year" as set forth in
the Management Agreements applicable to the Domestic Hotels. Marriott shall have
the right to make  changes  to the  Portfolio  Fiscal  Year in the  future,  and
appropriate  adjustments to this Agreement's reporting and accounting procedures
shall be made; provided, however, that no such change or adjustment shall in any
way reduce or in any material respect delay the distribution of Operating Profit
or other payments due hereunder.

         "Portfolio Property" and "Portfolio Properties" shall have the meanings
set forth in the Recitals.

         "Priority  Management  Fee" shall have the meaning,  for each Property,
given such term in the Management Agreement for such Property.

         "Property"  and  "Properties"  shall have the meanings set forth in the
Recitals.

         "Prorated Portions" shall have the meaning set forth in Section 3.02.

                                      -7-
<PAGE>

         "Purchase Contracts" shall have the meaning set forth in the Recitals.

         "Reserve" shall have the meaning, for each Property, given such term in
the Management Agreement for such Property.

         "Second  Incentive  Management  Fee" shall have the  meaning,  for each
Property, given such term in the Management Agreement for such Property.

         "Sum Due  Marriott"  shall  have the  meaning  set forth in item (5) of
Section 2.02.A.

         "Sum Due  Tenant"  shall  have  the  meaning  set  forth in item (5) of
Section 2.02.A.

         "Surplus" shall have the meaning set forth in Section 7.01.C.

         "System Fee" shall have the meaning, for each Property, given such term
in the Management Agreement for such Property.

         "Tenant" shall have the meaning given such term in the Preamble.

         "Tenant  Advances"  shall  have the  meaning  set  forth in item (5) of
Section 2.02.A.

         "Tenant  Aggregate  Operating  Loss Advance" shall have the meaning set
forth in Section 3.03.

         "Tenant  Deconsolidation  Event"  shall have the  meaning  set forth in
Section 6.02.A.

         "Tenant Working  Capital  Advances" shall have the meaning set forth in
Section 5.01.B.

         "Tenant's First  Priority"  shall have the meaning,  for each Property,
given such term in the Management Agreement for such Property.

         "Tenant's Second  Priority" shall have the meaning,  for each Property,
given such term in the Management Agreement for such Property.

         "Tenant's Third  Priority"  shall have the meaning,  for each Property,
given such term in the Management Agreement for such Property.

         "Transaction  Documents"  shall have the  meaning  set forth in Section
7.01.

                                      -8-
<PAGE>

         "Working  Capital"  shall  have  the  meaning,  with  respect  to  each
Property, given such term in the Management Agreement for such Property.

                                   ARTICLE II
                    COMPENSATION OF MANAGERS; PRIORITIES FOR
                   DISTRIBUTION OF AGGREGATE OPERATING PROFIT

         2.01. System and Management Fees

         In lieu of the  System  Fee,  the  Priority  Management  Fee,  the Base
Management  Fee, the First  Incentive  Management  Fee and the Second  Incentive
Management Fee to be paid pursuant to Section 3.01 of each Management Agreement,
the Managers of the  Portfolio  Properties  and Tenant agree that such  Managers
shall be paid, collectively, the following management fees:

         A. The Aggregate System Fee; plus

         B. The Aggregate Priority Management Fee; plus

         C. The Aggregate Base Management Fee; plus

         D. The Aggregate First Incentive Management Fee; plus

         E. The Aggregate Second Incentive Management Fee.

The Aggregate Priority Management Fee, the Aggregate First Incentive  Management
Fee and the Aggregate Second  Incentive  Management Fee shall be allocated among
the  Managers as the Managers  shall  determine  in their sole  discretion,  and
Tenant shall have no  responsibility  or liability in  connection  with any such
allocation as determined by the Managers or the  distribution  thereof among the
Managers.  If in any  Portfolio  Fiscal Year the amount of  Aggregate  Operating
Profit is insufficient,  after distributions  higher in the priority of payments
set  forth in  Section  2.02.A,  to pay the full  amount of the  Aggregate  Base
Management Fee, the Aggregate  First  Incentive  Management Fee or the Aggregate
Second  Incentive  Management Fee due for such Portfolio Fiscal Year, the amount
paid shall be allocated  among the Managers as the Managers  shall  determine in
their sole discretion, and any portion of the Aggregate Base Management Fee, the
Aggregate  First  Incentive  Management  Fee or the Aggregate  Second  Incentive
Management Fee for such Portfolio Fiscal Year left unpaid shall be deemed waived
and shall not accrue or be payable in any subsequent Portfolio Fiscal Year.

         2.02     Priorities for Distribution of Aggregate Operating Profit

         A.  Aggregate  Operating  Profit  shall be  distributed,  to the extent
available,  in the following order of priority (which distributions  Marriott is
irrevocably authorized to pay):

                                      -9-
<PAGE>

              (1) First,  to Tenant,  in an amount equal to  Aggregate  Tenant's
First Priority.

              (2) Second,  to Tenant,  in an amount equal to Aggregate  Tenant's
Second Priority.

              (3) Third,  to Tenant,  in an amount equal to  Aggregate  Tenant's
Third Priority.

              (4) Fourth,  To Tenant,  in an amount  necessary to replenish  all
Holdback Agreement Advances.

              (5)  Fifth,  to (i)  Tenant in an amount  necessary  to  reimburse
Tenant for all Tenant Working Capital  Advances and Tenant  Aggregate  Operating
Loss Advances made by Tenant from time to time (collectively, "Tenant Advances")
which have not yet been repaid,  and (ii) to Marriott in an amount  necessary to
reimburse Marriott and/or any Affiliate for all Additional Marriott Advances and
all Additional  Manager  Advances made by Marriott or any Affiliate from time to
time which have not yet been repaid.  If at any time the amounts  available  for
distribution  to  Tenant  and  Marriott   pursuant  to  this  Section  2.02.A(5)
("Available  Funds")  are  insufficient  (a) to repay to Tenant all  outstanding
Tenant  Advances  (the  "Sum Due  Tenant"),  and (b) to repay  to  Marriott  all
outstanding  Additional  Marriott Advances and Additional  Manager Advances (the
"Sum Due Marriott"),  then (x) Tenant shall be paid from the Available Funds the
amount  obtained by  multiplying  a number equal to the amount of the  Available
Funds by a  fraction,  the  numerator  of which  is the Sum Due  Tenant  and the
denominator  of which is a number equal to the sum of the Sum Due Tenant and the
Sum Due Marriott,  and (y) Marriott  shall be paid from the Available  Funds the
amount  obtained by  multiplying  a number equal to the amount of the  Available
Funds by a fraction,  the  numerator  of which is the Sum Due  Marriott  and the
denominator  of which is a number equal to the sum of the Sum Due Tenant and the
Sum Due Marriott.

              (6)  Sixth,  to the  Manager in an amount  equal to the  Aggregate
Priority Management Fee.

              (7) Seventh,  to the Managers in an amount equal to the  Aggregate
Base Management Fee.

              (8) Eighth,  to the Managers,  in an amount equal to the Aggregate
First Incentive Management Fee (however,  in no event shall any amount be due or
payable by Marriott or any Manager  pursuant to this clause (8) in the event the
Aggregate First  Incentive  Management Fee is equal to or less than Zero Dollars
($0.00).

              (9) Ninth,  to the  Managers,  in an amount equal to the Aggregate
Second Incentive Management Fee.

              (10) Tenth, to Tenant, the balance, if any.

                                      -10-
<PAGE>

         B. For any Portfolio  Accounting  Period, if Tenant does not receive on
or before the first day of each Portfolio  Accounting Period Aggregate  Tenant's
First Priority for such  Portfolio  Accounting  Period (an  "Aggregate  Tenant's
First Priority Deficiency"), and further provided that if Marriott does not fund
such Aggregate  Tenant's First  Priority  Deficiency (as an Additional  Marriott
Advance  hereunder)  within ten (10) days of receiving  written  request for the
same from Tenant,  Tenant shall have the right to effect a  termination  of this
Agreement  and all (but not  less  than  all) of the  Management  Agreements  by
written  notice to  Marriott,  which  termination  shall be  effective as of the
effective  date which is set forth in said notice,  provided that said effective
date  shall be at least  thirty  (30) days after the date of such  notice.  Such
termination  (i) shall be in accordance  with the provisions of Section 11.11 of
each Management  Agreement,  (ii) shall  constitute a Manager Default under each
Management Agreement,  and (iii) shall entitle Tenant to all rights and remedies
available to it with  respect to Manager  Defaults as provided for in Article IX
of each Management Agreement.

                                   ARTICLE III
              ACCOUNTING; INTERIM DISTRIBUTIONS; ANNUAL ADJUSTMENTS

         3.01     Portfolio Accounting Periods; Statements; Distributions

         A.  The  Accounting  Periods  applicable  to the  Domestic  Hotels  are
different than the Accounting  Periods applicable to the Kauai Hotel in that the
Management  Agreements  applicable to the Domestic  Hotels  provide for thirteen
(13)  Accounting  Periods in each  Fiscal  Year,  and the  Management  Agreement
applicable  to the Kauai Hotel  provides for twelve (12)  Accounting  Periods in
each Fiscal  Year.  In order to allow all of the  Portfolio  Properties  to make
interim  accountings and  distributions on a pooled basis  notwithstanding  such
difference in Accounting Periods, all such interim accountings and distributions
with respect to such Portfolio  Properties shall be made only following and with
respect  to  each   Portfolio   Accounting   Period  as  provided   for  herein,
notwithstanding  any  provisions  to the  contrary  in  any  of  the  Management
Agreements.

         B.  Within  twenty  (20) days  after  the close of the last  Accounting
Period included within a Portfolio Accounting Period,  Marriott shall deliver an
interim  accounting  to  Tenant  showing  Aggregate  Gross  Revenues,  Aggregate
Deductions,  Aggregate  Operating  Profit,  and  application  and  distributions
thereof. Notwithstanding the order of distribution of Aggregate Operating Profit
set forth in Section  2.02.A,  for each Portfolio  Accounting  Period,  Marriott
shall,  with each such  accounting,  transfer to Tenant any interim  amounts due
Tenant hereunder,  transfer to the Managers any interim amounts due the Managers
(including,  without limitation, the Aggregate Base Management Fee calculated on
a  year-to-date  basis for such Portfolio  Fiscal Year),  and retain any interim
amounts due to Marriott under Section  2.02.A.  In addition,  each Manager shall
provide Tenant with interim  accountings  pursuant to the applicable  Management
Agreement on an  Accounting  Period basis for each  Portfolio  Property  that it
manages as if the applicable  Portfolio  Property were not a participant in this
Agreement.

                                      -11-
<PAGE>

If the  portion  of  Aggregate  Operating  Profit  to be  distributed  to Tenant
pursuant to Items 1, 2, 3, 4 or 5 of Section 2.02.A is  insufficient to pay each
of such interim  amounts  then due in full  following  the end of any  Portfolio
Accounting  Period,  any such interim amounts left unpaid shall be paid from and
to the extent of  Aggregate  Operating  Profit  available  therefor  at the time
distributions are made following  successive  Portfolio Accounting Periods until
such interim amounts are paid in full, and such payments shall be made from such
Aggregate  Operating Profit in the same order of priority as other payments made
on account of such item in such following  Portfolio  Accounting Periods. If the
portion of  Aggregate  Operating  Profit to be  distributed  to  Marriott or the
Managers  pursuant to Items 5, 6 or 7 of Section 2.02.A is  insufficient  to pay
each of such interim amounts then due in full following the end of any Portfolio
Accounting  Period,  any such interim amounts left unpaid shall be paid from and
to the extent of  Aggregate  Operating  Profit  available  therefor  at the time
distributions are made following  successive  Portfolio Accounting Periods until
such interim amounts are paid in full, and such payments shall be made from such
Aggregate  Operating Profit in the same order of priority as other payments made
on  account  of such  item  in  such  following  Portfolio  Accounting  Periods.
Notwithstanding  the foregoing  sentence,  if, in any Portfolio Fiscal Year, the
Aggregate Base Management  Fee, the Aggregate First Incentive  Management Fee or
the  Aggregate  Second  Incentive  Management  Fee is not payable  under Section
2.02.A hereof,  the Managers shall not be entitled to the payment of the portion
of the Aggregate Base Management  Fee, the Aggregate First Incentive  Management
Fee or the Aggregate Second  Incentive  Management Fee not payable under Section
2.02.A  hereof,  and in no event shall  Tenant be liable for the payment of such
portion of the Aggregate  Base  Management  Fee, the Aggregate  First  Incentive
Management Fee or the Aggregate Second Incentive  Management Fee. The portion of
Aggregate  Operating  Profit to be distributed to Tenant for Aggregate  Tenant's
First  Priority  and  Aggregate  Tenant's  Third  Priority  for the then current
Portfolio  Fiscal Year, as well as the portion of Aggregate  Operating Profit to
be  distributed  to the  Managers as their  interim  Aggregate  First  Incentive
Management  Fee and  Second  Incentive  Management  Fee shall be  determined  by
applying a cumulative prorated amount to such Aggregate Tenant's First Priority,
Aggregate Tenant's Third Priority,  Aggregate First Incentive Management Fee and
Aggregate Second Incentive  Management Fee (calculated on a year-to-date  basis,
with the  prorated  amount being  one-thirteenth  (1/13) of the total amount for
each of such items with respect to each of the Domestic Hotels,  and one-twelfth
(1/12) of the total  amount  for each of such  items  with  respect to the Kauai
Hotel,  for each Portfolio  Accounting  Period of each Portfolio Fiscal Year) to
the year-to-date  cumulative Aggregate Operating Profit (all such portions being
hereinafter collectively referred to as the "Prorated Portions"). In each of the
second through thirteenth Portfolio Accounting Periods,  inclusive, the Prorated
Portions shall be adjusted to reflect distributions, in each instance, to Tenant
and the Managers and  retention by Marriott of Aggregate  Operating  Profit with
respect to such Prorated Portions for prior Portfolio  Accounting Periods during
the then current Portfolio Fiscal Year. All  distributions  shall be made in the
order of priority as set forth in Section 2.02.A.

                                      -12-
<PAGE>

         3.02     Annual Accounting Statements and Cash Adjustments

         A. The Fiscal Years  applicable  to the Domestic  Hotels are  different
than the  Fiscal  Years  applicable  to the Kauai  Hotel in that the  Management
Agreements  applicable  to  the  Domestic  Hotels  provide  for  a  Fiscal  Year
consisting of thirteen (13)  Accounting  Periods,  and the Management  Agreement
applicable  to the Kauai Hotel  provides for a Fiscal Year  consisting of twelve
(12)  Accounting  Periods,  and  the  beginning  and  end of  each  Fiscal  Year
applicable to the Domestic Hotels and the  corresponding  Fiscal Year applicable
to the Kauai Hotel will, in most instances, begin and end on different dates. In
order to allow all of the Portfolio  Properties to make annual  accountings  and
distributions on a pooled basis notwithstanding such difference in Fiscal Years,
all such annual  accountings  and  distributions  with respect to such Portfolio
Properties  shall be made only  following  and with  respect  to each  Portfolio
Fiscal  Year as provided  for  herein,  notwithstanding  any  provisions  to the
contrary in any of the Management  Agreements.  Calculations and payments of the
Aggregate Base Management Fee, the Aggregate First Incentive Management Fee, the
Aggregate Second  Incentive  Management Fee,  Tenant's First Priority,  Tenant's
Second  Priority,   Tenant's  Third  Priority  and  distributions  of  Aggregate
Operating Profit made with respect to each Portfolio  Accounting Period within a
Portfolio  Fiscal Year shall be accounted  for  cumulatively.  Within sixty (60)
days after the end of each  Portfolio  Fiscal Year,  Marriott  shall  deliver to
Tenant a statement  in  reasonable  detail  summarizing  the  operations  of the
Portfolio  Properties for the immediately  preceding Portfolio Fiscal Year and a
certificate of an officer of Marriott certifying that such year-end statement is
true and  correct.  Marriott,  the Managers  and Tenant  shall,  within ten (10)
Business Days after Tenant's receipt of such statement, make any adjustments, by
cash payment,  in the amounts paid or retained for such Portfolio Fiscal Year as
are needed because of the final figures set forth in such statement.  Such final
accounting  shall be  controlling  over the interim  accountings.  No adjustment
shall be made for any Aggregate  Operating Loss or Aggregate Operating Profit in
a preceding or subsequent  Portfolio Fiscal Year, subject to the audit rights of
Tenant as set forth in each  Management  Agreement.  Each Manager  shall provide
Tenant with interim and annual statements pursuant to the applicable  Management
Agreement  for each  Portfolio  Property  that it manages  as if the  applicable
Portfolio Property were not a participant in this Agreement.

         B. In addition,  on or before April 30 of each Fiscal Year,  commencing
on the April 30 following the date hereof,  Marriott shall deliver to Tenant and
Landlord an Officer's  Certificate  setting forth the totals of Aggregate  Gross
Revenue,  Aggregate  Deductions,  the  calculation of Aggregate  Tenant's Second
Priority and Aggregate Operating Profit After First Incentive Management Fee for
the Hotels with respect to which this  Agreement was in effect for the preceding
Portfolio  Fiscal  Year,  together  with an audit  thereof  conducted  by Arthur
Andersen  LLP, or another  so-called  "Big Five" firm of  independent  certified
public  accountants  proposed  by Manager and  approved by Tenant and  Landlord,
which approval shall not be unreasonably  withheld or delayed.  The cost of such
audit shall be an Aggregate Deduction hereunder.

                                      -13-
<PAGE>

         3.03     Aggregate Operating Loss

         To the extent there is an Aggregate  Operating  Loss for any  Portfolio
Accounting  Period,  Tenant shall have the right,  without any obligation and in
its sole and  absolute  discretion,  to  advance  funds  required  to fund  such
Aggregate  Operating  Loss within twenty (20) days after  Marriott has delivered
written  notice  thereof to Tenant.  Any Aggregate  Operating  Loss so funded by
Tenant shall  constitute a "Tenant  Aggregate  Operating Loss  Advance."  Tenant
Operating  Loss Advance  shall be repaid in  accordance  with Section  2.02.A(5)
hereof. If Tenant does not funds such Aggregate  Operating Loss,  Marriott shall
also have the right,  within twenty (20) days after such initial twenty (20) day
period,  without any  obligation  and in its sole and  absolute  discretion,  to
advance  funds  required to fund such  Aggregate  Operating  Loss,  and any such
advance shall constitute an Additional  Marriott  Advance.  Additional  Marriott
Advances shall be repaid in accordance with Section 2.02.A(5).  If neither party
elects to fund such Aggregate Operating Loss as provided for herein, the parties
will have the rights set forth in Section  4.01.E of each  Management  Agreement
for such Portfolio  Properties  (which right may be exercised as to all, but not
less than all, of such Portfolio Properties).

                                   ARTICLE IV
                             ACCOUNTS; EXPENDITURES

         4.01     Accounts

         All funds derived from operation of the Portfolio  Properties  shall be
deposited in one or more bank accounts  designated by Marriott,  which  accounts
may be  commingled  accounts  containing  other  funds  owned by or  managed  by
Marriott. The Pooled Reserve shall be held in an interest bearing escrow reserve
account in a bank or similar  institution  designated by Manager and  reasonably
acceptable to Tenant and Landlord, and the Pooled Reserve shall not be comingled
with any other funds.  Withdrawals  from said  accounts  shall be made solely by
representatives  of Marriott whose signatures have been  authorized.  Reasonable
petty cash funds shall be maintained at the Portfolio Properties.

         4.02 Expenditures and Payments

         A.  Marriott,  on  behalf  of and in  coordination  with  the  Managers
pursuant  to their  obligations  under the  Management  Agreements,  and in each
instance subject to the provisions of this Agreement,  shall make  expenditures,
to the extent of the  sufficiency of funds available  therefor  pursuant to this
Agreement, for all Aggregate Deductions,  and then, to reimburse Marriott or any
Affiliate for  expenditures to the extent such  expenditures  have constituted a
Manager Reserve Advance pursuant to any of the Management  Agreements.  Payments
made to reimburse  Marriott or any Affiliate for expenditures to the extent that
such  expenditures  have constituted a Manager Reserve Advance shall be deducted
from Aggregate  Operating  Profit prior to any other  deduction or  distribution
therefrom except for distributions of Aggregate Tenant's First Priority.

                                      -14-
<PAGE>

         B. Tenant  irrevocably  directs  Marriott to pay and Marriott agrees to
pay (or repay, as applicable),  from Aggregate Operating Profit, without notice,
demand or request  therefor,  but in each instance  subject to the provisions of
this Agreement: (i) Aggregate Tenant's First Priority, Aggregate Tenant's Second
Priority and Aggregate  Tenant's Third Priority,  to Tenant when due and payable
hereunder,  (ii)  replenishment  of any Holdback  Agreement  Advances to Tenant,
(iii)  distributions  to Tenant and Marriott  with  respect to Tenant  Advances,
Additional Marriott Advances and Additional Manager Advances, (iv) distributions
to the  Managers  with respect to the  Aggregate  Priority  Management  Fee, (v)
distributions to the Managers with respect to the Aggregate Base Management Fee,
and (vi) any other distributions  provided for in Section 2.02.A, in each of the
foregoing  instances  set forth in this Section  4.02.B(i)  through (vi), at the
time interim  distributions are made pursuant to Section 3.01, and to the extent
of the sufficiency of and in the order of  distribution  of Aggregate  Operating
Profit pursuant to Section 2.02.A.

         4.03  Classification  of Advances Made by Marriott to Cover Payments of
Aggregate Tenant's First Priority

         A. The  parties  acknowledge  that  Tenant,  to ensure  that Tenant has
sufficient  funds to timely pay Minimum  Rent due  pursuant to the Leases,  must
receive,  and Marriott  agrees to pay to Tenant  subject to the  sufficiency  of
funds available therefor pursuant to this Agreement and the Guaranty  Agreement,
Aggregate  Tenant's  First Priority on or before the first day of each Portfolio
Accounting  Period. As a result, it is possible that Marriott will pay Aggregate
Tenant's First Priority prior to determining  whether Aggregate Operating Profit
for such  Portfolio  Accounting  Period was  adequate  to cover  such  Aggregate
Tenant's First  Priority.  If for any given  Portfolio  Accounting  Period it is
determined  that  Aggregate  Operating  Profit was  inadequate to cover any such
payments of Aggregate  Tenant's  First  Priority that were made by Marriott with
respect to such Portfolio  Accounting Period, then one of the following shall be
applicable:

         1.       if the Guaranty  Term had not expired  before the first day of
                  such Portfolio Accounting Period and Marriott's  obligation to
                  advance funds had not terminated for any other reason pursuant
                  to the  terms of the  Guaranty  Agreement  (an  expiration  or
                  termination as aforesaid, hereinafter, a "Guaranty Termination
                  Event"),   then  that  portion  of  Aggregate  Tenant's  First
                  Priority paid with respect to such Portfolio Accounting Period
                  in excess of the sum of  Aggregate  Operating  Profit for such
                  Portfolio  Accounting Period shall be deemed to be a "Guaranty
                  Advance" made pursuant to the Guaranty Agreement; or

         2.       if a  Guaranty  Termination  Event had  occurred  prior to the
                  first  day of such  Portfolio  Accounting  Period,  then  that
                  portion of Aggregate Tenant's First Priority paid with respect
                  to such  Portfolio  Accounting  Period in excess of the sum of
                  Aggregate  Operating  Profit  for  such  Portfolio  Accounting
                  Period  shall be deemed to have been  funded by Marriott as an
                  Additional Marriott Advance.

                                      -15-
<PAGE>

         No  provision  of this  Section  4.03.A  shall be  construed to require
Marriott to make  payments of  Aggregate  Tenant's  First  Priority  except from
Aggregate Operating Profit and Marriott Guaranty Advances available therefor.

         B. Notwithstanding anything herein to the contrary,  within twenty (20)
days after the end of each Portfolio Accounting Period, Marriott shall determine
whether  it is deemed to have  made a  Marriott  Guaranty  Advance  pursuant  to
Section 4.03.A with respect to such Portfolio Accounting Period, and if Marriott
has made such an advance  with  respect  to such  Portfolio  Accounting  Period,
Marriott  shall advise  Tenant in writing of the type and amount of such advance
(each such notice, an "Advance Notice"). This paragraph shall only be applicable
with respect to advances made or deemed made pursuant to this Section 4.03.

         4.04  Financial  Statements.   Marriott  shall  furnish  the  following
statements to Tenant:

         A. As soon as  publicly  available  or, in the event the same  shall no
longer be required to be made public,  within forty-five (45) days after each of
the first three fiscal  quarters of any Portfolio  Fiscal Year,  the most recent
Consolidated Financials.

         B. As soon as  publicly  available  or, in the event the same  shall no
longer be required to be made public,  within  ninety (90) days after the end of
each  Portfolio  Fiscal Year, the most recent  Consolidated  Financials for such
year, certified by an independent certified public accountant.

         C. Promptly after the sending or filing thereof,  copies of all reports
which  Marriott  sends to its  security  holders  generally,  and  copies of all
periodic  reports which  Marriott  files with the United States  Securities  and
Exchange  Commission  or any stock  exchange  on which its  shares are listed or
traded.

                                    ARTICLE V
                     POOLING OF WORKING CAPITAL AND RESERVES

         5.01 Pooling of Working Capital

         A. The Working Capital applicable to all Portfolio  Properties pursuant
to the  Management  Agreements  shall be  pooled  and used by  Marriott  for the
purposes  set  forth  in  Section  4.02.A  hereof   pursuant  to  the  Managers'
cash-management   policies   (the   "Pooled   Working   Capital").    Upon   any
Deconsolidation  Event  as to one or more but  less  than  all of the  Portfolio
Properties,  Pooled  Working  Capital shall be allocated as described in Section
6.02.B. Upon the expiration or termination of all Management  Agreements for all
Portfolio  Properties,  Tenant  shall,  except  as  otherwise  provided  in  the
Management  Agreements  or this  Agreement,  receive any unused  Pooled  Working
Capital.

                                      -16-
<PAGE>

         B. Subject to Section 5.01.C,  Tenant shall have the right, without any
obligation and in its sole and absolute  discretion,  within ten (10) days after
written request  therefor,  to advance any additional  funds, over and above the
initial  Working  Capital for such Portfolio  Properties,  necessary to maintain
Pooled  Working  Capital at a level  determined  by  Marriott  to be  reasonably
necessary to satisfy the needs of the Portfolio  Properties  as their  operation
may from time to time require. Any such request by Marriott shall be accompanied
by a reasonably detailed  explanation of the reasons for this request. All funds
so advanced  shall be added to Pooled  Working  Capital.  All  advances  made by
Tenant pursuant to this Section 5.01.B shall constitute  "Tenant Working Capital
Advances."  Tenant Working  Capital  Advances shall be repaid in accordance with
Section  2.02.A(5).  Additionally,  if  Tenant  does not elect to  provide  such
additional funds, Marriott shall also have the right, without any obligation and
in its sole and absolute discretion, within ten (10) days after such initial ten
(10) day  period,  to advance  such  additional  funds as Tenant  elected not to
advance,  and any such advance shall constitute an Additional  Marriott Advance.
Additional  Marriott  Advances  shall  be  repaid  in  accordance  with  Section
2.02.A(5).  If neither  party elects to advance  funds as  contemplated  in this
Section 5.01.B,  the parties will have the rights set forth in Section 4.05.A of
each  Management  Agreement for such  Portfolio  Properties  (which right may be
exercised as to all, but not less than all, of such Portfolio Properties).

         C. Notwithstanding the provisions of Section 5.01.B, Marriott shall not
request  a Tenant  Working  Capital  Advance,  and will  make any such  required
advance from its own funds (which will not  constitute  an  Additional  Marriott
Advance), until the expiration of at least twelve (12) months from the date that
the last  Additional  Property  and  Initial  Property  has  become a  Portfolio
Property  (excluding any Additional Property or Initial Property with respect to
which the Agreement to Lease has been terminated).

         5.02 Pooling of Reserves

         All  deposits  required  to be made  to the  Reserves  pursuant  to the
Management  Agreements with respect to the Portfolio Properties shall instead be
pooled into one account to be used for the purposes set forth in the  Management
Agreements  for  the  Portfolio  Properties  on  a  pooled  basis  (the  "Pooled
Reserve").  The funds in the Pooled Reserve shall be available for all Portfolio
Properties  regardless of the amount of funds that would  otherwise be held in a
Reserve for a  particular  Portfolio  Property if the Reserves  were  separately
maintained.  Upon any Deconsolidation  Event as to one or more but less than all
of the Portfolio Properties,  the Pooled Reserve shall be allocated as described
in  Section  6.02.B.  Upon  the  expiration  or  termination  of all  Management
Agreements for all Portfolio  Properties,  Marriott  shall,  except as otherwise
provided in the Management Agreements or this Agreement, release and transfer to
Landlord or (if  directed by Landlord) to Tenant the  remaining  Pooled  Reserve
funds  after  payment of all  expenses  that are to be paid out of the  Reserves
pursuant  to the  Management  Agreements  relating  to  periods  prior  to  such
expiration or termination.

                                      -17-
<PAGE>

                                   ARTICLE VI
           ADDITION AND REMOVAL OF PROPERTIES AS PORTFOLIO PROPERTIES

         6.01     Addition of Properties as Portfolio Properties

         Immediately upon Closing  pursuant to a Purchase  Contract with respect
to an  Additional  Property  or leasing of an Initial  Property  pursuant to the
Agreement  to Lease and  execution  of a Lease with  respect  to such  Property,
execution of a  Management  Agreement  by the  applicable  Manager to manage the
Property (or confirmation of the applicability of a Management Agreement to such
Property,  as  applicable),  and  execution of the related  agreements  required
pursuant to the terms of the  Agreement to Lease or the Purchase  Contracts  (as
applicable), such Property shall be deemed to be a Portfolio Property subject to
the  provisions  of this  Agreement.  Simultaneously  with the execution of such
agreements, Marriott, the applicable Manager, and Tenant shall sign an agreement
confirming the applicability of this Agreement to such Property,  which shall be
binding on all parties to this Agreement and the signature of all other Managers
other than the applicable  Manager on any such confirmatory  agreement shall not
be  necessary  to bind  them in  confirming  that  such  Property  has  become a
Portfolio  Property.  If a Property becomes a Portfolio  Property on a day other
than the first day of a Portfolio  Accounting  Period,  prorated  amounts of the
Gross Revenues and Deductions (and other amounts as may be necessary) applicable
to such  Property for the period from and after the date on which such  Property
became a  Portfolio  Property as are  appropriate,  in the  parties'  reasonable
judgment,  shall be included in the  calculation of Aggregate Gross Revenues and
Aggregate  Deductions  (and other amounts as may be necessary) for the Portfolio
Accounting  Period in which  such  Property  became a  Portfolio  Property,  and
otherwise consistent with the provisions of Section 17 of the Agreement to Lease
with respect to Apportionments.

         6.02 Removal of Properties as Portfolio Properties

         A.  Each of the  following  shall be,  with  respect  to any  Portfolio
Property, a "Deconsolidation  Event": (i) if any Portfolio Property ceases to be
owned by (1) the owner of such Portfolio Property as of the date hereof, (2) any
Affiliate of the owner of such Portfolio  Property as of the date hereof or HPT,
or (3) any  other  permitted  successor  to the  interest  of the  owner of such
Portfolio  Property as of the date hereof and/or such  Affiliate of the owner of
such  Portfolio  Property as of the date hereof and HPT with respect to all (but
not less than  all) of the  then-remaining  Portfolio  Properties  (a  "Landlord
Deconsolidation  Event"),  or (ii) if any Portfolio Property ceases to be leased
by (1)  Tenant,  (2) any  Affiliate  of  Tenant  or  Landlord,  or (3) any other
permitted successor to the interest of Tenant, Landlord and/or such Affiliate of
either of them with respect to all (but not less than all) of the then-remaining
Portfolio  Properties  (a  "Tenant  Deconsolidation  Event"),  or  (iii)  if the
applicable  Management  Agreement is terminated  with respect to such  Portfolio
Property (a "Manager  Deconsolidation  Event").  No provision of this  Agreement
shall  be  construed  as  modifying  the  terms of any  Lease or

                                      -18-
<PAGE>

any Management Agreement, Franchise Agreement or Owner Agreement with respect to
transfers of any interest of any part therein.

         B. From and after the date of a Tenant Deconsolidation Event or Manager
Deconsolidation  Event with respect to any particular  Portfolio Property,  such
Property  shall no longer be treated as a  Portfolio  Property  pursuant to this
Agreement.  If the Deconsolidation Event occurs on a day other than the last day
of a Portfolio  Accounting  Period,  the parties  shall  exclude  such  prorated
amounts  of the Gross  Revenues  and  Deductions  (and  other  amounts as may be
necessary)   applicable   to  such   Property  for  the  period   following  the
Deconsolidation  Event, as are appropriate in their reasonable judgment,  in the
calculation  of Aggregate  Gross  Revenues and Aggregate  Deductions  (and other
amounts as may be necessary)  for the Portfolio  Accounting  Period in which the
Deconsolidation  Event  occurred.  Additionally,  the  parties  shall  make such
prorations,  adjustments,  allocations,  and changes  pursuant to the Allocation
Formula  set forth in  Section  6.02.C  hereof to  reflect  the  removal of such
Property from being subject to this Agreement, including, without limitation, to
allocate  to  such  Property  its  continuing  liability  with  respect  to  any
outstanding  Aggregate  Priority  Management  Fee,  any  outstanding  Additional
Marriott Advances,  any outstanding Additional Manager Advances, any outstanding
Holdback  Agreement  Advances  remaining to be replenished,  and any outstanding
Tenant Advances.  Notwithstanding the foregoing,  if the applicable Manager will
not continue to manage the Property  being  removed  pursuant to the  Management
Agreement  applicable to such  Property,  then (a) Tenant shall require that any
successor manager enter into a cash management agreement to which the applicable
Manager and Marriott are each a party which  provides  for  assurances  that the
Operating  Profit  for  such  Hotel  is  applied  to  repay  amounts  due to the
applicable  Manager  and  Marriott  in  accordance  with  Section  3.02.B of the
Management  Agreement with respect to the Hotel,  as the applicable  Manager and
Marriott  may  reasonably  require,  or (b) HPT shall  provide (and Tenant shall
cause HPT to so provide) a written  guaranty that the Operating  Profit for such
Hotel  shall be applied  to repay  amounts  due to the  applicable  Manager  and
Marriott in  accordance  with Section  3.02B of the  Management  Agreement  with
respect to each such Hotel  which  Manager  will no longer  continue  to manage.
Further  notwithstanding the foregoing, if Tenant will not continue to lease the
Property being removed  pursuant to the Lease,  then there shall be no reduction
of the  outstanding  amount of any Tenant  Working  Capital  Advances and Tenant
Aggregate  Operating  Loss  Advances.  Additionally,  in the  case of a  Manager
Deconsolidation   Event,  Tenant  and  the  applicable   Manager,   both  acting
reasonably,  shall  determine  the  portion  of (1) the Pooled  Working  Capital
allocable to the Property  being  removed from this  Agreement and the amount of
the Pooled  Working  Capital  so  allocated  shall be  remitted  to the  parties
entitled to the same pursuant to the applicable Management Agreement,  the Owner
Agreements  and this  Agreement,  and (2) the Pooled  Reserve  allocable  to the
Property  being removed from this Agreement and the amount of the Pooled Reserve
so allocated  shall,  after payment of all amounts  properly  payable  therefrom
pursuant to the  Management  Agreement and this  Agreement:  (i) if the Property
which is the subject of such Manager  Deconsolidation Event shall remain subject
to the  Lease,  be made  available  to Tenant to allow  Tenant  to  fulfill  its
obligations  under the Lease, and (ii) otherwise,  be delivered to Landlord.  In
determining  the portion of the Pooled Reserve

                                      -19-
<PAGE>

allocable to such Property, the parties shall take into account whether and when
such Property and the  Portfolio  Properties  have each  undergone a substantial
soft-goods or case-goods replacement.

         C. The "Allocation Formula" shall be to multiply the amount in question
by a fraction,  the numerator of which is the Operating  Profit for the Property
with  respect  to which a Tenant  Deconsolidation  Event  has  occurred  for the
preceding thirteen (13) full Portfolio  Accounting Periods,  and the denominator
of which is the Aggregate Operating Profit for all Portfolio  Properties for the
same  period.  From and after a Tenant  Deconsolidation  Event with respect to a
Property,  such Property  shall  continue to be liable for any items relating to
the  period  before  such  Tenant  Deconsolidation  Event as  allocated  to such
Property pursuant to this Section 6.02.C,  and, except as otherwise provided for
herein, the balance of the Portfolio  Properties shall have no further liability
with to such allocated amount.

         D. From and after the date of a Landlord Deconsolidation Event (that is
not also a Tenant Deconsolidation Event or a Manager Deconsolidation Event) with
respect to any particular  Portfolio Property,  such Property shall no longer be
treated as a Portfolio  Property for purposes of Section 5.02 of this Agreement,
but shall continue to be treated as a Portfolio Property for all other purposes.

         6.03  Removal of the Kauai Hotel as a Portfolio  Property.  At any time
while this Agreement is in effect and applicable to the Kauai Hotel,  Tenant may
elect,  upon not less than sixty (60) days written notice to Marriott,  to cause
the Kauai  Hotel to cease to be a  Portfolio  Property  subject  to the  pooling
aspects of this Agreement, and thereafter the Kauai Hotel,  notwithstanding that
no change has occurred with respect to ownership of Tenant's  leasehold interest
therein,  and notwithstanding  that no change has occurred with respect to Kauai
Owner's fee interest  therein,  shall be treated for all purposes as if a Tenant
Deconsolidation  Event and a Landlord  Deconsolidation  Event had occurred  with
respect thereto (a "Kauai Deconsolidation Event").

                                   ARTICLE VII
                              TRANSITION PROVISIONS

         7.01     Transition Of Initial Properties.

         The  parties  acknowledge  that,  subject  to the terms and  conditions
herein set forth,  it is their mutual intent to make  financial  adjustments  to
place  Tenant in the  economic  position in which it would have been had each of
the Initial Properties been made subject to the Lease and the pooling aspects of
this  Agreement  on the date hereof,  notwithstanding  the fact that some of the
Initial  Properties will be made subject to the Lease, the Management  Agreement
applicable  thereto,  the  pooling  aspects  of this  Agreement  and  all  other
documents  contemplated  by the  Agreement  to Lease  with  respect to each such
Initial  Property  (collectively,  the "Transaction  Documents")  after the date
hereof.  To give effect to such  intent,  the parties  hereby  agree as follows,
which

                                      -20-
<PAGE>

agreement  is a  material  part  of the  consideration  for  the  covenants  and
agreements set forth in this Agreement:

              A. Together with each interim accounting  provided to Tenant after
the close of each Portfolio  Accounting  Period as provided for in Section 3.01,
Marriott shall also deliver to Tenant a hypothetical interim accounting for such
Portfolio  Accounting  Period  (the  "Hypothetical  Report")  calculated  in all
respects as the actual interim  accounting  except that the Hypothetical  Report
shall be prepared on the assumption that each Initial  Property was made subject
to the Transaction Documents on the date of this Agreement,  notwithstanding the
actual date on which any of such Initial Properties were or will be made subject
to the  Transaction  Documents.  The  Hypothetical  Report  shall also take into
account sums paid with respect to such Portfolio Accounting Period to Affiliates
of HPT pursuant to existing lease  arrangements  between such  Affiliates of HPT
and Affiliates of Marriott ("Existing Lease Payments"), which lease arrangements
would otherwise have been  terminated had the Properties  which are the subjects
thereof been made subject to the Lease and the pooling aspects of this Agreement
on the date hereof.

              B. The  Hypothetical  Report  shall also  indicate any sums Tenant
would have been  entitled to receive as  distributions  of  Aggregate  Operating
Profit under  Sections  2.02 of this  Agreement  over and above  Existing  Lease
Payments  actually made with respect to such period,  using the  assumptions set
forth  for  such  Hypothetical  Report  in the  foregoing  Section  7.01.A  (the
"Hypothetical Tenant Distribution").

              C. If the  Hypothetical  Tenant  Distribution  is larger  than the
actual  distributions  due to Tenant (the  "Actual  Tenant  Distribution"),  the
difference between such Hypothetical  Tenant  Distribution and the Actual Tenant
Distribution shall constitute the "Deficiency Owed Tenant." If the Actual Tenant
Distribution is larger that the Hypothetical Tenant Distribution, the difference
between such Actual Tenant Distribution and the Hypothetical Tenant Distribution
shall constitute the "Surplus."

              D. If the foregoing interim accounting and Hypothetical Report for
any Portfolio  Accounting  Period  indicate a Deficiency  Owed Tenant,  Marriott
shall pay such  Deficiency  Owed Tenant to Tenant at the time it provides Tenant
with such interim  accounting and Hypothetical  Report. If the foregoing interim
accounting and Hypothetical Report for any Portfolio  Accounting Period indicate
a Surplus,  there shall be no  adjustment to the  distributions  provided for in
this Agreement.

              E. The  provisions  of this Section  7.01 shall  terminate on such
date as all  Initial  Properties  shall  have  either  (i)  become  a  Portfolio
Property,  or (ii) been  eliminated  from the Agreement to Lease pursuant to the
terms thereof. If a termination  pursuant to the foregoing clause (ii) occurs on
a day other than the last day of a Portfolio  Accounting Period,  Marriott shall
make such adjustments as are appropriate in its reasonable judgment,  to reflect
the  elimination  of any such Initial  Property for the balance of the Portfolio
Accounting  Period  in which  such  termination  occurred.  Furthermore,  if the
Agreement to Lease is terminated  with respect to any Initial  Property

                                      -21-
<PAGE>

prior to the date such  Initial  Property  becomes  a  Portfolio  Property,  the
Hypothetical  Report  shall be prepared  without  consideration  of such Initial
Property  from and  after  the date of such  termination  with  respect  to such
Initial Property.  If such termination  occurs on a day other than the first day
of a Portfolio  Accounting Period,  Marriott shall, in its reasonable  judgment,
make such  prorations and  adjustments as it deems  appropriate in preparing the
Hypothetical Report for such Portfolio Accounting Period.

         7.02     Annual Accounting Statements and Cash Adjustments

         Calculations  and payments of  Deficiencies  Owed Tenant and  Surpluses
made with respect to each Portfolio  Accounting Period within a Portfolio Fiscal
Year shall be accounted for  cumulatively.  Within sixty (60) days after the end
of each Portfolio  Fiscal Year,  Marriott shall deliver to Tenant a statement in
reasonable detail of such calculations for the immediately  preceding  Portfolio
Fiscal Year and a certificate of Marriott's chief accounting  officer certifying
that such year-end statement is true and correct.  The parties shall, within ten
(10)  Business  Days  after  Tenant's  receipt  of  such  statement,   make  any
adjustments, by cash payment if required as set forth above, in the amounts paid
or retained for such  Portfolio  Fiscal Year as are needed  because of the final
figures set forth in such statement.  Such final accounting shall be controlling
over the interim accountings.

                                  ARTICLE VIII
                            MISCELLANEOUS PROVISIONS

         8.01     Notices.

         A. Any and all notices, demands, consents, approvals, offers, elections
and other  communications  required or permitted  under this Agreement  shall be
deemed  adequately given if in writing and the same shall be delivered either in
hand,  by  telecopier  with  written  acknowledgment  of receipt,  or by mail or
Federal  Express or  similar  expedited  commercial  carrier,  addressed  to the
recipient  of the notice,  postpaid  and  registered  or  certified  with return
receipt  requested  (if by mail),  or with all  freight  charges  prepaid (if by
Federal Express or similar carrier).

         B. All notices  required or  permitted  to be sent  hereunder  shall be
deemed to have been given for all  purposes of this  Agreement  upon the date of
acknowledged  receipt, in the case of a notice by telecopier,  and, in all other
cases,  upon the date of receipt or  refusal,  except that  whenever  under this
Agreement a notice is either received on a day which is not a business day or is
required  to be  delivered  on or before a specific  day which is not a business
day, the day of receipt or required delivery shall  automatically be extended to
the next business day.

         C. All such notices shall be addressed,

         if to Marriott  (and/or if to a Manager,  addressed  to such Manager in
         care of Marriott, at the following address):

                                      -22-
<PAGE>

                  Marriott International, Inc.
                  10400 Fernwood Road, Dept. 52/924.11
                  Bethesda, Maryland 20817
                  Attn:  Treasurer
                  Telecopier No. (301) 380-5067

         with a copy to:

                  Marriott International, Inc.
                  10400 Fernwood Road, Dept. 52/923
                  Bethesda, Maryland 20817
                  Attn:  Assistant General Counsel -- Lodging Operations
                  Telecopier No. (301) 380-6727

         and a copy to:

                  Marriott International, Inc.
                  10400 Fernwood Road, Dept. 52/11.10
                  Bethesda, Maryland 20817
                  Attn:  Lodging - Senior Vice President, Finance
                  Telecopier No. (301) 380-3667

            and a copy to:

                   Venable, Baetjer and Howard, LLP
                   1800 Mercantile Bank and Trust Building
                   2 Hopkins Plaza
                   Baltimore, Maryland 21201
                   Attn:  James D. Wright, Esq.
                   Telecopier No. (410) 244-7742

            if to Tenant to:

                  HPT TRS MI-135, INC.
                  c/o Hospitality Properties Trust
                  400 Centre Street
                  Newton, Massachusetts 02458-2076
                  Attn:  President
                  Telecopier No. (617) 969-5730

                                      -23-
<PAGE>

with a copy to:

                  Sullivan & Worcester, LLP
                  One Post Office Square
                  Boston, Massachusetts  02109
                  Attn:  Alexander A. Notopoulos, Esq.
                         Sander E. Ash, Esq.
                  Telecopier No. (617) 338-2880

         D. By notice  given as herein  provided  the  parties  hereto and their
respective  successors and assigns shall have the right from time to time and at
any time while this Agreement is in effect to change their respective  addresses
effective upon receipt by the other party of such notice and each shall have the
right to specify as its address any other  address  within the United  States of
America.

         8.02 Applicable Law; Jurisdiction

         This Agreement shall be interpreted, construed, applied and enforced in
accordance  with  the laws of the  State of  Maryland  applicable  to  contracts
between  residents  of  Maryland  which  are  to be  performed  entirely  within
Maryland,  regardless of (i) where any such instrument is executed or delivered;
or (ii) where any payment or other  performance  required by any such instrument
is made or required to be made;  or (iii) where any breach of any  provision  of
any such instrument  occurs, or any cause of action otherwise  accrues;  or (iv)
where any  action or other  proceeding  is  instituted  or  pending;  or (v) the
nationality, citizenship, domicile, principal place of business, or jurisdiction
of organization or  domestication  of any party; or (vi) whether the laws of the
forum  jurisdiction  otherwise would apply the laws of a jurisdiction other than
the State of Maryland;  or (vii) any  combination of the foregoing.  The parties
acknowledge,  consent and agree that the United  States  District  Court for the
District of Maryland  and any court of  competent  jurisdiction  in the State of
Maryland  shall have  exclusive  jurisdiction  in any  proceeding  instituted to
enforce this  Agreement or any provision  hereof and any objections to venue are
hereby waived.

         8.03 Binding Effect

         The rights, powers,  privileges,  and discretions (hereinafter referred
to as the "rights") to which the parties may be entitled  hereunder  shall inure
to the benefit of each of their respective successors and permitted assigns. All
the rights of the parties herein are cumulative and not  alternative  and may be
enforced  successively or concurrently.  Failure of either party to exercise any
of its rights  shall not be deemed a waiver  thereof,  and no waiver of any of a
party's  rights  shall be  deemed  to  apply to any  other  rights.  The  terms,
covenants,  and conditions of or imposed upon each party herein shall be binding
upon the successors and assigns of such party.

                                      -24-
<PAGE>

         8.04 Severability

         In case any provision (or any part of any provision)  contained in this
Agreement shall for any reason be held to be invalid,  illegal or  unenforceable
in any respect,  such  invalid,  illegal or  unenforceable  provision  shall not
affect any other provision (or remaining part of the affected provision) of this
Agreement,  but this Agreement shall be construed as if such invalid, illegal or
unenforceable provision had not been included herein.

         8.05 Grammar

         When used herein,  the singular  shall  include the plural,  the plural
shall include the singular, and the use of any gender shall be applicable to all
genders.

         8.06 Time of the Essence

         Time  is of the  essence  in the  performance  of the  obligations  and
undertakings of the parties hereto.

         8.07 Captions

         The captions  appearing in this Agreement are inserted only as a matter
of  convenience  and do not define,  limit,  construe  or describe  the scope or
intent of the sections of this Agreement nor in any way affect this Agreement.

         8.08 Remedies

         No  remedy  herein  conferred  upon a party  hereto is  intended  to be
exclusive of any other remedy, and each and every remedy shall be cumulative and
shall be in addition to every other remedy  given  hereunder or now or hereafter
existing at law or in equity or by statute or otherwise.

         8.09 Due Authorization

         Each  party  hereto  represents  and  warrants  to the other  that this
Agreement has been duly  authorized,  executed and delivered by the representing
party,  and  constitutes  the binding and  enforceable  obligation of such party
subject to (i) applicable bankruptcy,  insolvency,  reorganization,  moratorium,
and other  laws  affecting  the  rights  of  creditors  generally;  and (ii) the
exercise of judicial discretion in accordance with general principles of equity.

         8.10 Counterparts

         The parties  agree that this  Agreement  may be signed and delivered in
counterparts.

                                      -25-
<PAGE>

         8.11 Entire Agreement

         This Agreement  constitutes  the entire  agreement  between the parties
hereto with respect to the subject  matter  hereof and shall  supersede and take
the place of any other instruments  purporting to be an agreement of the parties
hereto relating to the subject matter hereof.

         8.12 GAAP

         All calculations  made pursuant to this Agreement shall,  except to the
extent  expressly  provided to the contrary  herein,  be made in accordance with
generally accepted accounting principles, consistently applied.

         8.13 Tenant's  Obligations  Under The Lease.  Nothing  contained herein
shall limit Tenant's  obligations  under the Lease.  It is  acknowledged  by the
parties hereto that this Agreement is not intended to, and shall not,  interfere
with or restrict the Landlord's rights under the Lease.

         8.14  Termination of Tenant  Liability.  Upon  expiration of the entire
term of each Management Agreement and expiration of the entire term of the Lease
(in each  instance  including  with  respect  to any  exercised  renewals),  and
provided that such  expiration did not result from a default by Tenant under any
Management  Agreement,  Tenant shall have no further  liability for repayment of
Additional Marriott Advances made pursuant to this Agreement.

         8.15  Default.  It shall be a default by any party hereto if such party
fails to perform any obligation  hereunder  within eight (8) Business Days after
receipt of written notice from a  non-defaulting  party demanding such cure, or,
if such default is  susceptible  of cure,  but such cure cannot be  accomplished
within said eight (8) Business Day period of time, if the defaulting party fails
to commence the cure of such  default  within such eight (8) Business Day period
of such notice or thereafter fails to diligently pursue such cure to completion.

         8.16 NONLIABILITY OF OFFICERS, ETC. NO TRUSTEE, OFFICER, SHAREHOLDER OR
AGENT  OF  MARRIOTT,  ANY  MANAGER  OR  TENANT  SHALL  BE HELD  TO ANY  PERSONAL
LIABILITY,  JOINTLY  OR  SEVERALLY,  FOR ANY  OBLIGATION  OF, OR CLAIM  AGAINST,
MARRIOTT,  ANY MANAGER OR TENANT. ALL PERSONS DEALING WITH MARRIOTT, ANY MANAGER
OR TENANT, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF MARRIOTT, THE APPLICABLE
MANAGER  OR  TENANT,  AS THE  CASE  MAY BE,  FOR THE  PAYMENT  OF ANY SUM OR THE
PERFORMANCE OF ANY OBLIGATION HEREUNDER.

                                      -26-
<PAGE>

         8.17 Single Agreement; Integration.

              (A) It is expressly  acknowledged  and agreed by each of Marriott,
the Managers,  Landlord and Tenant that the  underlying  terms and conditions of
this  Agreement,   the  Guaranty,  the  Management  Agreements,   the  Franchise
Agreements  and each and every other  document  and  agreement  entered  into in
connection   herewith  or  therewith  and/or   contemplated  hereby  or  thereby
(collectively, the "Deal Terms") have been negotiated by the parties as a single
integrated   transaction.   The  fact  that  there  exists  separate  Management
Agreements  for the different  hotel brands is merely a matter of convenience to
Marriott  and  the  Managers  to  reflect  their  existing  internal   corporate
organization. The purpose of this Agreement and the intent of the parties hereto
is that the  Portfolio  Properties  at all times  constitute a single pool and a
portfolio and the Deal Terms have been established with this understanding (e.g.
The  purchase  price and rent for  certain  properties  has been set at a higher
amount  than would be the case if such  properties  were the  subject of a stand
alone  transaction  or smaller group  transaction  and not  aggregated  with the
Portfolio  Properties.  Landlord  and  Tenant  have  agreed to  include  certain
properties in this  transaction  in locations in which  neither would  otherwise
make an investment  but for the  existence of a portfolio.)  The purpose of this
Agreement  is that the  Properties  constitute  a single pool and the Deal Terms
have been  established  with purpose).  The  aggregation  and integration of the
properties into a single pool and portfolio is a material inducement to Landlord
and Tenant to agree to the Deal Terms and an  underiding  principle  of the Deal
Terms.

              (B) The  Managers  acknowledge  and agree that a  fundamental  and
material purpose of this Agreement is to integrate the Portfolio  Properties and
Deal  Terms as one and to  invalidate  the right of any  Manager  to reject  any
Management  Agreement or this  Agreement as to a particular  Portfolio  Property
(and not to all  Portfolio  Properties)  in the  event of a  bankruptcy  of such
manager. Accordingly,  Manager hereby waives, to the maximum extent permitted by
law,  any right to  terminate  this  Agreement  or reject any of the Deal Terms,
whether  pursuant  to the  Title  11 of the  U.S.  Code  or  any  other  similar
insolvency or state bankruptcy laws.

         8.18 Special Termination Right.

         The  parties  acknowledge  and  agree  that  if,   notwithstanding  the
provisions of Section 9.10 any Manager  terminates any  Management  Agreement or
this  Owner  Agreement  in  connection   with  such  Manager's   reorganization,
recapitalization  or  bankruptcy,  Tenant shall have the right to terminate each
remaining  Management Agreement and Franchise Agreement (without any termination
fee or penalty) by giving  written  notice thereof to Marriott and the Managers,
in which event, all Managing Agreements and franchise Agreements shall terminate
on the later to occur of the date set forth in such notice and 30 days after the
giving thereof.

                   [Signatures appear on the following page.]

                                      -27-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement with the intention of creating an instrument under seal.

                                    MARRIOTT:

WITNESS:                            MARRIOTT INTERNATIONAL, INC.

/s/ Laura H. Brophy                 By: /s/ Timothy J. Grisius (SEAL)
Name: Laura H. Brophy               Name:   Timothy J. Grisius
                                    Title:  Authorized Signatory

                                    MANAGERS:

WITNESS:                            MARRIOTT HOTEL SERVICES, INC.

/s/ Laura H. Brophy                 By: /s/ Timothy J. Grisius (SEAL)
Name: Laura H. Brophy               Name:   Timothy J. Grisius
                                    Title:  Authorized Signatory

WITNESS:                            RESIDENCE INN BY MARRIOTT, INC.

/s/ Laura H. Brophy                 By: /s/ Timothy J. Grisius (SEAL)
Name: Laura H. Brophy               Name:   Timothy J. Grisius
                                    Title:  Vice President

WITNESS:                            COURTYARD MANAGEMENT
                                    CORPORATION

/s/ Laura H. Brophy                 By: /s/ Timothy J. Grisius (SEAL)
Name: Laura H. Brophy               Name:   Timothy J. Grisius
                                    Title:  Vice President

WITNESS:                            SPRINGHILL SMC CORPORATION

/s/ Laura H. Brophy                 By: /s/ Timothy J. Grisius (SEAL)
Name: Laura H. Brophy               Name:   Timothy J. Grisius
                                    Title:  Vice President

WITNESS:                            TOWNEPLACE MANAGEMENT
                                    CORPORATION

/s/ Laura H. Brophy                 By: /s/ Timothy J. Grisius (SEAL)
Name: Laura H. Brophy               Name:   Timothy J. Grisius
                                    Title:  Vice President

                                      -28-
<PAGE>

                                    TENANT:

WITNESS:                            HPT TRS MI-135, INC.

/s/ Laura H. Brophy                 By: /s/ John G. Murray (SEAL)
Name: Laura H. Brophy               Name:   John G. Murray
                                    Title:  Vice President

                                      -29-
<PAGE>

                                    Exhibit A

                      Additional Limited Service Properties

                           1.       CYBM             Emeryville, CA
                           2.       SHBM             Renton, WA
                           3.       TSBM             Renton, WA

                                      -30-

<PAGE>

                                    Exhibit B

                               Initial Properties

                     1.       RIBM             Fresno, CA
                     2.       RIBM             Dallas/Richardson, TX
                     3.       RIBM             San Antonio, TX
                     4.       RIBM             Reno, Nevada
                     5.       RIBM             Fort Worth/Fossil Creek, TX
                     6.       CYBM             Fort Worth, Fossil Creek, TX
                     7.       CYBM             Houston/Hobby Airport, TX
                     8.       RIBM             Birmingham/Homewood, AL
                     9.       RIBM             Charlottesville, VA
                     10.      RIBM             Atlanta, GA
                     11.      RIBM             Fairfax/Fairlakes, VA
                     12.      RIBM             Bethlehem, PA
                     13.      CYBM             Bethlehem, PA
                     14.      CYBM             Birmingham, AL
                     15.      MHRS             Nashville, TN
                     16.      MHRS             St. Louis, MO
                     17.      TSBM             Atlanta/Norcross, GA
                     18.      TSBM             Norfolk, Newport News, VA
                     19.      TSBM             Atlanta/Northlake, GA
                     20.      TSBM             Virginia Beach, VA
                     21.      TSBM             Richmond/Northwest, VA
                     22.      TSBM             Fairfax/Chantilly, VA
                     23.      TSBM             Falls Church, Virginia
                     24.      RIBM             Raleigh Airport, NC
                     25.      CYBM             Charlston North, SC
                     26.      RIBM             Chicago/Waukegan, IL
                     27.      RIBM             Raleigh/Cary, NC
                     28.      TSBM             Chicago/W. Dundee, IL
                     29.      CYBM             Chicago/W. Dundee, IL
                     30.      TSBM             Detroit/Novi, MI
                     31.      CYBM             Detroit/Novi, MI

                                      -31-

<PAGE>

                                    Exhibit C

                          Portfolio Accounting Periods*

<TABLE>
<CAPTION>

  Portfolio Accounting Period per      Accounting Period Included         Accounting Period Included
       Portfolio Fiscal Year              From Domestic Hotel                From the Kauai Hotel
                                        Management Agreements's              Management Agreement's
                                              Fiscal Year                        Fiscal Year
------------------------------------------------------------------------------------------------------
<S>            <C>                                <C>                                 <C>

                1st                                1st                                 None
                2nd                                2nd                                 1st
                3rd                                3rd                                 2nd
                4th                                4th                                 3rd
                5th                                5th                                 4th
                6th                                6th                                 5th
                7th                                7th                                 6th
                8th                                8th                                 7th
                9th                                9th                                 8th
                10th                               10th                                9th
                11th                               11th                                10th
                12th                               12th                                11th
                13th                               13th                                12th
</TABLE>

*Assuming  that with respect to such  Portfolio  Accounting  Periods,  the Kauai
Hotel is, during such period, a Portfolio Property.

                                      -32-

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00027-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00027-of-00352.parquet"}]]