Document:

<PAGE>
                                                                    EXHIBIT 10.5

                                    FORM OF

                              MANAGEMENT AGREEMENT

                                      for

                     FELCOR'S EMBASSY SUITES BRANDED HOTELS
<PAGE>

<Table>
<S>                                                                                                   <C>
ARTICLE I
         THE HOTEL; OTHER RELATED AGREEMENTS .......................................................    1
         Section 1.01. The Hotel ...................................................................    1
         Section 1.02. The Other License and Management Agreements .................................    1

ARTICLE II
         TERM ......................................................................................    1
         Section 2.01. Term ........................................................................    1

ARTICLE III MANAGER'S OBLIGATIONS
            Section 3.01. Manager's Obligations ....................................................    1
                  (a)  Costs of the Partnership and Lessee .........................................    2
                  (b)  Personnel ...................................................................    2
                  (c)  Hotel Policies ..............................................................    3
                  (d)  Bank Accounts ...............................................................    3
                  (e)  Operating Budgets ...........................................................    3
                  (f)  Operating Statement .........................................................    5
                  (g)  Capital Budgets .............................................................    5
                  (h)  General Maintenance; Non-Capital Replacements ...............................    6
                  (i)  Operating Equipment .........................................................    6
                  (j)  Operating Supplies ..........................................................    6
                  (k)  Accounting Standards ........................................................    6
                  (l)  Marketing and Advertising ...................................................    6
                  (m)  Permits and Licenses ........................................................    6
                  (n)  Lessee Meetings .............................................................    7
                  (o)  Insurance ...................................................................    7
                  (p)  Lease and Concession Agreements .............................................    7
                  (q)  [Intentionally Deleted] .....................................................    7
                  (r)  Taxes and Assessments .......................................................    7
                  (s)  Compliance with Law .........................................................    7
                  (t)  Satisfaction of Obligations .................................................    7
                  (u)  Requests for Information ....................................................    8
                  (v)  Discounts and Rebates .......................................................    8
                  (w)  Tax and Insurance Accruals ..................................................    8

ARTICLE IV
         LESSEE'S OBLIGATIONS ......................................................................    8
         Section 4.01. Lessee's Obligations ........................................................    8
                  (a)  License Agreement ...........................................................    8
                  (b)  Licenses and Permits ........................................................    8
                  (c)  Operating Funds .............................................................    8
                  (d)  Capital Funds ...............................................................    9
                  (e)  Payments to Manager .........................................................   10
                  (f)  Lessee's Representative .....................................................   10
                  (g)  Lessee's Right of Inspection and Review .....................................   11
                  (h)  Quiet and Peaceable Operation ...............................................   11
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<S>                                                                                                   <C>
ARTICLE V
         MANAGEMENT FEE ............................................................................   11
         Section 5.01. Management Fee ..............................................................   11

ARTICLE VI
         CLAIMS AND LIABILITY ......................................................................   11
         Section 6.01. Claims and Liability ........................................................   11
         Section 6.02. Survival ....................................................................   12

ARTICLE VII
         CLOSURE, EMERGENCIES AND DELAYS ...........................................................   12
         Section 7.01. Events of Force Majeure .....................................................   12
         Section 7.02. Emergencies .................................................................   12

ARTICLE VIII
         CONDEMNATION AND CASUALTY .................................................................   13
         Section 8.01. Condemnation ................................................................   13
         Section 8.02. Casualty ....................................................................   13

ARTICLE IX
         DEFAULT; TERMINATION RIGHTS ...............................................................   13
         Section 9.01. Lessee's Default ............................................................   13
         Section 9.02. Manager Default .............................................................   14
         Section 9.03. [Intentionally deleted.] ....................................................   15
         Section 9.04. Delays ......................................................................   15
         Section 9.05. Manager's Right to Terminate Upon Sale ......................................   15
         Section 9.06. Lessee's Special Rights of Termination ......................................   15
         Section 9.07. Transition Upon Termination .................................................   16

ARTICLE X
         APPLICABLE LAW AND ARBITRATION ............................................................   16
         Section 10.01. Applicable Law .............................................................   16
         Section 10.02. Arbitration of Financial Matters ...........................................   17
                  Subsection 10.02.1. Matters to be Submitted to Arbitration .......................   17
                  Subsection 10.02.2. The Accountants ..............................................   17
                  Subsection 10.02.3. Procedures ...................................................   17
         Section 10.03. Performance During Disputes ................................................   18

ARTICLE XI
         GENERAL PROVISIONS ........................................................................   18
         Section 11.01. Authorization ..............................................................   18
         Section 11.02. Relationship ...............................................................   18
         Section 11.03. Manager's Contractual Authority in the Performance of this Agreement .......   18
         Section 11.04. Further Actions ............................................................   18
         Section 11.05. Successors and Assigns .....................................................   19
         Section 11.06. Notices ....................................................................   19
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<S>                                                                                                   <C>
         Section 11.07. Documents ..................................................................   19
         Section 11.08. Defense ....................................................................   19
         Section 11.09. Waivers ....................................................................   20
         Section 11.10. Changes ....................................................................   20
         Section 11.11. Captions ...................................................................   20
         Section 11.12. Severability ...............................................................   20
         Section 11.13. Interest ...................................................................   20
         Section 11.14. Reimbursement ..............................................................   20
         Section 11.15. Agreement Not an Interest in Real Property .................................   21
         Section 11.16. Set Off ....................................................................   21
         Section 11.17. Third Party Beneficiary ....................................................   21
         Section 11.18. Brokerage ..................................................................   21
         Section 11.19. Survival of Covenants ......................................................   21
         Section 11.20. Estoppel Certificate .......................................................   22
         Section 11.21. Other Agreements ...........................................................   22
         Section 11.22. Periods of Time ............................................................   22
         Section 11.23. Preparation of Agreement ...................................................   22
         Section 11.24. Exhibits ...................................................................   22
         Section 11.25. Counterparts ...............................................................   22
         Section 11.26. Attorneys' Fees and Other Cost .............................................   22
         Section 11.27. Entire Agreement ...........................................................   22
</Table>

                                     -iii-

<PAGE>

                              MANAGEMENT AGREEMENT

         This Management Agreement (the "Agreement") is made and entered into as
of the ______________________ ("Effective Date"), by and between ______________
____________________________________________, with offices located at 545 East
John Carpenter Freeway, Suite 1300, Irving, TX 75062-3933 ("Lessee"), and ______
____________________________________, with offices located at ______________
______________________________ ("Manager").

                                    ARTICLE I
                       THE HOTEL; OTHER RELATED AGREEMENTS

         SECTION 1.01. THE HOTEL. The subject matter of this Agreement is the
management by Manager of the "Hotel," as defined in the Embassy Suites License
Agreement attached hereto as Exhibit "A" (the "License Agreement"), and located
at __________________________________________. The Hotel is owned by FelCor
Suites Limited Partnership, a Delaware limited partnership (the "Partnership"),
and leased to Lessee pursuant to a lease entered into between the Partnership
and Lessee covering the Hotel dated as of _____________ (hereinafter the
"Percentage Lease"). The License Agreement shall exclusively govern Lessee's
right to use the Embassy Suites "System" (as defined in the License Agreement)
in connection with the operation of the Hotel; the Partnership shall have no
right to use the Embassy Suites "System" except as expressly set forth in the
License Agreement. Lessee hereby expressly acknowledges that neither Lessee nor
the Partnership (Lessee and the Partnership are sometimes referred to herein
collectively as "Owners") shall derive any rights in or to the use of the name
________________ or the Embassy Suites System from this Agreement.

         SECTION 1.02. THE OTHER LICENSE AND MANAGEMENT AGREEMENTS. Manager or
its predecessor-in-interest, Embassy Suites, Inc., a Delaware corporation, has
entered into other management agreements (the "Other Management Agreements") and
other license agreements (the "Other License Agreements") in relation to those
hotels listed on Exhibit "E" hereto (the "Other Hotels"). The Partnership or an
affiliate of the Partnership entered into percentage leases with Lessee or an
affiliate of Lessee covering the Other Hotels.

                                   ARTICLE II
                                      TERM

         SECTION 2.01. TERM. The term shall commence as of the date the
Partnership enters into the Percentage Lease with Lessee covering the Hotel (the
"Commencement Date") and, unless earlier terminated in the manner provided
herein, shall continue for the term of years set forth in Exhibit "B" as
measured from the Commencement Date ("Term").

                                   ARTICLE III
                              MANAGER'S OBLIGATIONS

         SECTION 3.01. MANAGER'S OBLIGATIONS. Manager, on behalf of Lessee and
at Lessee's expense as provided for in this Agreement, shall direct the
operation of the Hotel in accordance

<PAGE>

shall be exclusively responsible for directing the day-to-day activities of the
Hotel and for establishing all policies and procedures relating to the
management and operation of the Hotel, subject to the terms and conditions of
this Agreement and the License Agreement. Except as herein specifically
otherwise provided, all cost(s) and expense(s) incurred by Manager in connection
with the performance of its obligations hereinafter set forth shall be Operating
Costs and accordingly shall be paid from the Bank Account as hereinafter defined
in Section 3.01(d) or the Operating Deficit Account as hereinafter defined in
Section 4.01(c), as the case may be. Manager, during the Term, shall have the
following duties and obligations:

         (a) Costs of the Partnership and Lessee. Pursuant to the terms of the
Percentage Lease, the Partnership has agreed to pay, among other things (i)
land, building and personal property taxes and assessments applicable to the
Hotel, (ii) premiums and charges for the casualty insurance coverages specified
on Exhibit "D", (iii) expenditures for capital replacements and (iv)
expenditures for maintenance and repair of underground utilities and structural
elements of the Hotel (collectively, "Partnership Costs"). To the extent this
Agreement obligates or authorizes Manager to pay any such Partnership Costs,
Manager shall pay such Partnership Costs on behalf of the Partnership to the
extent of funds in the Bank Account(s), the Operating Deficit Account or the
Reserve Fund (as such terms are defined below) and the Partnership and Lessee
shall make such adjustments and payments to each other as may be necessary from
time to time to take into account any such payments. Manager shall have no duty,
obligation or liability to the Partnership or Lessee (i) to make any
determination as to whether any expense required to be paid by Manager hereunder
is a Partnership Cost or a cost of Lessee, (ii) to make any determination as to
whether funds in the Bank Account(s), the Operating Deficit Account or the
Reserve Fund belong to the Partnership or Lessee or (iii) to require that
Partnership Costs be paid from funds which can be identified as belonging to the
Partnership, or that other costs and expenses required to be paid by Lessee be
paid from funds which can be identified as belonging to Lessee; it being the
intent of the parties to this Agreement that Lessee and the Partnership shall
look only to each other and not to Manager with respect to moneys that may be
owed one to the other as a consequence of Manager's performance under this
Agreement.

         (b) Personnel. Manager shall employ all personnel working at the Hotel
(excluding any personnel employed by a lessee or concessionaire of space located
in the Hotel) ("Hotel Personnel"). Manager (except to the extent provided below)
shall be the sole judge of the fitness and qualification of all Hotel Personnel
and shall have the sole and absolute right to hire, supervise, order, instruct,
discharge and determine the compensation, benefits and terms of employment of
all Hotel Personnel. In exercising such discretion, however, Manager shall use
all reasonable efforts to hire the most qualified and competent personnel
available, subject to budgetary and other constraints. Manager shall also have
the right to use employees of Manager, Manager's parent and subsidiary and
affiliated companies not located at the Hotel to provide services to the Hotel
("Off-Site Personnel") and to be reimbursed for travel and other out-of-pocket
expenses (excluding any portion of such Off-Site Personnel's compensation or
other general expenses) incurred by Off-Site Personnel in providing services for
the Hotel; provided, however, travel and out-of-pocket expenses of officers of
Manager and its parents and affiliates shall not be reimbursable. All expenses,
costs (including, but not limited to, salaries, benefits and severance pay, to
the extent provided for by Manager as part of its standard employment policies),
liabilities and claims which are related to Hotel Personnel and all
out-of-pocket expenses incurred by Off-Site Personnel in providing services to
the Hotel that are reimbursed to

                                      -2-
<PAGE>

Manager shall be Operating Costs; provided, however, with respect to any moving
expenses for any Hotel Personnel who has not been an employee at the Hotel for
at least twenty-four (24) months, only that portion of such moving expenses
equal to Lessee's Share (as hereinafter defined) shall constitute Operating
Costs and the balance shall be paid by Manager and/or such employee. "Lessee's
Share" shall mean a fraction having twenty-four (24) as its denominator and the
number of months such person has been one of the Hotel Personnel as its
numerator. All expenses for Off-Site Personnel shall be included as a separate
category or item of the Operating Budgets or shall otherwise be approved by
Lessee.

         Manager agrees that it will consult with Lessee regarding the hiring,
transferring, or terminating of the General Manager and Director of Sales for
the Hotel. Lessee shall be afforded an opportunity to review the resumes of, and
to interview the candidates for these positions that Manager deems to be the
best candidate(s) for each position. Manager and Lessee shall consult with each
other concerning such decisions, and Manager agrees to give serious
consideration to the views of Lessee, but in the event Manager and Lessee are
not able to reach a mutually agreeable decision, the decision of Manager shall
control.

         (c) Hotel Policies. Manager shall determine the terms of guest
admittance to the Hotel, establish room rates, and use of rooms for commercial
purposes, subject to the right of Lessee to identify from time to time certain
individuals who shall be entitled to receive complimentary rooms as guests of
Lessee.

         (d) Bank Accounts. Manager shall open and administer the Hotel's bank
accounts in Lessee's name or the name of the Hotel at such banks as Manager and
Lessee shall mutually agree ("Bank Account(s)"). All sums received from the
operation of the Hotel and, except as otherwise provided in Section 4.01(c)
below, all items paid by Manager arising by virtue of Manager's operation of the
Hotel shall pass through the Bank Account(s). Manager's designees shall be
exclusively authorized to administer and make withdrawals from the Bank
Account(s). Each calendar month, Manager, on behalf of Lessee or the
Partnership, as the case may be, shall disburse funds from the Bank Account(s)
to the extent available for the items described on Exhibit "B." The same Bank
Account(s) may be used for the Hotel that are also used for one or more of the
Other Hotels and any sums deposited in such Bank Account(s) may be commingled;
provided, however, no funds from any other hotel may be commingled with sums
deposited in the Bank Account(s) from the operation of the Hotel or any Other
Hotel.

         (e) Operating Budgets. The budget for calendar year 1997 has been
prepared by Manager and provided to the Partnership (the "Operating Budget").
Manager, not less than forty-five (45) days prior to the commencement of each
succeeding full or partial calendar year, shall submit to Lessee, for Lessee's
approval, a proposed Operating Budget for the ensuing full or partial calendar
year, as the case may be. Each Operating Budget shall be accompanied by, and
shall include, a business plan which shall describe business objectives and
strategies for the period covered by the Operating Budget. The business plan
shall include without limitation an analysis of the market area in which the
Hotel competes, a comparison of the Hotel and its business with competitive
hotels, an analysis of categories of potential guests, and a description of
sales and marketing activities designed to achieve and implement identified
objectives and strategies. The Partnership shall not have the right to approve
any Operating Budget.

                                      -3-
<PAGE>

         Lessee's approval of the Operating Budget shall not be unreasonably
withheld or delayed. Manager shall meet with Lessee to discuss the proposed
Operating Budget and Lessee shall provide a written response to Manager
approving or disapproving a proposed Operating Budget within twenty (20) days
after the date Manager and Lessee have met to discuss the proposed Operating
Budget. Lessee shall review the Operating Budget on a line-by-line basis. To be
effective, any notice which disapproves a proposed Operating Budget must contain
specific objections in reasonable detail to individual line items. If Lessee
fails to provide an effective notice disapproving a proposed Operating Budget
within such 20-day period, the proposed Operating Budget shall be deemed to be
approved.

         If the proposed Operating Budget contains disputed budget item(s),
Lessee and Manager agree to cooperate with each other in good faith to resolve
the disputed or objectionable proposed item(s). In the event (i) Lessee and
Manager are not able to reach mutual agreement concerning any disputed or
objectionable item within a period of twenty (20) days after the date Lessee
provides written notice of its objections to Manager, and (ii) the amount in
dispute is in excess of fifty thousand dollars ($50,000), then either party
shall be entitled to submit the dispute to arbitration in accordance with the
provisions of Article X. If Lessee and Manager are unable to resolve the
disputed or objectionable matter(s) prior to the commencement of the applicable
calendar year, the undisputed portions of the proposed Operating Budget shall be
deemed to be adopted and approved. The corresponding disputed line item(s)
contained in the Operating Budget for the preceding calendar year shall be
adjusted as set forth herein and shall be substituted in lieu of the disputed
item in the proposed Operating Budget. Those line items which represent variable
costs from year to year which are in dispute shall be determined by increasing
the preceding calendar year's corresponding line items by an amount determined
by Manager which does not exceed the Consumer Price Index for All Urban
Consumers published by the Bureau of Labor Statistics of the United States
Department of Labor, U.S. City Average, all items (1984-1986 = 100) for the
calendar year prior to the calendar year with respect to which the adjustment to
the line item is being calculated or any successor or replacement index thereto.
The resulting Operating Budget obtained in accordance with the preceding
sentence shall be deemed to be the Operating Budget in effect until such time as
Manager and Lessee have resolved the item(s) objected to by Lessee.

         Manager may revise the Operating Budget from time to time, as
necessary, to reflect any unpredicted significant changes, variables or events
or to include significant, additional, unanticipated items of revenue and
expense. Any such revision shall be submitted to Lessee for approval, which
approval shall not be unreasonably withheld, delayed or conditioned.

         Manager may reallocate part or all of the amount budgeted with respect
to any line item to another line item in the same Department (as hereinafter
defined), but may not reallocate from one Department to another without Lessee's
consent which shall not be unreasonably withheld or delayed. The term
"Department" shall mean and refer to those general divisional categories shown
in the Operating Budget (r.g., Guest Services Department or Administration
Department), but shall not mean or refer to subcategories (g.g., linen
replacement or uniforms) appearing in a divisional category. In addition, in the
event actual Adjusted Gross Revenues (as defined on Exhibit "C" hereto) for any
calendar period are greater than those provided for in the Operating Budget, the
amounts approved in the Operating Budget for suite maintenance, guest services,
food and beverage, telephone, utilities, marketing and hotel repair and
maintenance for any

                                      -4-
<PAGE>

calendar month shall be automatically deemed to be increased to an amount that
bears the same relationship (ratio) to the amounts budgeted for such items as
actual Adjusted Gross Revenue for such month bears to the projected Adjusted
Gross Revenue for such month. Lessee acknowledges that the Operating Budget is
intended only to be a reasonable estimate of the Hotel's income and expenses for
the ensuing calendar year. Manager shall not be deemed to have made any
guarantee, warranty or representation whatsoever in connection with the
Operating Budget.

         (f) Operating Statement. Manager shall prepare and furnish to Lessee,
the following statements: (i) within fifteen (15) days after the end of each
calendar month (Manager shall use all reasonable efforts to provide such reports
within ten (10) days after the end of each calendar month, but in any respect
not later than fifteen (15) days) a detailed profit and loss statement setting
forth the results of the Hotel's operations for such calendar month and the
calendar year to date, with a comparison to the then current Operating Budget;
and a balance sheet setting forth the results of the Hotel's operations for the
calendar year to date and the previous calendar year; (ii) within twenty (20)
days after the end of each calendar quarter, a statement of Income Before
Lessee's Overhead Expenses (as defined on Exhibit "C" hereto), including Income
Before Lessee's Overhead Expenses from Hotel operations calendar year to date:
(iii) within twenty (20) days after the end of each calendar year, a balance
sheet together with a comparison to the previous calendar year, a related
statement of profit and loss (including all supporting departmental schedules of
revenues and expenses), together with a comparison to the previous calendar
year, and having annexed thereto a computation in reasonable detail of the Basic
Management Fee and the Incentive Management Fee for such calendar year; and (iv)
such other additional statements, computations and reports as Lessee shall
reasonably request.

         (g) Capital Budgets. The capital budget for ____ has been prepared by
Manager and provided to the Partnership (the "Capital Budget"). Manager, not
less than forty-five (45) days prior to the commencement of each succeeding
calendar year, shall submit to Lessee a recommended Capital Budget for the
ensuing full or partial calendar year, as the case may be, for furnishings,
equipment, and Hotel capital replacement items as shall be required to
operate the Hotel in accordance with the standards referred to in the License
Agreement. Manager, to the extent it is able to do so without compromising
compliance with the minimum standards required under the terms of the License
Agreement, shall take into consideration the amount of funds available to pay
for the proposed capital expenditures. Manager shall also identify for Lessee
those projects that are required to meet the minimum standards of the License
Agreement and give priority to such items. Lessee and Manager shall meet to
discuss the proposed Capital Budget and Lessee shall be required to make
specific written objections to a proposed Capital Budget in the manner and
within the same time periods specified in Section 3.01(e) with respect to an
Operating Budget. Lessee agrees not to unreasonably withhold or delay its
consent. Manager, at Lessee's expense, shall be responsible for supervising the
design, installation and construction of alterations or additions to, or
rebuilding or renovation of, the Hotel, including any additions to Hotel
furnishings and equipment (collectively, "Capital Improvements"). Lessee shall
have the right to approve and inspect Capital Improvements and any mortgagee
having a first lien on Lessee's leasehold estate in the Hotel ("Lessee's
Mortgagee") or a first lien on the Partnership's fee estate in the Hotel (the
"Partnership's Mortgagee") shall also have any right of approval or inspection
of the Capital Improvements set forth in the mortgage, deed of trust or other
loan documents (collectively, the "Financing Documents") (but only if and to the
extent the

                                      -5-
<PAGE>

Manager has been provided with copies of the Financing Documents). The
Partnership shall not have the right to approve any Capital Budget.

         After a Capital Budget has been adopted, it shall be subject to review
and modification in the event unpredicted or unanticipated capital expenditures
are required during any calendar year due to an emergency situation or
otherwise. Manager and Lessee each agree not to unreasonably withhold or delay
its consent to a proposed modification of a Capital Budget. Any amendment that
is mutually agreed upon shall be set forth in writing and signed by both
parties.

         (h) General Maintenance: Non-Capital Replacements. Manager shall
supervise the maintenance, repair and replacement of fixtures, furnishings and
equipment regardless whether such expenditures are expensed or capitalized and
amortized.

         (i) Operating Equipment. Manager shall select and purchase all
operating equipment for the Hotel such as linens, utensils, uniforms and other
similar items.

         (j) Operating Supplies. Manager shall select and purchase all operating
supplies for the Hotel such as food, beverages, fuel, soap, cleansing items,
stationery and other consumable items.

         (k) Accounting Standards. Manager shall maintain the books and records
reflecting the operations of the Hotel in accordance with the accounting
practices of Manager in conformity with generally accepted accounting principles
("GAAP") consistently applied. The Hotel level generated accounting records
reflecting detailed day-to-day transactions of the Hotel's operations shall be
kept by Manager at the Hotel or at Manager's corporate headquarters, or at such
other location as Manager shall reasonably determine. Manager agrees upon
request to cooperate in good faith with Lessee and its representatives to
facilitate an examination or audit of such books and records; Lessee agrees that
any such examination or audit of such books and records shall be conducted by
one of the "Big Six" firms of certified public accountants.

         (l) Marketing and Advertising. Manager shall advertise and promote the
Hotel in coordination with the sales and marketing programs of the Manager and
other Embassy Suites hotels. Manager may cause the Hotel to participate in sales
and promotional campaigns and activities involving complimentary rooms which are
intended to benefit the business of the Hotel. Manager, in marketing and
advertising the Hotel, shall have the right to use marketing and advertising
services of Off-Site Personnel.

         (m) Permits and Licenses. Manager shall obtain and maintain all
licenses and permits that are required to be held in its name that are necessary
to enable Manager to operate the Hotel in accordance with the terms of this
Agreement and the License Agreement. In addition, Manager shall upon request
cooperate with and assist Lessee in obtaining the various permits and licenses
that are required to be held in the name of either or both of Lessee and the
Partnership that are necessary to enable Manager to operate the Hotel. Manager
shall use all reasonable efforts, to the extent within its control, to comply
with the terms and conditions of all licenses and permits issued with respect to
the Hotel and the business conducted at the Hotel, including without limitation
the terms and conditions of the License Agreement.

                                      -6-
<PAGE>

         (n) Lessee Meetings. A representative of Manager's corporate staff and
the Hotel's general manager shall meet with Lessee's Representative (as
hereinafter defined) quarterly to review and discuss the previous and future
quarter's operating statement, cash flow, budget, capital expenditures,
important personnel matters and the general concerns of Lessee and Manager
("Quarterly Lessee's Meeting"). Except to the extent otherwise mutually agreed
upon by Lessee and Manager, all Quarterly Lessee's Meetings shall be held at the
Hotel.

         (o) Insurance. Manager shall procure and maintain throughout the Term
the insurance coverages set forth on Exhibit "D".

         (p) Lease and Concession Agreements. Manager shall consult with Lessee
to determine the desirability of entering into lease and concession agreements
to provide activities or services, including the food and beverage facilities,
for the benefit of the Hotel and its guests. In situations in which it is
mutually determined to be desirable to enter into lease or concession
agreements, Manager shall assist Lessee to the extent requested in identifying
suitable lessees and concessionaires, negotiating mutually agreeable lease and
concession agreements, and monitoring the performance of the lessees and
concessionaires under the agreements. The revenues and income generated by a
lessee or concessionaire shall be excluded from Gross Revenues, but Gross
Revenues shall include all rental or other payments made to Lessee pursuant to
the provisions of such agreements.

         (q) [Intentionally Deleted]

         (r) Taxes and Assessments. Manager and/or Manager's agent shall
annually review and submit all real estate and personal property taxes and all
assessments affecting the Hotel to Lessee (who shall provide copies thereof to
the Partnership) and shall recommend payment thereof or appeal therefrom.
Manager shall file all personal property tax returns for the Hotel.

         (s) Compliance with Law. Manager shall use all reasonable efforts to
comply with all laws, ordinances, regulations and requirements of any federal,
state, or municipal government that are applicable to the use and operation of
the Hotel, as well as with all orders and requirements of the local fire
department, of which Manager has knowledge; provided, however, that Lessee shall
have the right to contest by proper legal proceedings, the validity of any such
law, ordinance, rule, regulation, order, decision or requirement and may
postpone compliance therewith to the extent and in the manner provided by law
until final determination of any such proceedings. Manager promptly shall notify
Lessee in writing of all notices of legal requirements applicable to the Hotel
that are received by Manager.

         (t) Satisfaction of Obligations. Manager agrees to pay, when due, all
amounts due under any equipment leases and all other contracts and agreements
relating to the operation or maintenance of the Hotel, but solely from and to
the extent that funds are available in the Bank Account(s), and to comply with
all other covenants and obligations contained in the equipment leases and all
utility contracts, concession agreements, leases for retail or commercial space
and service and maintenance contracts, to the extent that compliance therewith
is within the reasonable control of Manager by reason of its management and
operation of the Hotel pursuant to this. Manager shall have no obligation to
perform or comply with any obligations of (i) the Partnership or Lessee under
the Percentage Lease or (ii) the Partnership under any Financing

                                      -7-
<PAGE>

Documents relating to the Partnership's Mortgagee (other than any right to
approve or inspect Capital Improvements contemplated by paragraph (g) above).

         (u) Requests for Information. Manager shall respond, with reasonable
promptness, to any information requests by Lessee's Mortgagee in accordance with
the Lessee's Financing Documents, to the extent such information is required to
be furnished by Manager to Lessee pursuant to this Agreement. Any additional
information or reports requested by Lessee's Mortgagee shall be provided by
Manager only if Lessee so directs Manager in writing and, to the extent such
information or reports are not being prepared for Lessee in the ordinary course
of business pursuant to this Agreement Lessee agrees to pay the reasonable
expenses of preparing such information and reports.

         (v) Discounts and Rebates. Lessee shall be credited with the full
amount of any discounts, rebates or commissions obtained by Manager in respect
of any purchases made by Manager for or on behalf of Lessee pursuant to this
Agreement.

         (w) Tax and Insurance Accruals. If requested by Lessee, Manager shall
accrue and set aside on a monthly basis Gross Revenues for the payment of real
estate taxes and insurance premiums, and such accruals shall be deposited in a
separate account and not commingled with other operating accounts for Hotel
operations generally. If and to the extent Lessee and Manager agree in writing,
the tax and insurance accruals on deposit may be used from time to time to pay
Operating Costs if Adjusted Gross Revenues are not otherwise sufficient to pay
such Operating Costs.

                                   ARTICLE IV
                              LESSEE'S OBLIGATIONS

         SECTION 4.01. LESSEE'S OBLIGATIONS. During the Term, Lessee shall have
the obligations set forth below:

         (a) License Agreement. Lessee shall comply with all the terms and
conditions of the License Agreement (specifically including, but not limited to,
Licensee's obligation to pay the fees, charges and contributions set forth in
paragraph 3.C of the License Agreement) and keep the License Agreement in full
force and effect from the Commencement Date through the remainder of the Term.
Nothing in this Agreement shall be interpreted in a manner which would relieve
Lessee of any of its obligations under the License Agreement.

         (b) Licenses and Permits. Lessee shall obtain and maintain (or shall
cause to be obtained and maintained), with Manager's assistance and cooperation,
all governmental permissions, licenses and permits required to be held in either
Lessee's or the Partnership's name that are necessary to enable Manager to
operate the Hotel in accordance with the terms of this Agreement and the License
Agreement.

         (c) Operating Funds. Lessee shall provide all funds necessary to enable
Manager to manage and operate the Hotel in accordance with the terms of this
Agreement and the License Agreement. Lessee agrees to deliver to Manager for
deposit into the Bank Account(s) on or

                                      -8-
<PAGE>

before the Commencement Date the amount specified on Exhibit "B," which amount
shall be the "Minimum Balance" to be maintained by Lessee in the Bank Account(s)
during each calendar year during the Term. The Minimum Balance shall serve as
working capital for the Hotel's operations. Commencing forty-five (45) days
after the date hereof and continuing on the first day of each calendar month
thereafter, Lessee shall deliver to Manager for deposit in a separate
interest-bearing account in Lessee's name but under the sole control of Manager
(the "Operating Deficit Account") an amount equal to the lesser of five thousand
dollars ($5,000) or the amount necessary to cause the funds in the Operating
Deficit Account plus the balance in the Bank Account(s) as of the last day of
the immediately preceding month to equal one hundred thousand dollars
($100,000), after taking into consideration pending or anticipated distributions
from the Operating Deficit Account to fund cash shortfalls in operations of the
Hotel. The Operating Deficit Account for the Hotel may be consolidated with the
Operating Deficit Account for the Other Hotels. Interest on funds in the
Operating Deficit Account shall be disbursed to Lessee monthly to the extent the
average balance in the account for any calendar month is equal to or greater
than one hundred thousand dollars ($100,000). At such time as any distributions
are made from the Operating Deficit Account, all Net Cash Flow (as hereinafter
defined) shall be deposited into the Operating Deficit Account until the amount
of Net Cash Flow deposited in such account equals the amount of such
distributions. The term "Net Cash Flow" shall have the same meaning as the term
"Income Before Lessee's Overhead," as such term is defined on Exhibit "C"
hereto, except there shall be no deduction for Percentage Lease Payments (other
than to account for amounts deposited into the Reserve Fund in accordance with
paragraph (d) below). Manager may use funds in the Operating Deficit Account
from time to time, without the prior written consent of Lessee or the
Partnership, to pay Operating Costs and, if requested by Lessee, Permitted Costs
(as hereinafter defined) to the extent funds in the Bank Account are not
sufficient to pay such Operating Costs and Permitted Costs. The term "Permitted
Costs" shall mean (i) Percentage Lease Payments (as defined on Exhibit "C"
hereto), (ii) premiums for insurance coverages specified on Exhibit "D" hereto
to the extent Lessee is responsible for paying for such coverages in the
Percentage Lease, (iii) lease payments under Qualifying Capital Leases (as
defined on Exhibit "C" hereto) and (iv) audit legal and other professional fees
incurred by Lessee and directly related to the operation of the Hotel. Within
thirty (30) days of Manager's written request Lessee agrees to furnish Manager
with sufficient funds to make up any deficiency in funds in the Bank Account(s)
and the Operating Deficit Account. Manager's request for sufficient funds may be
based on anticipated cash shortfalls shown on the cash flow projection delivered
to Lessee or incurred cash shortfalls. If Manager determines, in its good faith
business judgment that the amount of the Minimum Balance and the funds in the
Operating Deficit Account are insufficient to adequately meet the working
capital needs for the Hotel's operations, Manager shall notify Lessee and
attempt to reach agreement on an adjustment to the amount of the Minimum
Balance. In the event Lessee and Manager are unable to agree after a period of
thirty (30) days, Manager may submit such matter to arbitration pursuant to
Section 10.02 below. Lessee shall be responsible for providing funds to cover
any shortfall in working capital for the Hotel irrespective of whether such
shortfall is attributable in whole or in part to Partnership Costs.

         (d) Capital Funds. Lessee shall expend such amounts for renovation
programs, furnishings, equipment and ordinary Hotel capital replacement items as
are required from time to time to (i) maintain the Hotel in good order and
repair; (ii) comply with the standards referred to in the License Agreement and
(iii) comply with applicable governmental regulations and orders.

                                      -9-
<PAGE>

         It is recognized that expenditures for capital replacements are
incapable of precise calculation in advance. Therefore, there shall be paid over
in cash in each calendar month after the Commencement Date, four percent (4%)
of Suite Revenues (as hereinafter defined) into a Reserve Fund (as hereinafter
defined) to pay for capital replacements. The term "Suite Revenues" means all
revenue and income from the rental of guest suites at the Hotel with no
deductions except for sales and room taxes. Manager shall establish a reserve
for capital replacements on the books of account for the Hotel and the cash
amounts required for such reserve shall be placed into an interest-bearing
account (the "Reserve Fund") established in the Hotel's name at a bank chosen by
Lessee and reasonably acceptable to Manager, with Manager's designees being the
only authorized signatories on said account. The Reserve Fund for the Hotel may
be consolidated with the Reserve Funds for the Other Hotels. Any expenditures
for capital replacements during any calendar year which have been included in an
approved Capital Budget may be made without either the Partnership's or Lessee's
additional approval and shall be made by Manager from the Reserve Fund
(including accrued interest and unused accumulations from prior calendar years).
Any amounts remaining in the Reserve Fund at the close of each calendar year
shall be carried forward and retained in the Reserve Fund until fully used as
herein provided. To the extent the Reserve Fund is insufficient at a particular
time, or to the extent the Reserve Fund plus anticipated contributions for the
ensuing calendar year is less than budgeted expenditures for the ensuing
calendar year, then, in either such event Manager shall give Lessee written
notice thereof at least forty-five (45) days before the anticipated date such
funds will be needed. Lessee shall supply the necessary funds by deposit to the
Reserve Fund at least thirty (30) days before the anticipated date such funds
will be needed. All proceeds from the sale of capital items no longer needed for
the operation of the Hotel shall be deposited to the Reserve Fund. Sale of such
items shall be at the discretion of Manager, and conducted in a commercially
reasonable manner; Manager shall not dispose of any capital item or group of
capital items having a value in excess of ten thousand dollars ($10,000) without
Lessee's prior written consent unless the replacement of such capital item or
group of capital items has been contemplated in the applicable Capital Budget.
Upon termination of this Agreement for whatever reason, Manager's right to
expend any unused portion of the Reserve Fund shall terminate and the balance of
the fund shall be paid over to Lessee, less any sums then due Manager.

         To the extent any expenditure under this paragraph (d) shall exceed ten
thousand dollars ($10,000), Manager shall first solicit bids from at least three
different reputable and qualified third parties, and the lowest of the bidders
shall be selected unless acceptance of a higher bid has been approved by Lessee
in writing.

         (e) Payments to Manager. Lessee shall promptly pay to Manager all
amounts due Manager under this Agreement.

         (f) Lessee's Representative. Lessee shall appoint two or more
representatives to represent Lessee in all matters relating to this Agreement
and/or the Hotel ("Lessee's Representatives"). Lessee's initial Lessee's
Representatives shall be the individuals named on Exhibit "B." Manager shall
have the right to deal solely with the Lessee's Representatives on all such
matters. Manager may rely upon statements and representations of any one of
Lessee's Representatives (without the joinder of the others) as being from and
binding upon Lessee. Lessee may change one or more of its Lessee's
Representatives from time to time by providing

                                      -10-
<PAGE>

written notice to Manager in the manner provided for herein. Lessee shall cause
one or more of Lessee's Representatives or designated substitutes to attend all
Quarterly Lessee's Meetings.

         (g) Lessee's Right of Inspection and Review. Lessee, Partnership's
Mortgagee and their respective accountants, attorneys, agents and other
representatives and invitees, shall have the right to enter upon any part of the
Hotel at all reasonable times during normal business hours and during the term
of this Agreement upon reasonable prior notice to Manager for the purpose of
examining, repairing or inspecting the same, preventing damage to the Hotel,
showing the Hotel to prospective purchasers or mortgagees, or auditing,
examining or making extracts of books and records of the Hotel, or for any other
purpose which Lessee, in its reasonable discretion, shall deem necessary or
advisable, but the same shall be done with as little disruption to the business
of the Hotel as under the circumstances is reasonable. Books and records of the
Hotel shall be kept at Manager's office in Memphis, Tennessee or such other
place as the Lessee may hereafter in writing agree. Lessee's rights of
examination and audit of the books and records of the Hotel are subject to the
provisions of Section 3.01 (k) above.

         (h) Quiet and Peaceable Operation. Lessee agrees that Manager shall be
entitled to peaceably and quietly possess and operate the Hotel in accordance
with the terms of this Agreement free from molestation, eviction and disturbance
by Lessee or by any other person or persons claiming by, through or under
Lessee.

                                    ARTICLE V
                                 MANAGEMENT FEE

         SECTION 5.01. MANAGEMENT FEE. Lessee authorizes Manager to pay itself
from the Bank Account the Basic Management Fees and Incentive Management Fees
(hereinafter collectively referred to as the "Management Fees") calculated and
payable in the manner set forth on Exhibit "C."

                                   ARTICLE VI
                              CLAIMS AND LIABILITY

         SECTION 6.01. CLAIMS AND LIABILITY. Lessee and Manager mutually agree
for the benefit of each other to look only to the appropriate insurance
coverages in effect pursuant to this Agreement in the event any demand, claim,
action, damage, loss, liability or expense occurs as a result of injury to
person or damage to property, regardless whether any such demand, claim, action,
damage, loss, liability or expense is caused or contributed to by or results
from the negligence of Lessee or Manager or their respective subsidiaries,
affiliates, employees, directors, officers, agents or independent contractors
and regardless whether the injury to person or damage to property occurs in and
about the Hotel or elsewhere as a result of the performance of this Agreement.
Nevertheless, in the event the insurance proceeds are insufficient or there is
no insurance coverage to satisfy the demand, claim, action, loss, liability or
expense and the same did not arise out of a breach of this Agreement by Manager
or the gross negligence or willful misconduct of Manager, Lessee agrees, at its
expense, to indemnify and hold Manager and its subsidiaries, affiliates,
officers, directors, employees, agents and independent contractors harmless

                                      -11-
<PAGE>

to the extent of the excess liability. For purposes of this Section, any
deductible amount under any policy of insurance shall not be deemed to be
included as part of collectible insurance proceeds. Notwithstanding anything
contained in this Agreement to the contrary (including without limitation the
preceding provisions of this Section 6.01 and Sections 3.01(b) and 11 .08),
Manager shall indemnify, defend and hold harmless Lessee and Lessee's
subsidiaries, affiliates, officers, directors, employees, agents, partners,
shareholders or independent contractors, from all demands, claims, actions,
loss, liability or expense which is not covered by insurance and which is
determined to have resulted from the gross negligence, willful misconduct or
breach of this Agreement by Manager and its agents or employees in connection
with the operation of the Hotel.

         SECTION 6.02. SURVIVAL. The provisions of this Article VI shall survive
any cancellation, termination or expiration of this Agreement and shall remain
in full force and effect until such time as the applicable statute of limitation
shall cut off all demands, claims, actions, damages, losses, liabilities or
expenses which are the subject of the provisions of this Article VI.

                                   ARTICLE VII
                         CLOSURE, EMERGENCIES AND DELAYS

         SECTION 7.01. EVENTS OF FORCE MAJEURE. If at any time during the Term
of this Agreement it becomes necessary, in Manager's opinion, to cease operation
of the Hotel in order to protect the Hotel and/or the health, safety and welfare
of the guests and/or employees of the Hotel for reasons beyond the reasonable
control of Manager, such as, but not limited to, acts of war, insurrection,
civil strife and commotion, labor unrest governmental regulations and orders,
shortage or lack of adequate supplies or lack of skilled or unskilled employees,
contagious illness, catastrophic events or acts of God ("Force Majeure"), then
in any such event or similar events Manager may close and cease operation of all
or any part of the Hotel, reopening and commencing operation when Manager deems
that such may be done without jeopardy to the Hotel, its guests and employees.

         Manager and Lessee agree, except as otherwise provided herein, that the
time within which a party is required to perform an obligation hereunder shall
be extended for a period of time equivalent to the period of delay caused by an
event of Force Majeure, but only to the extent that delay is caused or
contributed to by a specific event of Force Majeure.

         SECTION 7.02. EMERGENCIES. If an emergency condition should exist which
requires that immediate repairs be made for the preservation and protection of
the Hotel, its guests or employees, or to assure the continued operation of the
Hotel (for purposes of this Section, an emergency condition shall include any
situation or circumstance that is reasonably estimated to require corrective
action within a period of seventy-two (72) hours or less), Manager is authorized
to take all actions and to make all expenditures necessary to repair and correct
such condition, regardless whether provisions have been made in the applicable
budget for such emergency expenditures. Expenditures made by Manager in
connection with an emergency shall be paid, in Manager's sole discretion, out of
the Bank Account(s) to the extent funds are available and, if not from the
Operating Deficit Account and/or the Reserve Fund. Lessee shall, to the extent
required to meet current obligations, immediately replenish such funds. Manager
shall

                                      -12-
<PAGE>

endeavor to communicate with Lessee prior to making any expenditures to correct
an emergency condition, but in any event shall promptly notify Lessee after the
emergency expenditures have been made.

                                  ARTICLE VIII
                            CONDEMNATION AND CASUALTY

         SECTION 8.01. CONDEMNATION. If the Hotel is taken in any eminent
domain, expropriation, condemnation, compulsory acquisition or similar
proceeding by any competent authority, this Agreement shall automatically
terminate as of the date of taking or condemnation. Any compensation for the
taking or condemnation of the physical facility comprising the Hotel shall be
paid to Lessee and Lessee and the Partnership shall share such award in
accordance with the terms of the Percentage Lease. Manager, however, with the
full cooperation of Lessee, shall have the right to file a claim with the
appropriate authorities for the loss of Management Fee income for the remainder
of the Term and any extension thereof because of the condemnation or taking. If
only a portion of the Hotel is so taken and the taking does not make it
unreasonable or imprudent in the reasonable opinion of Lessee and Manager, to
operate the remainder as a hotel of the type and class immediately preceding
such taking, this Agreement shall not terminate. Any compensation shall be used,
however, in whole or in part, to render the Hotel a complete and satisfactory
architectural unit as a hotel of the same type and class as it was immediately
preceding such taking or condemnation.

         SECTION 8.02. CASUALTY. In the event of a fire or other casualty,
Lessee shall comply with the terms of the License Agreement and this Agreement
shall remain in full force and effect so long as the License Agreement remains
in full force and effect.

                                   ARTICLE IX
                           DEFAULT; TERMINATION RIGHTS

         SECTION 9.01. LESSEE'S DEFAULT. The following shall, at the election of
Manager, constitute events of default by Lessee under this Agreement (each such
event being referred to herein as a "Lessee's Default"):

                  (a) The failure of Lessee to pay any amount to Manager
         provided for herein for a period of ten (10) days after written notice
         by Manager of such failure to pay.

                  (b) Failure of Lessee to keep or perform any duty, obligation,
         covenant or agreement of Lessee under this Agreement (other than the
         obligation to pay that is the subject of paragraph (a) above) and such
         failure continues for a period of thirty (30) days after receipt of
         written notice thereof from Manager; provided, however, if such failure
         cannot reasonably be remedied or corrected within such 30-day period,
         then such 30-day period shall be extended for such additional period as
         may be reasonably required to cure such default but only if the Lessee
         promptly commences to cure such default and continue thereafter with
         all due diligence to complete such a cure to the satisfaction of
         Manager.

                                      -13-
<PAGE>

                  (c) The occurrence of a default by Lessee under any of the
         Other Management Agreements, after taking into consideration applicable
         notice, grace and cure periods.

                  (d) The occurrence of a default by the holder of the License
         under, or termination of the License Agreement or any of the Other
         License Agreements, after taking into consideration applicable notice,
         grace and cure periods, if any.

                  (e) The occurrence of a default under or other termination of
         the Percentage Lease.

                  (f) Lessee or the Partnership is voluntarily or involuntarily
         dissolved or declared bankrupt, insolvent or commits an act of
         bankruptcy or enters into liquidation whether compulsory or voluntary,
         other than for the purpose of amalgamation or reconstruction, or
         compounds with its creditors, or has a receiver appointed over all or
         any part of its assets, or conveys title in lieu of foreclosure.

                  (g) A "Change in Ownership", as defined in the License
         Agreement occurs unless the new owner of the Hotel receives a
         Commitment Agreement (as defined in Section 9.05 below) and enters into
         an assumption agreement in accordance with Section 9.05 below.

                  (h) Failure of the Partnership to keep or perform any duty,
         obligation, covenant or agreement of the Partnership under any of the
         "Comfort Letters" from Manager to the Partnership agreed to and
         accepted by the Partnership (collectively, the "Comfort Letters")
         relating to the Hotel and each of the Other Hotels and such failure
         continues for a period of thirty (30) days after receipt of written
         notice thereof from Manager; provided, however, if such failure cannot
         reasonably be remedied or corrected within such 30-day period, then
         such 30-day period shall be extended for such additional period as may
         be reasonably required to cure such default, but only if the
         Partnership promptly commences to cure such default and continue
         thereafter with all due diligence to complete such a cure to the
         satisfaction of Manager.

         On the occurrence of any Lessee's Default Manager shall have the right
to terminate this Agreement by written notice to Lessee, in addition to its
rights to seek damages or other remedies available to it at law or in equity.

         SECTION 9.02. MANAGER DEFAULT. The following shall, at the election of
Lessee, constitute events of default by Manager under this Agreement (each such
event being referred to herein as a "Manager Default"):

                  (a) Failure of Manager to keep or perform any duty,
         obligation, covenant or agreement of Manager under this Agreement and
         such failure shall continue for a period of thirty (30) days after
         receipt of written notice thereof from Lessee; provided, however, if
         such failure cannot reasonably be remedied or corrected within such
         30-day period, then such 30-day period shall be extended for such
         additional period as may be reasonably required to cure such default
         provided that Manager promptly commences to

                                      -14-
<PAGE>

         cure such default and continues thereafter with all due diligence to
         complete such cure to the satisfaction of Lessee.

                  (b) The occurrence of a default by Manager under the License
         Agreement or any of the Other License Agreements, after taking into
         consideration applicable notice, grace and cure periods, if any.

                  (c) If Manager is voluntarily or involuntarily dissolved or
         declared bankrupt, insolvent or commits an act of bankruptcy, or enters
         into liquidation, whether compulsory or voluntary, other than for the
         purpose of amalgamation or reconstruction, or compounds with its
         creditors, or has a receiver appointed over all or any part of its
         assets.

Upon the occurrence of a Manager Default Lessee shall have the right to
terminate this Agreement by written notice to Manager, in addition to its right
to seek damages or other remedies available to it at law or in equity.

         SECTION 9.03. [Intentionally deleted.]

         SECTION 9.04. DELAYS. Notwithstanding any other provision of this
Agreement, if any event of the type described in Article VII or Article VIII
occurs and Manager is unable to operate any portion of the Hotel for a period of
ninety (90) days, Manager shall have the option to terminate this Agreement upon
thirty (30) days' prior written notice to Lessee, without liability on the part
of Manager, its parent or their subsidiaries or affiliates.

         SECTION 9.05. MANAGER'S RIGHT TO TERMINATE UPON SALE. If there is to be
a "Change in Ownership" as defined in the License Agreement and the new owner of
the Hotel has not received a Commitment Agreement to Issue an Embassy Suites
License Agreement for the operation of the Hotel (for purposes of this Section
9.05, said agreement shall be referred to as the "Commitment Agreement"),
Manager shall have the right upon giving notice to Lessee to terminate this
Agreement on the effective date the Change of Ownership occurs. In the event the
new owner applies for a Commitment Agreement Manager, acting in its capacity as
licensor of the Embassy Suites system of hotels, agrees to review and consider
such application in good faith in accordance with its standard procedures and
criteria. If there is a Change of Ownership and the new owner of the Hotel
receives a Commitment Agreement but does not enter into an assumption agreement
pursuant to which the new owner assumes all of Lessee's obligations hereunder
with Manager prior to the date the Change of Ownership occurs, Manager shall
have the right, upon giving notice to Lessee, to terminate this Agreement on the
effective date the Change of Ownership occurs.

         SECTION 9.06. LESSEE'S SPECIAL RIGHTS OF TERMINATION. During the Term,
Lessee shall have the right to terminate this Agreement upon the occurrence of
any of the following events:

         (a) Sale of Hotel. The Partnership's fee estate in the Hotel is sold
and transferred to an unaffiliated third party and in connection with such
transaction the Percentage Lease is terminated and neither Lessee, nor any of
the Principals (as hereinafter defined) nor any person

                                      -15-
<PAGE>

or entity affiliated with the Principals retains any economic or beneficial
interest in the transferee or the Hotel. The term "Principals" means any of
Thomas J. Corcoran, Jr. or Hervey A. Feldman.

         (b) Failure to Meet Performance Test. Manager fails to satisfy the
requirements of the "performance test" described in Paragraph A of the Section
entitled "Performance Test; Termination Rights" on Exhibit "B" hereto;

         (c) Change in Control. There is a "Change in Control" (as hereinafter
defined) of Manager and Manager fails to satisfy the requirements of the
"performance test" described in Paragraph B of the Section entitled "Performance
Test Termination Rights" on Exhibit "B" hereto. The term "Change in Control"
shall mean any sale or transfer of a majority of the stock of Manager under
circumstances in which ___________________________________ relinquishes direct
or indirect control over the day-to-day operations and business of Manager. If
there is a transfer of a majority of the stock of Manager and Lessee contends
that a Change in Control of Manager has occurred that is disputed by Manager,
then Manager shall demonstrate to the reasonable satisfaction of Lessee that
Promus has retained the ability to control, directly or indirectly, the
day-to-day operations and business of Manager.

         SECTION 9.07. TRANSITION UPON TERMINATION. Upon any termination of this
Agreement, all fees and payments due to Manager as of the effective date of
termination, including all accrued and unpaid fees and reimbursable charges and
expenses, shall be paid to Manager within ten (10) days after delivery to Lessee
of an itemized statement of such fees and payments, and Manager shall be
entitled to exercise the right of set-off provided in Section 11.16 below with
respect to such fees, charges and expenses. Manager shall deliver to Lessee, or
such other person or persons as Lessee may designate, copies of all books and
records of the Hotel and all funds in the possession of Manager belonging to
Lessee or received by Manager pursuant to the terms of this Agreement, and shall
assign, transfer or convey to such person or persons all service contracts and
personal property relating to or used in the operation and maintenance of the
Hotel, except any personal property which is owned by Manager. Manager, at its
cost and expense, shall remove all signs that it may have placed at the Hotel
indicating that it is the manager of same and replace and restore any damage
resulting therefrom. Manager shall also, for a period of thirty (30) days after
such expiration or termination, make itself available to consult with and advise
Lessee or such other person or persons regarding the operation and maintenance
of the Hotel at a consultation fee to be agreed upon between Manager and Lessee.

                                    ARTICLE X
                         APPLICABLE LAW AND ARBITRATION

         SECTION 10.01. APPLICABLE LAW. The interpretation, validity and
performance of this Agreement shall be governed by the procedural and
substantive laws of the State of Tennessee. If any judicial authority holds or
declares that the law of another jurisdiction is applicable, this Agreement
shall remain enforceable under the laws of that jurisdiction.

                                      -16-
<PAGE>

         SECTION 10.02. ARBITRATION OF FINANCIAL MAILERS

                  SUBSECTION 10.02.1. MAILERS TO BE SUBMITTED TO ARBITRATION. In
the case of a dispute with respect to any of the following matters, either party
may submit such matter to arbitration which shall be conducted by the
Accountants (as hereinafter defined in Subsection 10.02.2):

         (a) computation of the Management Fees;

         (b) reimbursements due to Manager under the provisions of Sections
11.14 and 11.16

         (c) any adjustment in the Minimum Balance under the provisions of
Section 4.01 (c)

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

         (e) any dispute concerning the approval of an Operating Budget.

         All disputes concerning the above matters shall be submitted to the
Accountants. The decision of the Accountants with respect to any matters
submitted to them under this Subsection 10.02.1 shall be binding on both parties
hereto.

                  SUBSECTION 10.02.2. THE ACCOUNTANTS. The "Accountants" shall
be one of the so-called "Big Six" firms of certified public accountants,
represented by a partner or manager-level employee who has personal experience
with the hotel industry and hotel operations. Lessee (on behalf of itself and
the Partnership) and Manager may select any one of such public accounting firms,
notwithstanding any existing relationships which may exist between Owners or
Manager and such accounting firm. The party desiring to submit any matter to
arbitration under Subsection 10.02.1 shall do so by written notice to the other
party, which notice shall set forth the items to be arbitrated and such party's
choice of an accounting firm. The party receiving such notice shall within
fifteen (15) days after receipt of such notice either approve such notice, or
designate one of the remaining firms by written notice back to the first party,
and the first party shall within fifteen (15) days after receipt of such notice
either approve such choice or disapprove the same. If both parties shall have
approved one of the firms under the preceding sentence, then such firm shall be
the "Accountants" for the purposes of arbitrating the dispute. If the parties
are unable to agree on an accounting firm, then the accounting firm selected by
each party shall represent the respective parties and the two firms so selected
shall select a third firm, and the three firms so selected shall be the
"Accountants" for such purpose. The Accountants shall be required to render a
decision in accordance with the procedures described in Subsection 10.02.3
within fifteen (15) days after being notified of their selection. The fees and
expenses of the Accountants will be paid by the non-prevailing party.

                  SUBSECTION 10.02.3. PROCEDURES. In all arbitration proceedings
submitted to the Accountants, the Accountants (either the mutually agreed upon
firm acting alone or two of the three firms selected to constitute a panel)
shall be required to agree upon and approve in writing the substantive position
advocated by Lessee or Manager with respect to each disputed item.

                                      -17-
<PAGE>

Any decision rendered by the Accountants that does not reflect the position
advocated by Lessee or Manager shall be beyond the scope of authority granted to
the Accountants and, consequently, may be overturned by either party. All
proceedings by the Accountants shall be conducted in accordance with the Uniform
Arbitration Act, except to the extent the provisions of such act are modified by
this Agreement or by the mutual agreement of the parties. Unless Lessee and
Manager agree otherwise, all arbitration proceedings shall be conducted at the
Hotel.

         SECTION 10.03. PERFORMANCE DURING DISPUTES. It is mutually agreed that
during any kind of bona fide, good faith controversy, claim, disagreement or
dispute, including a dispute as to the validity of this Agreement Manager shall
remain in possession of the Hotel as Manager, and Lessee and Manager shall
continue their performance of the provisions of this Agreement and its exhibits.

                                   ARTICLE XI
                               GENERAL PROVISIONS

         SECTION 11.01. AUTHORIZATION. Lessee and Manager represent and warrant
to each other that their respective companies have full power and authority to
execute this Agreement and to be bound by and perform the terms hereof. On
request, each party shall furnish the other evidence of such authority.

         SECTION 11.02. RELATIONSHIP. Manager and Lessee shall not be construed
as joint venturers or partners of each other by reason of this Agreement and
neither shall have the power to bind or obligate the other except as set forth
in this Agreement.

         SECTION 11.03. MANAGER'S CONTRACTUAL AUTHORITY IN THE PERFORMANCE OF
THIS AGREEMENT. Manager is authorized to make, enter into and perform, in the
name of and for the account of Lessee, any contracts deemed necessary by Manager
to perform its obligations under this Agreement. In exercising its authority
hereunder, Manager shall be entitled to execute and enter into contracts without
the specific approval of Lessee so long as each such contract (i) requires
expenditures or otherwise establishes liability of twenty-five thousand dollars
($25,000) or less and (ii) has a term (excluding options in favor of Manager and
Lessee to renew) of one (1) year or less or can be canceled without penalty upon
sixty (60) days' notice or less. Any contract that does not satisfy the
conditions set forth in the preceding sentence shall require the prior approval
in each instance of Lessee, regardless whether such expenditure is authorized in
an applicable budget, unless the form of the contract proposed to be entered
into has been approved in advance by Lessee. Lessee agrees to promptly respond
to any request for approval and further agrees that its consent shall not be
unreasonably withheld or delayed. Manager shall be authorized to enter into
contracts with affiliates of Manager, but only so long as Lessee shall have
approved in advance the cost of the service or product to be provided.

         SECTION 11.04. FURTHER ACTIONS. Lessee and Manager agree to execute all
contracts, agreements and documents and to take all actions reasonably necessary
to comply with the provisions of this Agreement and the intent hereof.

                                      -18-
<PAGE>

         SECTION 11.05. SUCCESSORS AND ASSIGNS. Lessee's consent shall not be
required for Manager to assign any of its rights, interests or obligations as
Manager hereunder to any parent, subsidiary or affiliate of Manager or ______ or
its successor corporation, provided that any such assignee agrees to be bound by
the terms and conditions of this Agreement and provided further that such
assignee has received assignment of all or substantially all of the management
agreements entered into by Manager with respect to other Embassy Suites hotels
in the Embassy Suites system of hotels. Subject to the provisions of Section
9.06(c) above, the acquisition of Manager or its parent company by a third party
shall not constitute an assignment of this Agreement by Manager and this
Agreement shall remain in full force and effect between Lessee and Manager.
Except as herein provided, Manager shall not assign any of its obligations
hereunder without the prior written consent of Lessee, which consent shall not
be unreasonably withheld or delayed. Lessee shall be deemed to have consented to
such an assignment of this Agreement if Lessee has not notified Manager in
writing to the contrary within fifteen (15) days after Lessee has received
Manager's request for Lessee's consent to an assignment. Manager shall have the
right to pledge or assign its right to receive the Management Fees hereunder
without the prior written consent of Lessee. The Partnership shall not have the
right to consent to any assignment that otherwise complies with the requirements
of this Section 11.05.

         Lessee shall have the right to assign this Agreement to any person or
entity which has obtained (i) a leasehold estate in the Hotel in accordance with
the provisions of the Comfort Letter relating to the Hotel and (ii) an Embassy
Suites Commitment Agreement or License Agreement for the Hotel. Except as
hereinabove provided, Lessee shall not have the right to assign this Agreement
without the prior written consent of Manager, which consent shall not be
unreasonably withheld or delayed.

         SECTION 11.06. NOTICES. All notices or other communications provided
for in this Agreement shall be in writing and shall be either hand delivered,
delivered by certified mail, postage prepaid, return-receipt requested,
delivered by an overnight delivery service, or delivered by facsimile machine
(with an executed original sent the same day by an overnight delivery service),
addressed as set forth on Exhibit "B." Notices shall be deemed delivered on the
date that is four (4) calendar days after the notice is deposited in the U.S.
mail (not counting the mailing date) if sent by certified mail, or, if hand
delivered, on the date the hand delivery is made, or, if delivered by facsimile
machine, on the date the transmission is made. If given by an overnight delivery
service, the notice shall be deemed delivered on the next business day following
the date that the notice is deposited with the overnight delivery service. The
addresses provided on Exhibit "B" may be changed by any party by notice given in
the manner provided herein.

         SECTION 11.07. DOCUMENTS. Lessee shall furnish Manager copies of all
leases, title documents, property tax receipts and bills, insurance statements,
all financing documents (including notes and mortgages) relating to the Hotel
and such other documents pertaining to the Hotel as Manager shall request.

         SECTION 11.08. DEFENSE. Manager shall defend and/or settle any claim or
legal action brought against Manager or Lessee, individually, jointly or
severally, in connection with the operation of the Hotel. Manager or the
applicable insurance carrier shall retain legal counsel and Manager shall
supervise legal counsel, accountants and such other professionals, consultants

                                      -19-
<PAGE>

and specialists as Manager deems appropriate to defend and/or settle any such
claim or cause of action. Lessee shall have the right to actively participate in
the defense of any such claim or cause of action in which Lessee is a named
defendant. Manager shall confer with Lessee concerning any settlement proposal
that Manager is considering accepting, regardless whether Lessee is a named
party, but Lessee's approval shall not be required if Lessee is not a named
party and the settlement is covered by insurance. Lessee's approval shall be
required with respect to any proposed settlement of any claim or cause of action
in which Lessee is a named party or that is not covered by insurance (excluding
any deductible amount specified in the applicable policy of insurance). All
liabilities, costs, and expenses, including attorneys' fees and disbursements,
incurred in defending and/or settling any such claim or legal action which are
not covered by insurance shall be an expense of Lessee or Manager as applicable
under the provisions of Section 6.01.

         SECTION 11.09. WAIVERS. No failure or delay by Manager or Lessee to
insist upon the strict performance of any covenant, agreement, term or condition
of this Agreement, or to exercise any right or remedy consequent upon the breach
thereof, shall constitute a waiver of any such breach or any subsequent breach
of such covenant, agreement, term or condition. No covenant, agreement, term, or
condition of this Agreement and no breach thereof shall be waived, altered or
modified except by written instrument. No waiver of any breach shall affect or
alter this Agreement, but each and every covenant, agreement, term and condition
of this Agreement shall continue in full force and effect with respect to any
other then existing or subsequent breach thereof.

         SECTION 11.10. CHANGES. Any change to or modification of this Agreement
including, without limitation, any change in the application of this Agreement
to the Hotel, must be evidenced by a written document signed by both parties
hereto.

         SECTION 11.11. CAPTIONS. The captions for each Article and Section are
intended for convenience only.

         SECTION 11.12. SEVERABILITY. If any of the terms and provisions hereof
shall be held invalid or unenforceable, such invalidity or unenforceability
shall not affect any of the other terms or provisions hereof. If, however, any
material part of a party's rights under this Agreement shall be declared invalid
or unenforceable (specifically including Manager's right to receive its
Management Fees) the party whose rights have been declared invalid or
unenforceable shall have the option to terminate this Agreement upon thirty (30)
days' written notice to the other party, without liability on the part of the
terminating party.

         SECTION 11.13. INTEREST. Any amount payable to Manager or Lessee by the
other which has not been paid when due shall accrue interest at the lesser of
(i) the highest legal limit in the state in which the Hotel is located or (ii)
two percentage points (2%) over the published base rate of interest charged by
Citibank, N.A., New York, New York, to borrowers on ninety (90) day unsecured
commercial loans, as the same may be changed from time to time.

         SECTION 11.14. REIMBURSEMENT. The performance by Manager of its
responsibilities under this Agreement are conditioned upon Lessee providing
sufficient funds to Manager on a timely basis to enable Manager to perform its
obligations hereunder. Nevertheless, Manager shall be

                                      -20-
<PAGE>

entitled, at its option, after first providing not less than ten (10) days'
prior written notice to Lessee specifying the obligations to be satisfied and
the amount of money to be advanced, to advance funds or contribute property on
behalf of the Lessee to satisfy obligations of Lessee in connection with the
Hotel and this Agreement; provided, however, Manager shall not be required to
give prior written notice to advance funds for the purpose of paying
compensation for Hotel Personnel within the Operating Budget or to remedy an
emergency. Manager shall keep appropriate records to document all reimbursable
expenses paid by Manager, which records shall be made available for inspection
by Lessee or its agents upon request. Lessee agrees to reimburse Manager with
interest upon demand for money paid or property contributed by Manager to
satisfy obligations of Lessee in connection with the Hotel and this Agreement.
Interest shall be calculated at the rate set forth in Section 11.13 from the
date Lessee was obligated to remit the funds or contribute the property for the
satisfaction of such obligation to the date reimbursement is made.

         SECTION 11.15. AGREEMENT NOT AN INTEREST IN REAL PROPERTY. This
Agreement is not and shall not be deemed at any time to be or to create, an
interest in real estate or a lien or other encumbrance of any kind whatsoever
against the Hotel or the land on which it is erected.

         SECTION 11.16. SET OFF. Without prejudice to Manager's rights to
terminate this Agreement pursuant to the provisions of this Agreement, Manager
may at any time following an Owners Default and without notice to Lessee, set
off or transfer any sum or sums held by Manager or other member of Promus to the
order of or on behalf of Owners (or either of them) or standing to the credit of
Lessee or the Partnership, as the case may be, in the Bank Account(s) and the
Operating Deficit Account, as the case may be, in or towards the satisfaction of
any of Owners' liabilities to Manager in respect of all sums due to Manager
under the terms of this Agreement or any of the Other Management Agreements. If
this Agreement is terminated for any reason, Manager may create a reserve from
any funds in the Bank Account(s), the Operating Deficit Account, the Reserve
Fund or otherwise held by Manager for or on behalf of, or as agent for, Owners
(or either of them) to pay sums owed to Manager as they become due.

         SECTION 11.17. THIRD PARTY BENEFICIARY. This Agreement is exclusively
for the benefit of Manager and Lessee and it may not be enforced by any party
other than such parties and shall not give rise to liability to any third party
other than the authorized successors and assigns of such parties.

         SECTION 11.18. BROKERAGE. Manager and Lessee represent and warrant to
each other that neither has sought the services of a broker, finder or agent in
this transaction, and neither has employed nor authorized any other person to
act in such capacity. Manager and Lessee each hereby agrees to indemnify and
hold the other harmless from and against any and all claims, loss, liability,
damage or expenses (including reasonable attorneys' fees) suffered or incurred
by the other party as a result of a claim brought by a person or entity engaged
or claiming to be engaged as a finder, broker or agent by the indemnifying
party.

         SECTION 11.19. SURVIVAL OF COVENANTS. Any covenant, term or provision
of this Agreement which, in order to be effective, must survive the termination
of this Agreement, shall survive any such termination.

                                      -21-
<PAGE>

         SECTION 11.20. ESTOPPEL CERTIFICATE. Manager and Lessee agree to
furnish to the other party and to the Partnership Mortgagee, from time to time
upon request, an estoppel certificate in such reasonable form as the requesting
party may request stating whether there have been any defaults under this
Agreement known to the party furnishing the estoppel certificate and such other
information relating to the Hotel as may be reasonably requested.

         SECTION 11.21. OTHER AGREEMENTS. Except to the extent as may now or
hereafter be specifically provided, nothing contained in this Agreement shall be
deemed to modify any other agreement between either Owner and Manager with
respect to the Hotel or any other property.

         SECTION 11.22. PERIODS OF TIME. Whenever any determination is to be
made or action is to be taken on a date specified in this Agreement, if such
date shall fall on a Saturday, Sunday or legal holiday under the laws of the
state of Tennessee and/or the state in which the Hotel is located, then in such
event said date shall be extended to the next day which is not a Saturday,
Sunday or legal holiday.

         SECTION 11.23. PREPARATION OF AGREEMENT. This Agreement shall not be
construed more strongly against either party regardless of who is responsible
for its preparation.

         SECTION 11.24. EXHIBITS. All exhibits attached hereto are incorporated
herein by reference and made a part hereof as if fully rewritten or reproduced
herein.

         SECTION 11.25. COUNTERPARTS. This Agreement may be executed in two (2)
or more counterparts, each of which shall be deemed an original.

         SECTION 11.26. ATTORNEYS' FEES AND OTHER COST. The parties to this
Agreement shall bear their own attorneys' fees in relation to negotiating and
drafting this Agreement. Should Lessee or Manager engage in litigation to
enforce their respective rights pursuant to this Agreement, the prevailing party
shall have the right to indemnity by the non-prevailing party for an amount
equal to the prevailing party's reasonable attorneys' fees, court costs and
expenses arising therefrom.

         SECTION 11.27. ENTIRE AGREEMENT. This Agreement contains the entire
agreement between Lessee and Manager regarding the management of the Hotel.

         The parties have respectively caused this Agreement to be executed as
of the date set forth in the introductory paragraph above.

                            LESSEE:

                            ----------------------------------------

                            ----------------------------------------

                            ----------------------------------------

                            ----------------------------------------

                                      -22-
<PAGE>

                                MANAGER:

                                -----------------------------------

                                -----------------------------------

                                By: /s/
                                   --------------------------------
                                     Its:

                                      -23-
<PAGE>

                                   EXHIBIT "A"
                               LICENSE AGREEMENT

                                    Attached.

                                      A-1
<PAGE>
                           [EMBASSY SUITES LETTERHEAD]

                                EMBASSY SUITES(R)
                                LICENSE AGREEMENT

Dated _______________________ between _________________________________
___________ ("Licensor"), and _________________________________________
_________________ ("Licensee"), whose address is c/o FelCor Suite Hotels, Inc.,
545 E. John Carpenter Freeway, Suite 1300, Irving, Texas 75062-3933.

                          THE PARTIES AGREE AS FOLLOWS:

1.       THE LICENSE.

         Licensor owns, operates and licenses a system designed to provide a
         distinctive, high quality hotel service to the pubic under the name
         "Embassy Suites" (the "System"). High standards established by Licensor
         are the essence of the System. Future investments may be required of
         Licensee under this License Agreement ("Agreement"). Licensee has
         independently investigated the risks of the business to be operated
         hereunder, including current and potential market conditions,
         competitive factors and risks, has read Licensor's "Franchise Offering
         Circular," and has made an independent evaluation of all such facts.
         Aware of the relevant facts, Licensee desires to enter into this
         Agreement in order to obtain a license to use the System in the
         operation of an Embassy Suites hotel located at 2727 Stemmons Freeway,
         Dallas, Texas 75207 (the "Hotel").

         a.       THE HOTEL. The Hotel comprises all structures, facilities,
                  appurtenances, furniture, fixtures, equipment, and entry,
                  exit, parking and other areas from time to time located on the
                  site approved for the Hotel and acknowledged by Licensor in
                  anticipation of the execution of this Agreement, or located on
                  any land from time to time approved by Licensor for additions,
                  signs or other facilities. No change in the number of approved
                  guest suites ("Guest Suites") reflected on Attachment B (the
                  "Rider") and no other significant change in the Hotel may be
                  made without Licensor's prior approval. Redecoration and minor
                  structural changes that comply with Licensor's standards and
                  specifications will not be considered significant. Licensee
                  represents that it is entitled to possession of the Hotel
                  during the entire License Term without restrictions that would
                  interfere with anything contemplated in this Agreement.

         b.       THE SYSTEM. The System is composed of elements, as designated
                  from time to time by Licensor, designed to identify "Embassy
                  Suites hotels" to the consuming public and/or to contribute to
                  such identification and its association with quality
                  standards. The System at present includes the service marks
                  "Embassy Suites" and such other service marks and such
                  copyrights, trademarks and similar property rights as may be
                  designated from time to time by Licensor to be part of the
                  System; access to a reservation service; distribution of
                  advertising, publicity and other marketing programs and
                  materials; the furnishing of training programs and materials,
                  standards, specifications and policies for construction,
                  furnishing, operation, appearance and service of the Hotel,
                  and other requirements as stated or referred to in this
                  Agreement and from time to time in the Manual (as defined
                  herein) or in other communications to Licensee; and programs
                  for inspecting the Hotel and consulting with Licensee.
                  Licensor may add elements to the System or modify, after or
                  delete elements of the System at its sole discretion from time
                  to time. Licensee is only authorized to use "Embassy Suites"
                  service marks and trademarks at or in connection with the
                  Hotel.

         c.       THE MANUAL. Licensee acknowledges the receipt of a current
                  Embassy Suites Standards Manual ("Manual"). The Manual
                  contains, among other matters, minimum standards and
                  requirements for constructing, equipping, furnishing,
                  supplying, operating, maintaining and marketing the Hotel.
                  Licensor

                                       1
<PAGE>

                  shall have the right to change the Manual from time to time
                  and Licensee agrees to abide by the Manual as changed. The
                  Manual shall at all times remain the sole property of
                  Licensor. Licensee shall use all reasonable efforts to
                  maintain the confidentiality of the Manual. Licensee shall
                  not make or distribute copies of the Manual or any portion
                  thereof.

         d.       APPLICATION OF MANUAL. All hotels operated within the System
                  will be subject to the Manual, as it may from time to time be
                  modified or revised by Licensor. Licensor may, in its sole
                  discretion, grant limited exceptions from compliance with the
                  Manual which may be made based on local conditions or special
                  circumstances. Each material change in the Manual will be
                  explained in writing to Licensee at least 30 days before it
                  goes into effect.

2.       GRANT OF LICENSE.

         Licensor hereby grants to Licensee a nonexclusive license (the
         "License") to use the System only at the Hotel, only in connection with
         the operation of an Embassy Suites hotel, only in accordance with this
         Agreement and only during the "License Term" beginning with the date
         hereof and terminating as provided in Paragraph 13. The License apples
         to the location of the Hotel specified herein and no other. This
         Agreement does not limit Licensor's right, or the rights of any parent,
         subsidiary, division or affiliate of Licensor ("Entities"), to use or
         license to others the System or any part thereof or to engage in or
         license any business activity at any other location. Licensee
         acknowledges that Licensor and its Entities are and may in the future
         be engaged in other business activities including activities involving
         transient lodging and related activities which may be or may be deemed
         to be competitive with the System; that facilities, programs, services
         and/or personnel used in connection with the System may also be used in
         connection with such other business activities of Licensor and its
         Entities; and that Licensee is acquiring no rights hereunder other than
         the non-exclusive right to use the System in connection with an Embassy
         Suites hotel as specifically defined herein in accordance with the
         terms of this Agreement.

3.       LICENSOR'S RESPONSIBILITIES.

         a.       TRAINING. During the License Term, Licensor will specify
                  required and optional training programs and provide these
                  programs at various locations. Licensee may be charged for (i)
                  required training services and materials and (ii) for optional
                  training services and materials if provided to Licensee.
                  Travel, lodging and other expenses of Licensee and its
                  employees will be borne by Licensee.

         b.       RESERVATION SERVICES. During the License Term, so long as
                  Licensee is in full compliance with the obligations set forth
                  in this Agreement, Licensor will afford Licensee access to
                  reservation services for the Hotel.

         c.       CONSULTATION. Licensor will, from time to time at Licensor's
                  sole discretion, make available to Licensee consultation and
                  advice in connection with operations, facilities and
                  marketing. Licensor shall have the right to establish fees in
                  advance for its advice and consultation on a
                  project-by-project basis.

         d.       ARRANGEMENTS FOR MARKETING, ETC. Licensor will use the
                  Marketing/Reservation Contribution for costs associated with
                  advertising, promotion, publicity, market research and other
                  marketing programs and related activities, including
                  reservation programs and services. Licensor may enter into
                  arrangements for development, marketing, operations,
                  administrative, technical and support functions, facilities,
                  programs, services and/or personnel with any other entity and
                  may use any facilities, programs, services and/or personnel
                  used in connection with the System in connection with any
                  business activities of its Entities. Licensor is not obligated
                  to expend funds for marketing or reservation services in
                  excess of the amounts received from Licensees using the
                  System.

         e.       INSPECTIONS/COMPLIANCE ASSISTANCE. Licensor has the right to
                  inspect the Hotel at any time, with or without notice to
                  Licensee, to determine if the Hotel is in compliance with the
                  standards and rules of operation set forth in the Manual. If
                  the Hotel fails to comply with such standards and rules of
                  operation, Licensor may, at its option and at Licensee's cost,
                  require an action plan to correct the deficiencies. Licensee
                  must then take all steps necessary to correct any deficiencies
                  within the times established by Licensor. Licensor's approval
                  of an action plan does not waive any rights it may have under
                  this Agreement nor does it relieve Licensee of any obligations
                  under this Agreement.

                                       2
<PAGE>

4.       PROPRIETARY RIGHTS.

         a.       OWNERSHIP OF THE SYSTEM. Licensee acknowledges and will not
                  contest, either directly or Indirectly, Licensor's
                  unrestricted and exclusive ownership of the System and any
                  element(s) or component(s) thereof, and acknowledges that
                  Licensor has the sole right to grant licenses to use all or
                  any element(s) or component(s) of the System. Licensee
                  specifically agrees and acknowledges that Licensor is the
                  owner of all right, title and interest in and to the service
                  mark "Embassy Suites", its distinguishing characteristics,
                  trade names, service marks, trademarks, logos, copyrights,
                  slogans, etc., and all other marks associated with the System
                  ("Marks") together with the goodwill symbolized thereby and
                  that Licensee will not contest directly or indirectly the
                  validity or ownership of the Marks either during the term of
                  this Agreement or at any time thereafter. All improvements and
                  additions whenever made to or associated with the System by
                  the parties to this Agreement or anyone else, and all service
                  marks, trademarks, copyrights, and service mark and trademark
                  registrations at any time used, applied for or granted in
                  connection with the System, and all goodwill arising from
                  Licensee's use of the Marks shall inure to the benefit of and
                  become the property of Licensor. Upon expiration or
                  termination of this Agreement, no monetary amount shall be
                  assigned as attributable to any goodwill associated with
                  Licensee's use of the System or any element(s) or component(s)
                  of the System including the name or Marks.

         b.       USE OF NAME. Licensee will not use the word "Embassy" or any
                  similar word(s) in its corporate, partnership, business or
                  trade name, nor authorize or permit such word(s) to be used by
                  anyone else.

5.       TRADEMARK AND SERVICE MARK.

         a.       TRADEMARK DISPUTES. Licensor will have the sole right and
                  responsibility to handle disputes with third parties
                  concerning use of all or any part of the System, and Licensee
                  will, at its reasonable expense, extend its full cooperation
                  to Licensor in all such matters. All recoveries made as a
                  result of disputes with third parties regarding use of the
                  System or any part thereof shall be for the account of
                  Licensor. Licensor need not initiate suit against alleged
                  imitators or infringers and may settle any dispute by grant of
                  a license or otherwise. Licensee will not initiate any suit or
                  proceeding against alleged imitators or infringers or any
                  other suit or proceeding to enforce or protect the System.

         b.       PROTECTION OF NAMES AND MARKS. Both parties will make every
                  effort consistent with the foregoing to protect and maintain
                  the Marks and name "Embassy Suites" and its distinguishing
                  characteristics as standing for the System and only the
                  System; provided, however, both parties acknowledge that
                  Licensor may allow certain hotels which had written franchise
                  commitments or licenses in the ___________________________
                  franchise system to use the name "Embassy Suites" and other
                  related marks of the System. Licensee agrees to execute any
                  documents deemed necessary by Licensor or its counsel to
                  obtain protection for Licensor's Marks or to maintain their
                  continued validity and enforceability. Licensee agrees to use
                  such names and Marks only in connection with the operation of
                  an Embassy Suites hotel and in the manner authorized by
                  Licensor. Licensee acknowledges that any unauthorized use of
                  the names or Marks shall constitute infringement of Licensor's
                  rights. Licensee must notify Licensor immediately, in writing,
                  of any infringement or challenge to Licensee's use of the
                  Marks or of any unauthorized use or possible misuse of
                  Licensor's Marks or Licensor's proprietary information.

6.       LICENSEE'S RESPONSIBILITIES.

         a.       OPERATIONAL AND OTHER REQUIREMENTS. During the License Term,
                  Licensee will:

                  (1)      promptly pay to Licensor all amounts due Licensor and
                           its Entities as royalties or fees or for goods or
                           services purchased by Licensee;

                  (2)      maintain the Hotel in a clean, safe and orderly
                           manner and in first class condition;

                  (3)      provide efficient, courteous and high-quality service
                           to the public;

                  (4)      operate the Hotel 24 hours a day every day, except as
                           otherwise permitted by Licensor based on special
                           circumstances;

                                       3
<PAGE>

                  (5)      strictly comply in all respects with the Manual and
                           with all other policies, procedures and requirements
                           of Licensor which may be from time to time
                           communicated to Licensee;

                  (6)      strictly comply with Licensor's reasonable
                           requirements to protect the System and the Hotel from
                           unreliable sources of supply;

                  (7)      strictly comply with Licensor's requirements as to:

                           (a)      the types of services and products that (i)
                                    must be used, promoted or offered at the
                                    Hotel and (ii) may be used at the Hotel;

                           (b)      use, display, style and type of signage;

                           (c)      directory and reservation service listings
                                    of the Hotel;

                           (d)      training of persons to be involved in the
                                    operation of the Hotel;

                           (e)      participation in all marketing, reservation
                                    service, advertising, training and operating
                                    programs designated by Licensor as
                                    System-wide (or area-wide) programs in the
                                    best interests of hotels using the System;

                           (f)      maintenance, appearance and condition of
                                    the Hotel; and

                           (g)      quality and type of service offered to
                                    customers at the Hotel.

                  (8)      use such automated guest service and/or hotel
                           management and/or telephone system(s) which Licensor
                           deems to be in the best interests of the System,
                           including any additions, enhancements, supplements or
                           variants thereof which may be developed during the
                           term hereof;

                  (9)      participate in and use those reservation services
                           which Licensor deems to be in the best interests of
                           the System, including any additions, enhancements,
                           supplements or variants thereof which may be
                           developed during the term hereof;

                  (10)     adopt improvements or changes to the System as may be
                           from time to time designated by Licensor

                  (11)     strictly comply with all governmental requirements,
                           including the filing and maintenance of any required
                           trade name or fictitious name registrations, paying
                           all taxes, and maintaining all governmental licenses
                           and permits necessary to operate the Hotel in
                           accordance with the System;

                  (12)     permit inspection of the Hotel by Licensor's
                           representatives at any time and give them free
                           lodging for such time as may be reasonably necessary
                           to complete their inspections;

                  (13)     upon request by Licensor, provide to Licensor
                           statistics on Hotel operations in the form specified
                           by Licensor and using definitions specified by
                           Licensor;

                  (14)     promote the Hotel on a local or regional basis
                           subject to Licensor's requirements as to form,
                           content and prior approvals;

                  (15)     insure that no part of the Hotel or the System is
                           used to further or promote a competing business or
                           other lodging facility, except as Licensor may
                           approve for those competing businesses or lodging
                           facilities owned, licensed, operated or otherwise
                           approved by Licensor or its Entities;

                  (16)     use every reasonable means to encourage use of
                           Embassy Suites facilities everywhere by the public;

                                       4
<PAGE>

                  (17)     in all respects use Licensee's best efforts to
                           reflect credit upon and create favorable public
                           response to the name "Embassy Suites"; and

                  (18)     comply with Licensor's requirements concerning
                           confidentiality of information.

         b.       UPGRADING OF THE HOTEL. Licensor may at any time during the
                  License Term require substantial modernization, rehabilitation
                  and other upgrading of the Hotel. Limited exceptions from
                  those standards may be made by Licensor based on local
                  conditions or special circumstances. If the upgrading
                  requirements contained in this Paragraph 6.b. cause Licensee
                  undue hardship, Licensee may terminate this Agreement by
                  paying a fee computed according to Paragraph 13.f.

         c.       STAFF AND MANAGEMENT. Licensee must at all times retain and
                  exercise direct management control over the Hotel's business.
                  Licensee shall not enter into any lease, management agreement
                  or other similar arrangement for the operation of the Hotel or
                  any part thereof with any entity without the prior written
                  consent of Licensor.

7.       FEES.

         a.       For each month (or part of a month) during the License Term,
                  Licensee will pay to Licensor by the 15th of the following
                  month:

                  (1)      a royalty fee equal to 4 percent of the gross
                           revenues attributable to or payable for rental of
                           Guest Suites at the Hotel with deductions for sales
                           and room taxes only ("Gross Suites Revenue"); and

                  (2)      a "Marketing/Reservation Contribution" equal to 3.5
                           percent of Gross Suites Revenue (but no less than
                           $1.75 per guest suite per night). The
                           Marketing/Reservation Contribution is subject to
                           change by Licensor from time to time, which
                           Marketing/Reservation Contributions do not include
                           the cost, installation or maintenance of reservation
                           services equipment or training; and

                  (3)      all amounts due Licensor for any other miscellaneous
                           fees or invoices or for goods or services purchased
                           by or provided to Licensee; and

                  (4)      an amount equal to any sales, gross receipts or
                           similar tax imposed on Licensor for the receipt of
                           the payments required in (1), (2) and (3) of this
                           Paragraph above, unless the tax is an optional
                           alternative to an income tax otherwise payable by
                           Licensor.

         b.       Licensee will operate the Hotel so as to maximize Gross Suites
                  Revenue consistent with sound marketing and industry practice
                  and will not engage in any conduct which is likely to reduce
                  Gross Suites Revenue in order to further other business
                  activities.

         c.       Royalties may be charged on revenues (or upon any other basis,
                  if so determined by Licensor) from any activity conducted at
                  the Hotel if added by mutual agreement and if: (i) not now
                  offered at hotels within the System generally and is likely to
                  benefit significantly from or be identified significantly with
                  the Embassy Suites name or other aspects of the System or (ii)
                  designed or developed by or for Licensor.

         d.       Licensor may charge for optional products or services accepted
                  by Licensee from Licensor either in accordance with current
                  practice or as developed in the future.

         e.       A Guest Suite addition fee for guest suite additions to a
                  hotel set forth in Licensor's then current "Franchise Offering
                  Circular" shall be paid by Licensee to Licensor on Licensee's
                  submission of an application to add any Guest Suites to the
                  Hotel. As a condition to Licensor granting its approval of
                  such application, Licensor may require Licensee to upgrade the
                  Hotel, subject to Paragraph 6.b.

         f.       Local and regional marketing programs and related activities
                  may be conducted by Licensee, but only at Licensee's expense
                  and subject to Licensor's requirements. Reasonable charges may
                  be made by Licensor for optional advertising materials ordered
                  or used by Licensee for such programs and activities.

                                       5
<PAGE>

         g.       Licensee shall participate in Licensor's travel agent
                  commission program(s) as it may be modified from time to time
                  and shall reimburse Licensor on or before the 15th of each
                  month for travel agent commissions paid by Licensor.

         h.       Each payment under this Paragraph 7 shall be accompanied by
                  the monthly statement referred to in Paragraph 8. Licensor may
                  apply any amounts received under this Paragraph 7 to any
                  amounts due under this Agreement. If any amounts are not paid
                  when due, such non-payment shall constitute a breach of this
                  Agreement and, in addition, such unpaid amounts will accrue
                  interest beginning on the first day of the month following the
                  due date at 1 1/2 percent per month but not to exceed the
                  maximum interest permitted by applicable law.

8.       RECORDS AND AUDITS.

         a.       DAILY AND MONTHLY REPORTS. At the request of Licensor,
                  Licensee shall prepare and delver daily reports to Licensor,
                  which reports will contain information reasonably requested by
                  Licensor on a daily basis, such as daily rate and room
                  occupancy, and which may be used by Licensor for its
                  reasonable purposes. At least monthly, Licensee shall prepare
                  a statement which will include all information concerning
                  Gross Suites Revenue, other revenues generated at the Hotel,
                  suite occupancy rates, reservation data and other information
                  required by Licensor that may be useful in connection with
                  marketing and other functions of Licensor and its Entities
                  (the "Data"). The Data shall be the property of Licensor. The
                  Data will be permanently recorded and retained as may be
                  reasonably required by Licensor. By the 15th of each month,
                  Licensee will submit to Licensor a statement setting forth the
                  Data for the previous month and reflecting the computation of
                  the amounts then due under Paragraph 7. The statement will be
                  in such form and detail as Licensor may reasonably request
                  from time to time, and may be used by Licensor for its
                  reasonable purposes.

         b.       MAINTENANCE OF RECORDS. Licensee shall, in a manner and form
                  satisfactory to Licensor and utilizing accounting and
                  reporting standards as reasonably required by Licensor,
                  prepare on a current basis (and preserve for no less than four
                  years), complete and accurate records concerning Gross Suites
                  Revenue and all financial, operating, marketing and other
                  aspects of the Hotel, and maintain an accounting system which
                  fully and accurately reflects all financial aspects of the
                  Hotel and its business. Such records shall include books of
                  account, tax returns, governmental reports, register tapes,
                  daily reports, and complete quarterly and annual financial
                  statements (profit and loss statements, balance sheets and
                  cash flow statements).

         c.       AUDIT. Licensor may require Licensee to have the Gross Suites
                  Revenue or other monies due hereunder computed and certified
                  as accurate by a certified public accountant. During the
                  License Term and for two years thereafter, Licensor and its
                  authorized agents shall have the right to verify information
                  required under this Agreement by requesting, receiving,
                  inspecting and auditing, at all reasonable times, any and all
                  records referred to above wherever they may be located (or
                  elsewhere if reasonably requested by Licensor). If any such
                  inspection or audit discloses a deficiency in any payments due
                  hereunder, Licensee shall immediately pay to Licensor (i) the
                  deficiency, (ii) interest thereon as provided in Paragraph
                  7.h., and (iii) all inspection and audit costs (including
                  travel, lodging, meals, salaries and other expenses of the
                  inspecting or auditing personnel). Licensor's acceptance of
                  Licensee's payment of any deficiency as provided for herein
                  shall not waive Licensor's right to terminate this Agreement
                  as provided for herein in Paragraph 13. If the audit discloses
                  an overpayment, Licensor shall refund the overpayment to
                  Licensee within 30 days.

         d.       ANNUAL FINANCIAL STATEMENTS. Licensee will submit to Licensor
                  complete year-end financial statements for the Hotel, Licensee
                  and/or any guarantors as soon as available but not later than
                  90 days after the end of Licensee's fiscal year. Licensee will
                  certify them to be true and correct and to have been prepared
                  in accordance with generally accepted accounting principles
                  consistently applied, and any false certification will be a
                  breach of this Agreement.

9.       INDEMNITY.

         Licensee will indemnify, during and after the term of this Agreement,
         Licensor and its Entities and their officers, directors, employees,
         agents, predecessors, successors and assigns (`Indemnified Parties")
         against, hold them

                                       6
<PAGE>

         harmless from, and promptly reimburse them for, all payments of money
         (fines, damages, legal fees, expenses, etc.) by reason of any claim,
         demand, tax, penalty, or judicial or administrative investigation or
         proceeding (even where negligence of Licensor and/or its Entities
         and/or their Indemnified Parties is actual or alleged) arising from any
         claimed occurrence at the Hotel or arising from, as a result of or in
         connection with the design, construction, furnishings, equipment and
         acquisition of supplies or any other of Licensee's acts, omissions or
         obligations or those of anyone associated or affiliated with Licensee
         or the Hotel. At the election of Licensor, Licensee will also defend
         Licensor and/or its Entities and/or their Indemnified Parties against
         the same. In any event, Licensor will have the right, through counsel
         of its choice, to control any mailer to the extent it could directly or
         indirectly affect Licensor and/or its Entities and/or their Indemnified
         Parties financially. Licensee will also reimburse Licensor for all
         expenses, including attorneys' fees and court costs, reasonably
         incurred by Licensor to protect itself and/or its Entities and/or their
         Indemnified Parties from, or to remedy Licensee's defaults or to
         collect any amounts due under this Agreement.

10.      INSURANCE.

         a.       Licensee will comply with Licensor's specifications for
                  insurance as to amount and type of coverage as may be
                  reasonably specified by Licensor from time to time in writing
                  and will in any event maintain as a minimum the following
                  insurance underwritten by an insurer approved by Licensor:

                  (1)      employer's liability and workers' compensation
                           insurance as prescribed by applicable law; and

                  (2)      liquor liability insurance, if applicable, naming
                           Licensor and its then current Entities and their
                           predecessors, successors and assigns as additional
                           insureds with single-limit coverage for personal and
                           bodily injury and property damage of at least
                           $10,000,000 for each occurrence; and

                  (3)      commercial general liability insurance (with
                           products, completed operations and independent
                           contractors coverage) and comprehensive automobile
                           liability insurance, all on an occurrence and per
                           location basis naming Licensor, its Entities and
                           their predecessors, successors and assigns as
                           additional insureds and underwritten by an insurer
                           approved by Licensor, with single-limit coverage for
                           personal and bodily injury and property damage of at
                           least $10,000,000 for each occurrence; and

                  (4)      in connection with all construction at the Hotel
                           during the License Term, Licensee will cause the
                           general contractor to maintain with an insurer
                           approved by Licensor commercial general liability
                           insurance (with products, completed operations, and
                           independent contractors coverage including workers'
                           compensation and automobile liability insurance for
                           such independent contractors) in at least the amount
                           of $10,000,000 for each occurrence for personal and
                           bodily injury and property damage with Licensor, its
                           Entities and their predecessors, successors and
                           assigns as additional insureds.

         b.       EVIDENCE OF INSURANCE/CHANGES. This coverage shall be
                  evidenced by original certificates of insurance submitted to
                  Licensor simultaneously herewith, annually hereafter and each
                  time a change is made in any insurance or insurance carrier,
                  Licensee will furnish to Licensor certificates of insurance
                  including the term and coverage of the insurance in force, the
                  persons insured, and a statement that the coverage may not be
                  cancelled, altered or permitted to lapse or expire without 30
                  days advance written notice to Licensor. Licensor will send
                  Licensee notice of any policy or coverage which Licensor, in
                  its sole discretion, finds unacceptable and upon receipt of
                  such notice, Licensee will promptly undertake to change such
                  policy or coverage.

         c.       If Licensee fails or neglects to obtain or maintain the
                  insurance or policy limits required by this Agreement,
                  Licensor shall have the option, without notice, to obtain and
                  maintain such insurance for Licensee, and Licensee shall pay
                  immediately upon demand therefore, the premiums and the cost
                  incurred by Licensor in taking such action.

11.      TRANSFER.

         a.       TRANSFER BY LICENSOR. Licensor shall have the right to
                  transfer or assign this Agreement or any of Licensor's rights
                  or obligations under this Agreement to any person or legal
                  entity.

                                       7
<PAGE>

         b.       TRANSFERS BY LICENSEE. This License is not transferrable and
                  to change the License holder a new License must be approved by
                  Licensor and, if approved, executed by the new licensee.
                  Licensee understands and acknowledges that the rights and
                  duties set forth in this Agreement are personal to Licensee,
                  and that Licensor has entered into this Agreement in reliance
                  on the business skill, financial capacity, and personal
                  character of Licensee (if Licensee is an individual), and that
                  of the partners, members, or stockholders of Licensee (if
                  Licensee is a partnership, company, corporation, or other
                  legal entity). Accordingly, neither Licensee nor any immediate
                  or remote successor to any part of Licensee's interest in this
                  Agreement, nor any individual, partnership, company,
                  corporation, or other legal entity which directly or
                  indirectly owns an Equity Interest (as defined herein) in
                  Licensee shall sell, assign, transfer, convey, pledge,
                  mortgage, encumber, or give away ("Transfer") any direct or
                  Indirect Interest in this Agreement or Equity Interest in
                  Licensee, except as provided in this Agreement.

                  (1)      Any purported transfer, by operation of law or
                           otherwise, of any interest in this Agreement or any
                           Equity Interest in Licensee not in accordance with
                           the provisions of this Agreement shall be null and
                           void and shall constitute a material breach of this
                           Agreement, for which Licensor may terminate this
                           Agreement upon notice without opportunity to cure
                           pursuant to Paragraph 13.d.

                  (2)      References in this Agreement to "Equity Interests"
                           shall mean (i) any direct or indirect beneficial
                           interest in Licensee; (ii) any stock, membership or
                           partnership interest in Licensee, or (iii) any stock,
                           membership or partnership interest in any
                           corporation, partnership, company, or other legal
                           entity which is a partner, member or stockholder of
                           Licensee. In addition, "publicly-traded equity
                           interest" shall mean any Equity Interest which is
                           traded on any securities exchange or is quoted in any
                           publication or electronic reporting service
                           maintained by the National Association of Securities
                           Dealers, Inc. or any of its successors. In computing
                           changes of Equity Interests limited partners will not
                           be distinguished from general partners, and
                           Licensor's judgment will be final if there is any
                           question as to the definition of Equity Interest or
                           as to the computation of relative Equity Interests,
                           the principal considerations being: direct and
                           indirect (i) power to exercise control over the
                           affairs of Licensee; (ii) right to share in
                           Licensee's profits; and (iii) exposure to risk in the
                           Licensee's business.

                  (3)      Licensee represents that the Equity Interests are
                           directly and (if applicable) indirectly owned as
                           shown on the Rider.

         c.       TRANSFER OF EQUITY INTERESTS. The following situations are
                  permitted Transfers of Equity Interests:

                  (1)      Equity Interests may be Transferred as follows, with
                           Licensor's prior written consent, which will not be
                           unreasonably withheld, provided at all times adequate
                           provision is made for management of the Hotel:

                           (a)      Equity Interests which are not
                                    publicly-traded may be Transferred, if after
                                    the transaction, 50 percent or less of all
                                    Equity Interests will have changed hands
                                    since the date of this Agreement.

                           (b)      Equity Interests which require registration
                                    under any federal or state securities law
                                    may be Transferred provided that Licensee
                                    (i) at least 45 days prior to the proposed
                                    registration submits a request for
                                    Licensor's consent accompanied by a
                                    non-refundable payment of $25,000, and (ii)
                                    reimburses Licensor for expenses in excess
                                    of $25,000 incurred in connection with the
                                    review of the materials concerning the
                                    proposed registration, including Licensor's
                                    attorneys' fees and travel expenses.

                           (c)      Licensee and all participants in any
                                    proposed offering (including the sale of
                                    partnership or membership interests) must
                                    also agree to fully indemnify Licensor in
                                    connection with the registration; furnish
                                    Licensor all information requested by
                                    Licensor; avoid any implication of
                                    Licensor's participating in or endorsing the
                                    offering and use Licensor's service marks
                                    and trademarks only as directed by Licensor.

                                       8
<PAGE>

                           (d)      Publicly-traded equity interest may be
                                    Transferred without Licensor's consent If
                                    such transfer is exempt from registration
                                    under federal securities law and if
                                    immediately before and after the Transfer,
                                    the transferor and transferee respectively
                                    each own less than 25 percent of the Equity
                                    Interests in Licensee.

                  (2)      PERMITTED TRANSFEREES/LICENSEE'S DEATH.

                           (a)      Licensee, if a natural person, may transfer
                                    the License to one or more of Licensee's
                                    spouse, parents, siblings, nephews,
                                    descendants or spouses descendants or to a
                                    corporation entirely owned by Licensee
                                    ("Permitted Transferees") provided (i) the
                                    Permitted Transferee promptly executes a new
                                    license agreement (and guaranty, if
                                    applicable) on Licensee's then current
                                    license agreement form for the unexpired
                                    term of this Agreement and (ii) Licensee
                                    guarantees, in Licensor's usual form, the
                                    performance of the Permitted Transferee's
                                    obligations under the newly executed license
                                    agreement.

                           (b)      If Licensee is a natural person, upon the
                                    Licensee's death, the License will pass in
                                    accordance with Licensee's will, or, if
                                    Licensee dies intestate, in accordance with
                                    laws of intestacy governing the distribution
                                    of the Licensee's estate, as the case may
                                    be, provided the transferee is one or more
                                    of the decedent's Permitted Transferee's
                                    (excluding corporations formerly owned by
                                    the Licensee) and provided the Permitted
                                    Transferee promptly executes a new license
                                    agreement (and guaranty if applicable) on
                                    Licensor's then current license agreement
                                    form for the unexpired term of this
                                    Agreement.

                           (c)      If an Equity Interest is owned by a natural
                                    person, the transfer provisions of Paragraph
                                    11.c.(2)(a) and (b) above will apply to the
                                    Transfer of such Equity Interests to a
                                    Permitted Transferee.

                  (3)      FINANCING. The construction and/or operation of the
                           Hotel may not be financed by a pubic offering of any
                           right, title or interest in the Hotel, the property
                           upon which it is built or the receipts from its
                           operation without the prior review and approval of
                           the applicable documentation by Licensor. Licensee
                           shall submit a non-refundable $25,000 fee with said
                           documentation.

                  (4)      CHANGE OF OWNERSHIP.

                           (a)      This License is not transferrable. If
                                    Licensee (i) receives an offer to purchase
                                    or lease the Hotel or any portion thereof,
                                    (ii) desires to sell or lease the Hotel or
                                    any portion thereof, (iii) wishes to convey
                                    the Hotel, Hotel site, or any Equity
                                    Interest in the Hotel, Licensee shall give
                                    prompt written notice thereof to Licensor,
                                    stating the identity of the prospective
                                    transferee, purchaser or lessee and the
                                    terms and conditions of the conveyance,
                                    including a copy of any proposed agreement
                                    and all other information with respect
                                    thereto, which Licensor may reasonably
                                    require.

                           (b)      Under the provisions of this Agreement, (i)
                                    any Transfer of Equity Interests (other than
                                    a permitted Transfer) or (ii) Transfer of
                                    all or a substantial part of the Hotel or
                                    Hotel site (if the Hotel or Hotel site is
                                    owned directly or indirectly by Licensee),
                                    to a new owner who desires to operate the
                                    Hotel as an Embassy Suites hotel, shall
                                    constitute a change of ownership requiring
                                    submittal of an application for a new
                                    license.

                           (c)      Licensor shall process such change of
                                    ownership application in good faith and in
                                    accordance with Licensor's then current
                                    procedures, criteria and requirements
                                    regarding fees, upgrading of the Hotel,
                                    credit, operational abilities and
                                    capabilities, prior business dealings,
                                    market feasibility and other factors deemed
                                    relevant by Licensor. If such change of
                                    ownership application is approved, Licensor
                                    and the new owner shall, upon surrender of
                                    this Agreement, enter into a new license
                                    agreement. The new license agreement shall
                                    be on Licensor's then current form and
                                    contain Licensor's then current terms
                                    (except for duration), and if applicable,
                                    the new license agreement will contain
                                    specified upgrading and other requirements.

                                       9
<PAGE>

                           (d)      If a change of ownership application for the
                                    proposed new owner is not approved by
                                    Licensor and the conveyance of the Hotel or
                                    Equity Interests to the proposed new owner
                                    occurs, then this Agreement shall terminate
                                    pursuant to Paragraph 13.d hereof and
                                    Licensor shall be entitled to all of its
                                    remedies.

12.      CONDEMNATION AND CASUALTY.

         a.       CONDEMNATION. Licensee shall, at the earliest possible time,
                  give Licensor notice of any proposed taking by eminent domain.
                  If Licensor agrees that the Hotel or a substantial part
                  thereof is to be taken, Licensor may, in its sole discretion
                  and within a reasonable time of the taking (within four
                  months) transfer this Agreement to a nearby location selected
                  by Licensee. If Licensor approves the new location and
                  authorizes the transfer and if within one year of the closing
                  of the Hotel Licensee opens a new hotel at the new location in
                  accordance with Licensor's specifications, then the new hotel
                  will be deemed to be the Hotel licensed under this Agreement.
                  If a condemnation takes place and a new hotel does not, for
                  whatever reason, become the Hotel under this Agreement in
                  strict accordance with this Paragraph (or if it is reasonably
                  evident to Licensor that such will be the case), this
                  Agreement will terminate immediately upon notice thereof by
                  Licensor to Licensee, without the payment of liquidated
                  damages as calculated in Paragraph 13.f.

         b.       CASUALTY. If the Hotel is damaged by fire or other casualty,
                  Licensee will expeditiously repair the damage. If the damage
                  or repair requires closing the Hotel, Licensee will
                  immediately notify Licensor, will repair or rebuild the Hotel
                  according to Licensor's standards, will commence
                  reconstruction within four months after closing, and will
                  reopen the Hotel for continuous business operations as soon as
                  practicable (but in any event within one year after the
                  closing of the Hotel), giving Licensor ample advance notice of
                  the date of reopening. If the Hotel is not reopened according
                  to this Paragraph, this Agreement will terminate immediately,
                  upon notice thereof by Licensor to Licensee, with the payment
                  of liquidated damages as calculated in Paragraph 13.f.

         c.       NO EXTENSIONS OF TERM. Nothing in this Paragraph 12 will
                  extend the License Term but Licensee shall not be required to
                  make any payments pursuant to Paragraph 7 for periods during
                  which the Hotel is closed by reason of condemnation or
                  casualty.

13.      TERMINATION.

         a.       EXPIRATION OF TERM. Unless terminated earlier, this Agreement
                  will expire without notice on _________________ 20__.

         b.       PERMITTED TERMINATION PRIOR TO EXPIRATION OF TERM. Licensee
                  may terminate this Agreement on the tenth or fifteenth
                  anniversary date of this Agreement by giving at least 12 but
                  not more than 15 months advance notice to Licensor accompanied
                  by the payment as provided in Paragraph 13.f. herein.

         c.       TERMINATION OR SUSPENSION BY LICENSOR ON ADVANCE NOTICE. This
                  Agreement may be terminated if Licensee fails to satisfy any
                  obligations under this Agreement or any attachment hereto.
                  Except as provided in Paragraph 13.d, this Agreement shall
                  terminate following an Event of Default after the Licensor
                  furnishes adequate notice of termination.

                  (1)      An "Event of Default" shall occur if the Licensee
                           fails to satisfy or comply with any of the
                           requirements and conditions or terms as set forth in
                           Attachment A or this Agreement, or breaches any of
                           the following provisions of this Agreement: (i) any
                           transfer, (ii) any representation or warranty, (iii)
                           any fee obligation, (iv) any certification of
                           financial statements or (v) any other provision of
                           this Agreement.

                  (2)      Notice of termination shall be adequate, if (i)
                           mailed the number of days in advance of the
                           termination date as Licensor shall determine in its
                           sole discretion, or (ii) mailed the number of days in
                           advance of the termination date as required by
                           applicable state law. If no notice is required by
                           applicable state law, Licensor may, in its sole
                           discretion, terminate this Agreement immediately.
                           Notwithstanding the foregoing, Licensor's failure to
                           terminate this Agreement immediately shall not waive
                           any of Licensor's termination rights under this
                           Agreement.

                                       10
<PAGE>
                  (3)      Licensor's notice of termination shall not relieve
                           Licensee of its obligations under this Agreement or
                           Attachment A.

                  (4)      As a result of Licensee's efforts to comply with the
                           terms and conditions contained on Attachment A and
                           elsewhere in this Agreement, Licensee will incur
                           substantial expense and expend substantial time and
                           effort. Licensee acknowledges and agrees that
                           Licensor shall have no liability or obligation to
                           Licensee for any losses, obligations, liabilities or
                           expenses incurred by Licensee if (i) Licensee commits
                           an Event of Default as described on 13.c(1); (ii) the
                           Hotel is not authorized by Licensor to Open as
                           defined in Attachment A or (iii) this Agreement is
                           terminated because Licensee has not complied with the
                           terms and conditions of this Agreement.

                  (5)      Notwithstanding the foregoing, following an Event of
                           Default, Licensor may at any time, in its sole
                           discretion, suspend its obligations under this
                           Agreement (including reservation services).

         d.       IMMEDIATE TERMINATION BY LICENSOR. Notwithstanding the
                  foregoing Paragraph, this Agreement may be immediately
                  terminated (or terminated at the earliest time permitted by
                  applicable law) if one or more of the following material
                  breaches to this Agreement or any Attachment occur:

                  (1)      Any Event of Default where a prior Event of Default
                           had also occurred during the preceding 12 months, but
                           the License was not terminated because Licensee cured
                           the prior Event of Default;

                  (2)      Any Event of Default where the Licensor in its
                           reasonable judgment believes that even if the
                           Licensee were to cure such Event of Default the
                           relationship between the parties has been irreparably
                           damaged and cannot be satisfactorily restored;

                  (3)      Licensee or any guarantor of Licensee's obligations
                           hereunder shall:

                           (a)      generally not pay its debts as they become
                                    due or shall admit in writing its inability
                                    to pay its debts, or shall make a general
                                    assignment for the benefit of creditors; or

                           (b)      commence any case, proceeding or other
                                    action seeking reorganization, arrangement,
                                    adjustment, liquidation, dissolution or
                                    composition of it or its debts under any law
                                    relating to bankruptcy, insolvency,
                                    reorganization or relief of debtors, or
                                    seeking appointment of a receiver, trustee,
                                    custodian or other similar official for it
                                    or for all or any substantial part of its
                                    property; or

                           (c)      take any corporate or other action to
                                    authorize any of the actions set forth above
                                    in Paragraphs (a) or (b); or

                  (4)      Any case, proceeding or other action against Licensee
                           or any such guarantor shall be commenced seeking to
                           have an order for relief entered against it as
                           debtor, or seeking reorganization, arrangement,
                           adjustment, liquidation, dissolution or composition
                           of it or its debts under any law relating to
                           bankruptcy, insolvency, reorganization or relief of
                           debtors, or seeking appointment of a receiver,
                           trustee, custodian or other similar official for it
                           or for all or any substantial part of its property,
                           and such case, proceeding or other action (i) results
                           in the entry of an order for relief against it which
                           is not fully stayed within seven business days after
                           the entry thereof or (ii) remains undismissed for a
                           period of 45 days; or

                  (5)      an attachment remains on all or a substantial part of
                           the Hotel or of Licensee's or any such guarantors
                           assets for 30 days; or

                  (6)      Licensee or any such guarantor fails within 60 days
                           of the entry of a final judgment against Licensee in
                           any amount exceeding $50,000 to discharge, vacate or
                           reverse the judgment, or to stay execution of it, or
                           if appointed, to discharge the judgment within 30
                           days after a final adverse decision in the appeal; or

                  (7)      Licensee loses possession or the right to possession
                           of all or a significant part of the Hotel or Hotel
                           site; or

                                       11
<PAGE>

                  (8)      Licensee fails to continue to identify the Hotel to
                           the public as an Embassy Suites hotel; or

                  (9)      Licensee contests in any court or proceeding
                           Licensor's ownership of the System or any part of the
                           System, or the validity of any service marks or
                           trademarks associated with Licensor's business; or

                  (10)     Any action is taken toward dissolving or liquidating
                           Licensee or any such guarantor, if it is a
                           corporation or partnership, except for death of a
                           partner; or

                  (11)     Licensee or any of its principals is, or is
                           discovered to have been convicted of a felony (or any
                           other offense if it is likely to adversely reflect
                           upon or affect the Hotel, the System, the Licensor
                           and/or its Entities in any way; or

                  (12)     Licensee maintains false books and records of
                           accounts or submits false reports or Information to
                           Licensor.

         e.       DE-IDENTIFICATION OF HOTEL UPON TERMINATION. Upon termination
                  or expiration of the term, Licensee will take whatever action
                  is necessary to assure that no use is made of any part of the
                  System at or in connection with the Hotel or otherwise.
                  Licensee shall return to Licensor the Manual and all other
                  proprietary materials, remove all distinctive System features
                  of the Hotel, including the primary freestanding sign down to
                  the structural steel, and take all other actions
                  ("De-identification Actions") required to preclude any
                  possibility of confusion on the part of the public that the
                  Hotel is still using all or any part of the System or is
                  otherwise holding itself out to the public as an Embassy
                  Suites hotel. If within 30 days after termination of this
                  Agreement Licensee fails to comply with this Paragraph,
                  Licensor or its agents at Licensee's expense, may enter the
                  premises of the Hotel to perform the De-identification
                  Actions. The preceding sentence shall not in any way limit
                  Licensor's other rights or remedies under this Agreement.

         f.       LIQUIDATED DAMAGES. The parties recognize the difficulty of
                  ascertaining damages to Licensor resulting from premature
                  termination of this Agreement, and have provided for
                  liquidated damages, which liquidated damages represent the
                  parties' best estimate as to the damages arising from the
                  circumstances in which they are provided and which are only
                  damages for the premature termination of this Agreement, and
                  not as a penalty or as damages for breaching this Agreement or
                  in lieu of any other payment. If this Agreement is terminated
                  pursuant to Paragraphs 6.b., 12.b., 13.c., or 13.d., Licensee
                  will pay Licensor, within 10 days of termination, an amount
                  equal to the amount payable under Paragraph 7 for the three
                  years prior to termination. If the Hotel has been Open for
                  less than three years, Licensee will pay Licensor, within 10
                  days of termination, an amount equal to the greater of (i) 36
                  times the monthly average payable under Paragraph 7, or (ii)
                  36 times the amount payable under Paragraph 7 for the last
                  full month prior to termination. Provided, however, if the
                  Hotel has been authorized to open, but has not been in
                  operation for one full month, Licensee will pay Licensor,
                  within 10 days, an amount equal to $5,000 per Guest Suite in
                  the Hotel. Further, provided, if the Agreement is terminated
                  pursuant to Paragraph 13.b., the Licensee will pay the
                  Licensor, within 10 days of notice required, an amount equal
                  to the amount payable under Paragraph 7 for the two years
                  prior to notice of termination.

14.      RENEWAL.

         This Agreement is non-renewable.

15.      RELATIONSHIP OF PARTIES.

         a.       NO AGENCY RELATIONSHIP. Licensee is an independent contractor.
                  Neither party is the legal representative or agent of, or has
                  the power to obligate (or has the right to direct or supervise
                  the daily affairs of) the other for any purpose whatsoever.
                  Licensor and Licensee expressly acknowledge that the
                  relationship intended by them is a business relationship based
                  entirely on, and defined by, the express provisions of this
                  Agreement and that no partnership, joint venture, agency,
                  fiduciary or employment relationship is intended or created by
                  reason of this Agreement.

                                       12
<PAGE>
         b.       LICENSEE'S NOTICES TO PUBLIC CONCERNING INDEPENDENT STATUS.
                  Licensee will take all necessary steps including those
                  reasonably requested by Licensor to minimize the chance of a
                  claim being made against Licensor for anything that occurs at
                  the Hotel, or for acts, omissions or obligations of Licensee
                  or anyone associated or affiliated with Licensee or the Hotel.
                  Such steps may, for example, include giving notice in Guest
                  Suites, public rooms and advertisements, on business forms and
                  stationery, etc., making clear to the public that Licensor is
                  not the owner or operator of the Hotel and is not accountable
                  for what happens at the Hotel. Unless required by law,
                  Licensee will not use the words "Embassy", "Embassy Suites" or
                  any other names or mark associated with the System to incur
                  any obligation or indebtedness on behalf of Licensor. Licensee
                  shall not enter into or execute any contracts in the name
                  "Embassy Suites hotel", and all contracts for the Hotel's
                  operations and services at the Hotel shall be in the name of
                  Licensee or Licensee's management company. Likewise, the words
                  "Embassy", "Embassy Suites", or any similar words will not be
                  used to name or identify developments adjacent to or
                  associated with the Hotel, nor will Licensee use such names in
                  its general business in any manner separated from the business
                  of the Hotel.

16.      MISCELLANEOUS.

         a.       SEVERABILITY AND INTERPRETATION. The remedies provided in this
                  Agreement are not exclusive. If any provision of this
                  Agreement is held to be unenforceable, void or voidable as
                  being contrary to the law or public policy of the jurisdiction
                  entitled to exercise authority hereunder, all remaining
                  provisions shall nevertheless continue in full force and
                  effect unless deletion of such provision(s) impairs the
                  consideration for this Agreement in a manner which frustrates
                  the purpose of the parties or makes performance commercially
                  impracticable. The provisions of this Agreement shall be
                  interpreted based on the reasonable intention of the parties
                  in the context of this transaction without interpreting any
                  provision in favor of or against any party whether or not such
                  party was the drafting party or by such party's position
                  relative to the other party. Any covenant, term or provision
                  of this Agreement which, in order to effect the intent of the
                  parties, must survive the termination of this Agreement, shall
                  survive any such termination.

         b.       BINDING EFFECT. This Agreement shall become valid when signed
                  by the parties hereto. It shall be deemed made and entered
                  into in the State of Tennessee and shall be governed and
                  construed under and in accordance with the laws of the State
                  of Tennessee. In entering into this Agreement, Licensee
                  acknowledges that it has sought, voluntarily accepted and
                  become associated with Licensor who is headquartered in
                  Memphis, Tennessee, and that this Agreement contemplates and
                  will result in business relationships with Licensor's
                  headquarter's personnel. The choice of law designation
                  permits, but does not require that all suits concerning this
                  Agreement be filed in the State of Tennessee.

         c.       EXCLUSIVE BENEFIT. This Agreement is exclusively for the
                  benefit of the parties hereto, and it may not give rise to
                  liability to a third party, except as otherwise specifically
                  set forth herein. No agreement between Licensor and anyone
                  else is for the benefit of Licensee.

         d.       ENTIRE AGREEMENT. Licensor and the Licensee each acknowledge
                  and warrant to each other that they wish to have all terms of
                  this business relationship defined in this written agreement,
                  Neither Licensor nor Licensee wishes to enter into a business
                  relationship with the other in which any terms or obligations
                  are the subject of alleged oral statements or in which oral
                  statements serve as the basis for creating rights or
                  obligations different than or supplementary to the rights and
                  obligations set forth in this Agreement. Accordingly, Licensor
                  and Licensee agree that this Agreement and any Attachments
                  hereto and the documents referred to herein, shall be
                  construed together and shall supersede and cancel any prior
                  and/or contemporaneous discussions or writings (whether
                  described as representations, inducements, promises,
                  agreements or any other term) between Licensor or anyone
                  acting on its behalf and Licensee or anyone acting on his, her
                  or its behalf, which might be taken to constitute agreements,
                  representations, inducements, promises or understandings (or
                  any equivalent to such terms) with respect to this Agreement
                  or the relationship between the parties and Licensor and
                  Licensee each agree that they have placed, and will place, no
                  reliance on any such discussions or writings. This Agreement
                  (including any Attachments and the documents referred to
                  herein), is the entire agreement between the parties and
                  contains all of the terms, conditions, rights and obligations
                  of the parties with respect to the Hotel or any other aspect
                  of the relationship between the parties. No future license or
                  offer of a license for additional locations or any other
                  business activity have been promised to Licensee and no such
                  license or offer

                                       13
<PAGE>

                  shall come into existence, except by means of a separate
                  writing, executed by Licensor's officer or such other entity
                  granting the license and specifically identified as a License
                  Agreement. No change, modification, amendment or waiver of any
                  of the provisions of this Agreement will be effective and
                  binding upon Licensor unless it is in writing, specifically
                  identified as an amendment to this Agreement and signed by
                  Licensor's officer.

         e.       LICENSOR'S WITHHOLDING CONSENT. Licensor may withhold its
                  consent, wherever required under this Agreement, if any
                  default or breach by Licensee exists under this Agreement.
                  Approvals and consents by Licensor will not be effective
                  unless evidenced by a writing duly executed on behalf of
                  Licensor.

         f.       NOTICES. Notices will be effective hereunder when and only
                  when they are written and delivered personally, sent via
                  facsimile or mailed by first class mail, next day express
                  delivery service or by certified mail to the appropriate party
                  at its address first stated above or to such person and at
                  such address as may be designated by notice hereunder.

         g.       GENERAL RELEASE. Licensee and its respective heirs,
                  administrators, executors, agents, representatives and their
                  respective successors and assigns, hereby release, remise,
                  acquit and forever discharge Licensor and its Entities and
                  their officers, directors, employees, agents, representatives
                  and their respective successors and assigns from any and all
                  actions, claims, causes of action, suits, rights, debts,
                  liabilities, accounts, agreements, covenants, contracts,
                  promises, warrants, judgments, executions, demands, damages,
                  costs and expenses, whether known or unknown at this time, of
                  any kind or nature, absolute or contingent, if any, at law or
                  in equity, on account of any matter, cause or thing whatsoever
                  which has happened, developed or occurred at any time from the
                  beginning of time to and including the date of Licensee's
                  execution and delivery to Licensor of this Agreement and that
                  they will not institute any suit or action at law or otherwise
                  against Licensor directly or indirectly relating to any claim
                  released hereby by Licensee. This release and covenant not to
                  sue shall survive the termination of this Agreement. Licensee
                  shall take whatever steps are necessary or appropriate to
                  carry out the terms of this release upon Licensor's request.

         h.       DESCRIPTIVE HEADINGS. The descriptive headings in this
                  Agreement are for convenience only and shall not control or
                  affect the meaning or construction of any provision in this
                  Agreement.

         i.       WARRANTIES. Licensee warrants, represents and agrees that all
                  statements made by Licensee in the Application submitted to
                  Licensor in anticipation of this Agreement and all other
                  documents and information submitted by Licensee are true,
                  correct and complete as of the date hereof and will continue
                  to be updated so that they are true, correct and complete.
                  This warranty and representation shall survive the termination
                  of this Agreement.

         j.       TIME. Time is of the essence in this Agreement.

         k.       INCLUDING. Including shall mean including, without limitation.

         l.       COUNTERPARTS. This Agreement may be executed in counterparts,
                  and each copy so executed and delivered shall be deemed an
                  original.

         m.       AMENDMENTS. If an amendment to this Agreement is required
                  prior to its execution, said amendment shall be made a part of
                  this Agreement as an Attachment. If an amendment to this
                  Agreement is necessary after its execution, said amendment
                  shall be made a part of this Agreement in the form of a
                  separate document.

         n.       PERFORMANCE REQUIREMENTS/RESPONSIBILITIES. Attachment A is
                  hereby incorporated by reference and made a part of this
                  Agreement to set forth certain of Licensee's performance
                  conditions and requirements.

17.      EXPIRATION OF AGREEMENT. This Agreement constitutes an offer which must
         be accepted by the Applicant named on the signature page hereof by
         dating, executing and returning to Licensor two copies hereof (and all
         attachments hereto, including, if required, the Guaranty) on or before
         the date specified on the Rider.

                                       14
<PAGE>

                IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first stated above.

LICENSEE:                               LICENSOR:

----------------------------------      ----------------------------------

By:                                     By:
   -------------------------------         -------------------------------

Name:                                   Name:
     -----------------------------           -----------------------------

Title:                                  Title:
      ----------------------------            ----------------------------

Witness:                                Witness:
       ---------------------------             ---------------------------

Date:                                   Date:
     -----------------------------           -----------------------------

                                       15
<PAGE>

                                    GUARANTY

Location:

As an inducement to _____________ Inc. ("Licensor") to execute the above License
Agreement, the undersigned, jointly and severally, hereby unconditionally
warrant to Licensor and its successors and assigns that all of Licensee's
representations in the License Agreement and the application submitted by
Licensee to obtain the License Agreement are true and guarantee that all of
Licensee's obligations under the above License Agreement, including any
amendments thereto whenever made (the "Agreement"), will be punctually paid and
performed.

Upon default by Licensee or notice from Licensor, the undersigned will
immediately make each payment and perform each obligation required of Licensee
under the Agreement. Without affecting the obligations of the undersigned under
this Guaranty, Licensor may without notice to the undersigned extend, modify or
release any indebtedness or obligation of Licensee, or settle, adjust or
compromise any claims against Licensee. The undersigned waive notice of
amendment of the Agreement and notice of demand for payment or performance by
Licensee.

Upon the death of an individual guarantor, the estate of such guarantor will be
bound by this Guaranty but only for defaults and obligations hereunder existing
at the time of death, and the obligations of the other guarantors will continue
in full force and effect.

The Guaranty constitutes a guaranty of payment and performance and not of
collection, and each of the guarantors specifically waives any obligation of
Licensor to proceed against Licensee on any money or property held by Licensee
or by any other person or entity as collateral security, by way of set off or
otherwise. The undersigned further agree that this Guaranty shall continue to be
effective or be reinstated as the case may be, if at any time payment or any of
the guaranteed obligations is rescinded or must otherwise be restored or
returned by Licensor upon the insolvency, bankruptcy or reorganization of
Licensee or any of the undersigned, all as though such payment has not been
made.

This Guaranty shall be governed and construed under and in accordance with the
laws of the State of Tennessee.

IN WITNESS WHEREOF, each of the undersigned has signed this Guaranty as of the
date of the above Agreement. Witnesses.

Witnesses:                              Guarantors:

                                        FelCor Suites Limited Partnership

                                        By:     FelCor Suite Hotels, Inc.

----------------------------------                 -----------------------------

                                                   -----------------------------

                                        By:     FelCor Suite Hotels, Inc.

----------------------------------                 -----------------------------

                                                   -----------------------------

                                       16
<PAGE>

                       ATTACHMENT A-PERFORMANCE CONDITIONS

                               CHANGE OF OWNERSHIP

A.       CONSULTATION. Licensee or its representative(s) shall meet with
         Licensor at a location selected by Licensor, within 45 days following
         the date of Licensee's receipt of a request from Licensor for
         consultation and coordination with the project manager assigned to
         Licensee by Licensor.

B.       WORK AND PURCHASE REQUIREMENT. Attachment C, the Product Improvement
         Plan (the "PIP"), is incorporated by reference, attached to and made a
         part of this Agreement. Licensee shall perform the renovation and/or
         construction work and purchase the items described on the PIP (the
         "Work") on or before the completion date specified on the Rider.
         Whether or not indicated on the PIP, the Work shall include Licensee's
         purchasing and/or leasing and installing all fixtures, equipment,
         furnishings, furniture, signs, computer terminals and related
         equipment, supplies and other items which would be required of a new
         Embassy Suites licensee under the Manual and such other equipment,
         furnishings and supplies as may be required by Licensor in order to
         operate the Hotel. Licensee shall be solely responsible for obtaining
         all necessary licenses, permits and zoning variances required for the
         Hotel.

C.       APPROVAL OF ARCHITECT/ENGINEER AND CONTRACTOR. Licensor shall have the
         right to approve the architect/engineer, general contractor and major
         subcontractors for the Work. The Work shall not commence until such
         approval has been granted, which approvals may be conditioned on
         bonding of the contractors. Prior to commencement of the Work, if
         requested by Licensor, Licensee shall submit to Licensor, resumes and
         financial statements of the architect/engineer, general contractor and
         any major sub-contractors for the Work and such additional information
         concerning their experience and financial responsibility as Licensor
         may request.

D.       APPROVAL OF PLANS. On or before the Plans submission date specified on
         the Rider, Licensee shall submit to Licensor, Licensee's plans and
         specifications and drawings for the Work, including the proposed
         furnishings, fixtures, equipment and signs (collectively, "Plans") for
         approval. Once Licensor has approved the Plans, no change shall be made
         to the Plans without the advance consent of Licensor. In approving the
         Plans, Licensor does not in any manner warrant the depth of its
         analysis or assume any responsibility for the efficacy of the Plans or
         the resulting construction. Licensee shall cause the Hotel renovation
         and/or construction to be in accordance with this Agreement, the
         approved Plans, the Manual and the PIP.

E.       COMMENCEMENT; COMPLETION. Licensee shall commence the Work on or before
         the date specified on the Rider and shall continue the Work
         uninterrupted (except for interruption by reason of events constituting
         force majeure) until it is completed. Notwithstanding the occurrence of
         any events constituting force majeure, or any other cause, the Work
         shall be completed and the Hotel shall be furnished, equipped, and
         shall otherwise be in compliance with this Agreement not later than the
         date specified on the Rider. Licensor shall have the sole right to
         determine whether the Work has been completed in accordance with this
         Agreement, the approved Plans, the Manual and the PIP.

F.       INSPECTION. During the course of the Work, Licensee shall, and Licensee
         shall cause the architect, engineer, contractors, and subcontractors to
         cooperate fully with Licensor for the purpose of permitting Licensor to
         inspect the Hotel in order to determine whether the Work is being done
         in accordance with this Agreement and shall provide Licensor with
         samples of construction materials, etc. as Licensor may request.

G.       REPORTS. Licensee shall submit to Licensor each month after the date
         hereof (or more frequently if Licensor shall so request) a report
         showing progress made toward fulfilling the terms of this Agreement.

H.       ACQUISITION OF EQUIPMENT, FURNISHINGS, AND SUPPLIES/STAFFING. Licensee
         shall order, purchase and/or lease and install all fixtures, equipment,
         furnishings, furniture, signs, computer terminals and related
         equipment, supplies and other Items required by Licensor, this
         Agreement, the approved Plans, the Manual and the PIP.

         In accordance with the Manual and such other instructions as are
         furnished to Licensee by Licensor, Licensee shall cause to be hired a
         staff to operate the Hotel, and all such personnel shall be trained as
         required by the Manual. All costs and expenses incurred directly or
         indirectly in hiring and training such staff shall be paid by Licensee,
         except as expressly provided otherwise in the Manual.

<PAGE>

I.       COST OF CONSTRUCTION AND EQUIPPING. Licensee shall bear the entire cost
         of the Work, Including the cost of the plans, professional fees,
         licenses and permits, equipment, furniture, furnishIngs and supplies.

J.       LIMITATION OF LIABILITY. Notwithstanding the right of Licensor to
         approve the Plans, the architect, engineer and certain contractors, and
         to inspect the Work and the Hotel, Licensor shall have no liability or
         obligation with respect to the Work, or the design and construction of
         the Hotel, as the rights of Licensor are being exercised solely for the
         purpose of assuring compliance with the terms and conditions of this
         Agreement. Licensor does not undertake to approve the Hotel as
         complying with governmental requirements or as being safe for guests or
         other third parties. Licensee should not rely upon Licensor's approval
         for any purpose whatsoever except compliance with Licensor's then
         prevailing standards and requirements of the Manual.

K.       CONDITIONAL AUTHORIZATION. Licensor may conditionally authorize
         Licensee to continue to operate the Hotel as an Embassy Suites hotel
         even though Licensee has not fully complied with the terms of this
         Agreement. Under certain circumstances, Licensor may suspend services
         to the Hotel (including reservation services) while the Work is being
         performed by Licensee.

L.       PERFORMANCE OF AGREEMENT. Licensee agrees to satisfy all of the terms
         and conditions of this Agreement, and to equip, supply and staff the
         Hotel in accordance with this Agreement and to cooperate with Licensor
         in connection therewith. As a result of Licensee's efforts to comply
         with the terms and conditions of this Agreement, Licensee will incur
         substantial expense and expend substantial time and effort. Licensee
         acknowledges and agrees that Licensor shall have no liability or
         obligation to Licensee for any losses, obligations, liabilities or
         expenses incurred by Licensee if this Agreement is terminated because
         Licensee has not complied with the terms and conditions of this
         Agreement.

                                        2

<PAGE>

                                  ATTACHMENT B
                           RIDER TO LICENSE AGREEMENT

<Table>
<S>                                                     <C>
Name and Address of Licensee:                           ________________________________________
                                                        c/o FelCor Suite Hotels, Inc.
                                                        545 E. John Carpenter Freeway, Suite 1300
                                                        Irving, Texas 75062-3933

Location of Hotel:                                      2727 Stemmons Freeway
                                                        Dallas, Texas 75207

Number of Approved Guest Suites:

Term of License to Expire:                              20 years from closing on the purchase of the Hotel

Plans submission date
         Preliminary Plans:
         Upgrading Plans and Specifications:            Within 30 days of closing on the purchase of the Hotel

Construction or Work commencement date:                 Upon closing on the purchase of the Hotel

Construction or Work Completion date:                   Within the time frames established in the Product Improvement
                                                        Plan

Additional Requirements:                                Within 30 days of closing, Licensee shall provide Licensor with
                                                        a copy of the lease agreement between FelCor Suites Limited
                                                        Partnership and DJONT Leasing, L.L.C.

Agreement expiration date:
(Paragraph 17}

Ownership of Licensee:
</Table>

<PAGE>

                                   EXHIBIT "B"

                               DEAL SPECIFIC TERMS

Term:

Initial Minimum Balance for the Bank Account(s) for the Hotel:

Initial Lessee's Representative:

Disbursement Schedule:

                                       B-1

<PAGE>

Notices:    Lessee:                               Manager:
            545 East John Carpenter Freeway       ____________________________
            Suite 1300
            Irving, Texas 75062-3933
            Fax: (214) 444-4949
            Attn:

            with a copy to:
                                                  ______________________________

PERFORMANCE TEST; TERMINATION RIGHTS:

         A. Lessee shall have the right to terminate this Agreement if,
beginning in the first full calendar year of Hotel operations, Manager fails to
achieve, in any two consecutive calendar years, a Gross Operating Profit which
is at least eighty percent (80%) of the amount set forth in the respective
annual Operating Budget for Gross Operating Profit ("Budgeted GOP") provided,
however, that if within sixty (60) days of receipt of a notice from Lessee that
Lessee intends to terminate this Agreement, Manager pays in cash to Lessee the
difference between the achieved Gross Operating Profit and ninety percent (90%)
of the Budgeted GOP (hereinafter referred to as a "Fund Up Cure") for the second
of the two consecutive calendar years in which shortfalls occurred, then Lessee
shall not be entitled to terminate this Agreement. Notwithstanding such Fund Up
Cure of the second calendar year, if there is a failure to reach eighty percent
(80%) of Budgeted GOP in a third consecutive calendar year, no Fund Up Cure
shall be available. If Lessee is entitled to and elects to terminate this
Agreement, Lessee shall give written notice to Manager within ninety (90) days
following delivery to Lessee of the annual financial statements for the calendar
year. If such notice is not provided by Lessee to Manager within such ninety-day
(90) period, Lessee shall be deemed to have waived its right hereunder to
terminate this Agreement with respect to the calendar year as to which the
failure occurred. In the event Lessee has the right to terminate with respect to
a calendar year but waives such right, Lessee's right to terminate shall carry
forward and shall be applicable to the next succeeding calendar year if Manager
fails to achieve eighty percent (80%) of Budgeted GOP for the next succeeding
year. For purposes of this paragraph, the term "Gross Operating Profit" shall
mean the amount, if any, by which Adjusted Gross Revenues for any calendar year
exceed Operating Costs for such calendar year.

         B. In the event there is a Change in Control of Manager which satisfies
the requirements of Section 9.06(c) of this Agreement, (i) the required level of
performance contemplated in paragraph A above shall be increased from eighty
percent (80%) to ninety percent (90%), and (ii) the Fund Up Cure shall be an
amount equal to the difference between the achieved Gross Operating Profit and
one hundred percent (100%) of Budgeted GOP.

                                       B-2

<PAGE>

         C. The provisions of paragraphs A and B above shall not apply in any
calendar year in which the operation of the Hotel, or the use of the Hotel's
facilities, are significantly disrupted by casualty loss, strike, eminent
domain, or other events of Force Majeure that are beyond the reasonable control
of Manager, or major repairs to or refurbishment of the Hotel. In the event
Lessee exercises the right of termination contemplated in paragraph A or B
above, Lessee shall have no obligation to pay any termination fee or other
damages to Manager as a consequence of such termination except that Lessee shall
be liable to Manager and shall pay immediately upon such termination all fees
earned and other amounts and expenses payable or reimbursable to Manager
pursuant to this Agreement.

                                       B-3

<PAGE>

                                   EXHIBIT "C"

                                 MANAGEMENT FEES

         1. Defined Terms. Certain capitalized terms in this Exhibit "C" are
defined in Paragraph 6 below; other capitalized terms have the meaning given
such terms herein or in the Agreement.

         2. Basic Management Fee. Commencing with the Commencement Date, and
continuing during the Term of this Agreement, Lessee shall pay to Manager a
basic management fee (the "Basic Management Fee"). The Basic Management Fee
shall be payable monthly in an amount equal to two percent (2%) (such
percentage is referred to herein as the "Applicable Percentage") of Adjusted
Gross Revenues.

         3. Incentive Management Fee. Commencing with the Commencement Date, and
in addition to the Basic Management Fee, Manager shall be paid an incentive
management fee (the "Incentive Management Fee") in an amount equal to fifty
percent (50%) of Income Before Lessees Overhead Expenses, up to a maximum of
two percent (2%) of Adjusted Gross Revenues. The Incentive Management Fee
shall be payable monthly at the same time the Basic Management Fee is due and
payable.

         Notwithstanding anything to the contrary contained herein or in that
certain Management Agreement _____________________________________ of even date
by and between Manager and Lessee related to the ______________________________
___________________________________________________________________________, the
sum of (i) the Incentive Management Fee payable pursuant to this Agreement plus
(ii) the Incentive Management Fee as defined in, and payable pursuant to, the
Syracuse Management Agreement, shall not exceed either:

         (A)      Fifty percent (50%) of the sum of (i) the Income Before
                  Lessees Overhead Expenses plus (ii) the Income Before Lessees
                  Overhead Expenses as defined in the ________________________
                  Agreement, or

         (B)      Two percent (2%) of the sum of (i) the Adjusted Gross Revenues
                  plus (ii) the Adjusted Gross Revenues as defined in the
                  Syracuse Management Agreement.

         4. Books and Records. Manager shall maintain in the books and records
of the Hotel all Management Fees that have been paid and shall set forth therein
the accrual of all Management Fees that have been earned but are not yet due and
payable.

         5. Proration. With respect to any calculation in this "Exhibit C" that
is based on a Term Year, such calculation shall be prorated for any partial Term
Year based on the actual number of days elapsed in such partial Term Year that
is applicable to the calculation.

         6. Definitions:

         The term "Adjusted Gross Revenues" shall mean Gross Revenues less the
following revenues actually received by the Hotel and included in Gross
Revenues: (i) any gratuities or service charges added to a customer's bill; (ii)
any credits or refunds made to customers, guests or patrons; (iii) any sums and

                                       C-1

<PAGE>

credits received by Lessee for lost or damaged merchandise; (iv) any sales
taxes, excise taxes, gross receipt taxes, admission taxes, entertainment taxes,
tourist taxes or charges; (v) any proceeds from the sale or other disposition of
the Hotel, furnishings and equipment or other capital assets; (vi) any fire and
extended coverage insurance proceeds; (vii) any condemnation awards; (viii) any
proceeds of financing or refinancing of the Hotel; and (ix) any interest on the
Bank Account(s) and the Operating Deficit Account.

         The term "Excluded Lease Charges" shall mean all of the following: (i)
late charges, penalties, fines, interests and cost associated with or
attributable to non-payment or late payment of any obligation of Lessee or the
Partnership; (ii) damages and liabilities (including legal fees and other legal
costs) arising out of any default by Lessee or the Partnership under the
Percentage Lease, the Management Agreement, the License Agreement any of the
Financing Documents or any obligation owed to a third party; (iii) payments or
liabilities arising under any indemnification obligation contained in the
Percentage Lease; (iv) any cost or expense included in the calculation of
Operating Costs; (v) payments made or costs incurred in connection with the
exercise of any purchase option contained in the Percentage Lease; and (vi)
appraisal costs contained in Article XXXIII of the Percentage Lease.

         The term "Gross Revenues" shall be defined as all revenues and income
of any nature derived directly or indirectly from the Hotel or from the use or
operation thereof, whether on or off the site, including total room sales, food
and beverage sales, if any, laundry, telephone, telegraph and telex revenues,
other income, rental or other payments from lessees, sublessees, licensees and
concessionaires (but not the gross receipts of such lessees, sublessees,
licensees or concessionaires) and the proceeds of business interruption, use,
occupancy or similar insurance.

         The term "Income Before Lessee's Overhead Expenses" shall mean Adjusted
Gross Revenues less the sum of (i) Operating Costs, (ii) lease payments under
Qualifying Capital Leases, and (iii) Percentage Lease Payments; provided,
however, in calculating Income Before Lessee's Overhead Expenses in deduction
shall be made for (a) deposits into the Operating Deficit Account, (b) debt
service on any borrowings of Lessee or the Partnership, (c) deposits into the
Reserve Account, (d) Partnership Costs (as defined in Section 3.01(a) above) or
(e) administrative and general overhead expenses of Lessee.

         The term "New Hotel" shall mean any Other Hotel and any other hotels
with respect to which Lessee acquires a fee simple or leasehold interest after
the Effective Date.

         The term "Operating Costs" shall mean the entire cost and expense of
maintaining, operating and supervising the operation of the Hotel. Operating
Costs shall be the sum of such costs and expenses which are normally charged as
a cost of operation under standard accounting practices of Manager, including
but not limited to: (i) the Management Fee; (ii) all amounts payable to Manager
under the License Agreement; (iii) all reimbursable expenses due Manager; (iv)
the cost of operating equipment and operating supplies, wages, salaries and
employee fringe benefits, advertising and promotional expenses, the cost of
personnel training programs, utility and energy costs, operating licenses and
permits, grounds and landscaping maintenance costs and equipment rentals
approved by Manager as an Operating Cost; (v) all expenditures made for
maintenance and repairs to keep the Hotel in good condition and repair,
specifically excluding capitalized expenditures for capital replacements; and
(vi) premiums and charges

                                       C-2

<PAGE>

on the insurance coverages specified on Exhibit "D" incurred after the
Commencement Date. Operating Costs do not include Ownership Costs.

         The term "Ownership Costs" shall mean (i) depreciation of the Hotel,
furnishings, fixtures and equipment; (ii) rental pursuant to a ground lease, if
any, or any other lease payments; (iii) debt service (interest and principal) on
any mortgage(s) encumbering the Lessee's leasehold estate or the Partnership's
fee estate in the Hotel; (iv) property taxes and assessments; (v) amortization
of pre-opening expenses; (vi) expenditures for capital replacements (to the
extent actually capitalized rather than expensed); (vii) audit, legal and other
professional or special fees; (viii) premiums for casualty insurance coverages
specified in Exhibit "D" (ix) equipment rentals for capitalized leases; (x)
administrative and general expenses and disbursements of Owners, including
compensation of employees of Owners; (xi) Federal, State and local Franchise and
Income Taxes; (xii) amortization of bond discounts and mortgage expenses; (xiii)
such other costs or expenses which are normally treated as "Ownership Costs"
under the standard accounting practices of Manager (which are in accordance with
generally accepted accounting principles and are substantially similar to the
Hotel and Motel Standard System of Accounts); (xiv) deposits into the Operating
Deficit Account; and (xv) deposits into the Reserve Fund.

         The term "Percentage Lease Payments" shall mean payments of Base Rent,
Percentage Rent and other regularly scheduled payments or charges required to be
paid by Lessee under the Percentage Lease to the extent such payments relate to
the ownership and operation of the Hotel, excluding, however, Excluded Lease
Charges.

         The term "Qualifying Capital Leases" shall mean leases of equipment and
other personal property that are capital in nature and are typically leased
rather than purchased by Manager in Embassy Suites hotels owned by Manager.

         The term "Term Year" shall mean (i) with respect to the first Term
Year, the period ending on the last day of the twelfth full calendar month after
the Commencement Date, and (ii) with respect to each other Term Year, a
twelve-month period ending on the applicable anniversary date of the first Term
Year.

                                       C-3

<PAGE>

                                   EXHIBIT "D"

                                    INSURANCE

         In accordance with Section 3.01(o), Manager, on behalf of Lessee and at
Lessee's expense, shall procure the insurance coverages hereinafter set forth
and ensure that they are in full force and effect on the Commencement Date and
that they remain in full force and effect throughout the Term of this Agreement.
All cost(s) and expense(s) incurred by Manager in procuring the following
insurance coverages shall be Operating Costs and shall be paid from the Bank
Account(s):

Coverages:                                      Amounts Of Insurance:

        Workers' Compensation                         Statutory

        Employer's Liability                       $1,000,000

        Fidelity (Employee Dishonesty)                As required

        Money and Securities                       As required

        Builders Risk                           Completed value of the Hotel

                  All risk for term of the initial and any subsequent Hotel
                  construction and renovation

        Real and Personal Property              100% replacement value of
                                                        building and contents

                  Blanket Coverage
                  Replacement Cost - All risk (including fire and earthquake)
                  Boiler Machinery - written on a comprehensive form

        Business Interruption                   Calculated yearly based on
                                                        estimated Hotel revenues

                  Blanket Coverage for the perils insured against under Real and
                  Personal Property in this Exhibit "D." This coverage shall
                  specifically cover Manager's loss of Management Fees. The
                  business interruption insurance shall be for a twelve (12)
                  month indemnity period.

         Owner's Protective Liability           $5,000,000

                                       D-1

<PAGE>

                  All risks from construction and renovation occurring prior to
                  the Commencement Date and all risks from Hotel construction
                  and renovation projects costing more than $250,000 occurring
                  after the Commencement Date

         Comprehensive General Liability            $10,000,000 per location

                  Including -

                  Premises - Operations
                  Products/Completed Operations
                  Contractual
                  Personal Injury
                  Liquor Liability/Dram Shop (if applicable)
                  Elevators and Escalators

         Automobile Liability                       $10,000,000

                  Owned Vehicles
                  Non-Owned Vehicles
                  Uninsured Motorist where required by statute

         Automobile Physical Damage (Optional)

                  Comprehensive                     (To value if insured)
                  Collision

         All insurance coverages provided for under this Exhibit "D" shall be
effected by policies issued by insurance companies (i) that are authorized to do
business in the state in which the Hotel is located; and (ii) that are of good
reputation and of sound and adequate financial responsibility, having a Best
Rating of B + VI, or better, or a comparable rating if Best ceases to publish
its ratings or materially changes its rating standards or procedures.

         Lessee hereby authorizes Manager to utilize the services of and/or
place the insurance set forth in this Exhibit "D" with (i) any subsidiary or
affiliated company of Promus or its successor corporation in the insurance
business as Manager deems appropriate; or (ii) a third party insurance carrier,
in each case meeting the specifications set forth above.

         Manager shall deliver to Lessee duly executed certificates, and, if
requested by Lessee and if available, duplicate copies of all policies of
insurance to be procured hereunder, including existing, additional and renewal
policies.

         Each policy of insurance maintained in accordance with this Exhibit "D"
to the extent obtainable, shall specify that such policies shall not be canceled
or materially changed without at least thirty (30) days prior written notice to
Lessee and Manager.

                                       D-2

<PAGE>

         Except as otherwise provided in the Agreement, Manager and Lessee each
waives, releases and discharges the other, but only to the extent of collectible
insurance proceeds, from all claims or demands which each may have or acquire
against the other or the other's subsidiaries, affiliates, directors, officers,
agents, employees, independent contractors or partners, with respect to any
claims for any losses, damages, liabilities or expenses (including attorneys'
fees) incurred or sustained by either of them on account of injury to persons or
damage to property or business arising out of the ownership, management,
operation and maintenance of the Hotel, regardless whether any such claim or
demand may arise because of the fault or negligence of the other party or its
subsidiaries, affiliates, officers, employees, directors, agents or independent
contractors. Each policy of insurance maintained in accordance with this Exhibit
"D" shall contain a specific waiver of subrogation reflecting the above.

         All policies of insurance provided for under this Exhibit "D" shall be
carried in the name of the Owners and Manager, and losses thereunder shall be
payable to the parties as their respective interests may appear. All liability
policies shall name the Lessee and Manager, and in each case any of their
affiliated or subsidiary companies which they may specify, and their respective
directors, officers, agents, employees and partners as additional named
insureds.

         All such policies of insurance shall be written on an "occurrence"
basis to the extent obtainable.

         Either Manager or Lessee, by notice to the other, shall have the right
to require that the minimum amount of insurance to be maintained with respect to
the Hotel under this Exhibit "D" be increased to make such insurance comparable
with prudent industry standards and to reflect increases in liability exposures,
taking into account the size and location of the Hotel.

                                       D-3

<PAGE>

                                   EXHIBIT "E"
                                  OTHER HOTELS

                                      E-1

<PAGE>

                                      E-2<PAGE>

                                                                    EXHIBIT 10.6

                                    FORM OF

                              MANAGEMENT AGREEMENT

                                      for

         FELCOR'S DOUBLETREE AND DOUBLETREE GUEST SUITES BRANDED HOTELS

<PAGE>

                                      INDEX

<Table>
<Caption>
                                                                                 Page
                                                                                 ----
<S>        <C>                                                                  <C>

ARTICLE I DEFINITIONS ..........................................................   1
    1.01   Definitions .........................................................   1
    1.02   Other Definitions ...................................................   5

ARTICLE 2 SCOPE OF AGREEMENT ...................................................   6
    2.01   Subject Matter ......................................................   6
    2.02   Grant to Manager ....................................................   6
    2.03   Funding .............................................................   7

ARTICLE 3 TERM AND EXTENSIONS ..................................................   7
    3.01   Commencement Date ...................................................   7
    3.02   Term ................................................................   7
    3.03   Owner's Termination Right Upon Sale of Hotel ........................   7
    3.04   Performance Termination .............................................   8
    3.05   Post-Termination Matters; Reimbursements to Manager .................  10

ARTICLE 4 NONDISTURBANCE .......................................................  10

ARTICLE 5 STANDARDS AND MANAGER'S CONTROL ......................................  10
    5.01   Operational Standards ...............................................  10
    5.02   Manager Control .....................................................  11
    5.03   Contractual Authority ...............................................  11

ARTICLE 6 USE OF MANAGER'S TRADENAME ...........................................  11
    6.01   Use of Name .........................................................  11
    6.02   Definition of Marks .................................................  12
    6.03   Disputes Concerning Marks ...........................................  12
    6.04   Rights Upon Termination .............................................  12

ARTICLE 7 OPERATION OF THE HOTEL ...............................................  13
    7.01   Permits .............................................................  13
    7.02   Operating Equipment and Operating Supplies ..........................  13
    7.03   Personnel ...........................................................  13
    Z.04   Sales, Marketing, Advertising and Additional Promotional Programs ...  14
    7.05   Trades; Treatment Accorded ..........................................  15
    7.06   FF&E Replacements ...................................................  15
    7.07   Routine Maintenance and Repairs .....................................  16
    7.08   Capital Repairs .....................................................  16
    7.09   FF&E and Capital Repairs Estimates ..................................  17
    7.10   Emergency Repairs; Repairs Required by Law ..........................  17
    7.11   Replacement Reserve Fund ............................................  17
    7.12   Capital Improvements ................................................  18
</Table>

                                      -i-
<PAGE>

<Table>
<Caption>
                                                                                 Page
                                                                                 ----
<S>        <C>                                                                  <C>

ARTICLE 8 FISCAL MATTERS .......................................................  18
    8.01   Accounting Matters and Fiscal Periods ...............................  18
    8.02   Annual Business Plan ................................................  19
    8.03   Bank Accounts .......................................................  21
    8.04   Reimbursement of Out-of-Pocket Expenses .............................  21

ARTICLE 9 ADDITIONAL SERVICES ..................................................  22
    9.01   Additional Services .................................................  22
    9.02   Centralized Services ................................................  22
    9.03   National Sales, Business Promotion and Reservations Services ........  23
    9.04   Other Services ......................................................  24

ARTICLE 10 PAYMENTS TO MANAGER .................................................  24
    10.01  Base Management Fee .................................................  24

ARTICLE 11 DISBURSEMENTS .......................................................  25
    11.01  Disbursement of Funds ...............................................  25
    11.02  Adjustment to Bank Account ..........................................  26

ARTICLE 12 INSURANCE ...........................................................  26
    12.01  Insurance Coverage ..................................................  26
    12.02  Insurance Policies ..................................................  26
    12.03  Manager's Blanket Insurance Coverage ................................  27

ARTICLE 13 RESPONSIBILITY FOR CLAIMS, ETC. .....................................  28
    13.01  Scope ...............................................................  28

ARTICLE 14 CASUALTY AND CONDEMNATION ...........................................  28
    14.01  Casualty ............................................................  28
    14.02  Condemnation ........................................................  29
    14.03  Business Interruption Insurance .....................................  29

ARTICLE 15 DEFAULT AND TERMINATION .............................................  30
    15.01  Events of Default ...................................................  30
    15.02  Termination .........................................................  30

ARTICLE 16 NOTICES .............................................................  31
    16.01  Procedure ...........................................................  31

ARTICLE 17 RELATIONSHIP, AUTHORITY AND FURTHER ACTIONS .........................  31
    17.01  Relationship ........................................................  31
    17.02  Further Actions .....................................................  31

ARTICLE 18 APPLICABLE LAW ......................................................  31
</Table>

                                      -ii-
<PAGE>

<Table>
<Caption>
                                                                                 Page
                                                                                 ----
<S>        <C>                                                                  <C>

ARTICLE 19 SUCCESSORS AND ASSIGNS ..............................................  32
    19.01  Assignment ..........................................................  32
    19.02  Binding Effect ......................................................  32

ARTICLE 20 AGREEMENT NOT AN INTEREST IN REAL ESTATE ............................  32

ARTICLE 21 FORCE MAJEURE .......................................................  32
    21.01  Operation of Hotel ..................................................  32
    21.02  Extension of Time ...................................................  33

ARTICLE 22 ARBITRATION .........................................................  33
    22.01  Arbitration Procedures ..............................................  33

ARTICLE 23 GENERAL PROVISIONS ..................................................  33
    23.01  Authorization .......................................................  33
    23.02  Interest ............................................................  34
    23.03  Formalities .........................................................  34
    23.04  Documents ...........................................................  34
    23.05  Consents ............................................................  34
    23.06  Estoppel Certificate ................................................  34
    23.07  Extension of Date of Termination ....................................  35
    23.08  Hotel Reservations Honored ..........................................  35
    23.09  No Representations ..................................................  35

Exhibit 1 ......................................................................  37
Exhibit A - Legal Description ..................................................  38
Exhibit B - [Intentionally Deleted] ............................................  39
Exhibit C - Schedule of Permitted Mortgages ....................................  40
Exhibit D - [Intentionally Deleted] ............................................  41
Exhibit E - Schedule of Required Insurance .....................................  42
</Table>

                                     -iii-
<PAGE>

                              MANAGEMENT AGREEMENT

         THIS AGREEMENT is dated effective as of the Execution Date, by and
between ___________________________________________ and _______________________.
Each reference in this Agreement to any of the terms and titles contained in any
Exhibit attached to this Agreement shall be deemed and construed to incorporate
herein the data stated under that term or title in such Exhibit.

                                   WITNESSETH:

         WHEREAS, Owner is desirous of having Manager operate Owner's hotel as a
hotel under the Tradename on the parcel or parcels of land more particularly
described on Exhibit A attached hereto; and

         WHEREAS, Manager (or its Affiliates) owns all right, title and interest
in and to the Tradename, said Tradename being a registered service mark of
Manager (or its Affiliates);

         NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, Owner and Manager agree as follows:

                                    ARTICLE 1
                                   DEFINITIONS

         1.01 DEFINITIONS

         As used herein the following terms shall have the respective meanings
indicated below:

         (a) Hotels - The __________________________ hotels owned by
Holdings in __________________________________________________________________
_________________________________.

         (b) Affiliate - any corporation or other entity controlled by,
controlling or under common control with Owner or Manager, as applicable. The
words "control," "controlled" and "controlling" mean ownership, directly or
indirectly, of 50% or more of the legal or beneficial ownership interest of such
corporation or other entity.

         (c) Affiliated Hotels - all hotels operating under the tradenames _____
____________________________________________________________________________
________________________________________ and/or any other tradename(s) now or
hereafter utilized by Manager or its Affiliates, including, without limitation,
hotels operated by Manager or its Affiliates and hotels operated by others under
franchise arrangements with Manager or its Affiliates.

         (d) Building - all buildings, structures and improvements now located
or hereafter constructed on the Site and all fixtures and equipment attached to,
forming a part of and necessary for the operation of such buildings, structures
or improvements as a hotel (including, without limitation, heating, lighting,
plumbing, sanitary system, air-conditioning, laundry, refrigeration, kitchen,
elevators and similar items) and such (i) restaurants, bars and banquet, meeting
and other

                                      -1-
<PAGE>

public areas, (ii) commercial space, including concessions and shops, (iii)
garage and parking space, (iv) storage and service areas, (v) recreational
facilities and areas, (vi) public grounds and gardens, (vii) permanently affixed
signage, (viii) other facilities and appurtenances and (ix) number of keyed
guest rooms ("Keyed Guest Rooms") as presently exist on the Site or are
hereafter added thereon during the Term.

         (e) FF&E - all fixtures, furniture, furnishings and equipment (not
including Operating Equipment) required for the operation of the Building as a
hotel in accordance with the standards set forth in this Agreement, including,
without limitation, (i) office furnishings and equipment, (ii) specialized hotel
equipment necessary for the operation of any portion of the Building as a hotel,
including equipment for kitchens, laundries, dry cleaning facilities, bars,
restaurants, public rooms, commercial and parking space, and recreational
facilities, and (iii) all other furnishings and equipment as Manager deems
necessary or desirable for the operation of the Building as a hotel in
accordance with the Operational Standards.

         (f) GAAP - generally accepted accounting principals, consistently
applied.

         (g) Gross Room Sales - that portion of Total Sales which is derived
from the sale or rental of guest rooms and suites.

         (h) Hotel - a collective term for the Site, the Building, the FF&E, the
Operating Equipment and the Operating Supplies.

         (i) Hotel Lease - the Lease Agreement of even date herewith between
__________________________________ and Owner relating to the Hotel.

         (j) Index - the Consumer Price Index for All Urban Consumers (1982-84 =
100) as published by the United States Bureau of Labor Statistics, U.S. City
Average. If the compilation and/or publication of such Index shall be
discontinued or transferred to any other governmental department or bureau or
agency, Manager shall (subject to Owner's approval, which shall not be
unreasonably withheld) fix an alternate index or method to implement the
parties' intention that the purchasing power of the amounts to be adjusted by
reference to the Index (as hereinafter provided in this Agreement) shall be the
same as the purchasing power of the stated amounts as of the Execution Date.
Likewise, if such Index shall be modified as to components, computing methods or
otherwise, then Manager may (subject to Owner's approval, which shall not be
unreasonably withheld) fix an alternate index or method, as aforesaid, or
Manager may utilize an appropriate conversion factor so as to achieve
substantially the same result as would have been obtained if the Consumer Price
Index in effect and as computed, calculated and constituted on the Execution
Date were still then in effect.

         (k) Mortgagee - The holder of any Permitted Mortgage.

         (1) Net Operating Income - Total Sales less the sum of (i) Operating
Costs and (ii) Specified Fixed Charges. There shall be excluded from Operating
Costs (A) expenses for gratuities, service charges, sales and gross receipts
taxes and other similar taxes and assessments, to

                                      -2-
<PAGE>

the extent that receipts in respect thereof are excluded from Total Sales, and
(B) any overhead or other costs of Owner incurred as a result of being the
lessee under the Hotel Lease.

         (m) Operating Cost(s) - the entire cost and expense of maintaining,
operating and supervising the operation of the Hotel. Operating Costs shall be
the sum of such costs and expenses which are normally charged as a cost of
operation under GAAP, including, without limitation,

                  (i)      the cost of Operating Supplies and Operating
                           Equipment;

                  (ii)     wages, salaries, employee fringe benefits, payroll
                           taxes, bonuses and other costs related to employees
                           at the Hotel;

                  (iii)    advertising and promotional expenses incurred
                           directly by the Hotel, administrative and general
                           expenses of the Hotel, the cost of Centralized
                           Services under Article 9.02, the cost of personnel
                           training programs (without duplication of those
                           included in Centralized Services), charges for
                           reservation-related distribution systems (e.g.,
                           airline reservation systems), utility and energy
                           costs, operating licenses and permits, and grounds
                           and landscaping maintenance costs;

                  (iv)     all expenditures made for routine maintenance and
                           repairs to keep the Hotel in good condition and
                           repair;

                  (v)      the Base Management Fee provided for in Article
                           10.01(a) and the National Sales, Business Promotion
                           and Reservations Services Assessment provided for in
                           Article 9.03; (vi) all reimbursable expenses due
                           Manager;

                  (vi)     all reimbursable expenses due Manager;

                  (vii)    liability insurance premiums and premiums for other
                           insurance to be carried by Manager pursuant to the
                           requirements of Article 12 and Exhibit E;

                  (viii)   reasonable reserves for uncollectible accounts
                           receivable as set forth in the Approved Budgets; and

                  (ix)     credit card and travel agent commissions.

There shall be expressly excluded from Operating Costs the following costs and
expenses of the Hotel, which shall be defined as "Fixed Charges":

                  (i)      depreciation of the Building, FF&E and Operating
                           Equipment, and amortization of financing costs,
                           pre-opening expenses, organizational and other costs;

                  (ii)     debt service (interest and principal) on any
                           Permitted Mortgage;

                                      -3-
<PAGE>

                  (iii)    rental payments pursuant to any ground lease
                           (including the Hotel Lease);

                  (iv)     the cost of external (third-party) audits (whether
                           certified or otherwise) of Hotel operations and/or
                           with respect to the Owner entity itself;

                  (v)      legal and other professional fees, other than those
                           properly included in Operating Costs under GAAP;

                  (vi)     other recurring and non-recurring ownership costs,
                           such as Owner's entity administration and servicing
                           costs;

                  (vii)    Specified Fixed Charges; and

                  (viii)   such other cash expenditures (including Capital
                           Repairs) which are normally treated as a capital
                           expenditure under GAAP.

         (n) Operating Equipment - all operating equipment required for the
operation of a hotel, including chinaware, glassware, linens, silverware,
utensils, uniforms and all other similar items.

         (o) Operating Supplies - all consumable items used in the operation of
a hotel, including food and beverages, fuel, soap, cleaning materials, matches,
stationery and all other similar items.

         (p) Permitted Mortgage - any mortgage, pledge or encumbrance of or
other security interest in the Hotel or any part thereof or interest therein,
which is listed in Exhibit C attached hereto and incorporated by reference as a
part hereof or a copy of which shall hereafter be provided to Manager.

         (q) Portfolio Hotels - the Affiliated Hotels, any other hotels which
are owned, operated or managed by Manager or its Affiliates (regardless of
tradename) and any other hotel utilizing the Manager's Centralized Services or
National Sales, Business Promotion and Reservations Services.

         (r) Site -- the parcel or parcels of real estate more particularly
described on Exhibit A.

         (s) Specified Fixed Charges - the following cash expenditures made in
connection with the operation of the Hotel:

                  (1)      payments pursuant to any equipment leases or
                           installment sales contracts approved by Manager;

                  (2)      real estate and other ad valorem taxes and
                           assessments applicable to the Hotel; provided,
                           however, that for the purposes of determining Net
                           operating Income, real estate and other ad valorem
                           taxes and assessments shall be fixed the amounts paid
                           or payable in respect of the Hotel for Fiscal Year
                           1998 at

                  (3)      premiums for insurance required to be obtained or
                           maintained by Owner pursuant to the Hotel Lease; and

                                      -4-
<PAGE>

                  (4)      the 3% of Total Sales required to be deposited to the
                           Replacement Reserve Fund, as described in Article
                           7.11(a) below.

         (t) Total Sales - all revenues and income of any nature derived
directly or indirectly from the Hotel or from the use or operation thereof
including total room sales, food and beverage sales, telephone, telegraph,
telecopier and telex revenues, in-room video and valet service receipts, rental
or other payments from lessees and sublessees (but not the gross receipts of
such lessees and sublessees), and the proceeds of business interruption, use,
occupancy or similar insurance. If Manager itself operates any facilities
instead of having them operated by a lessee, such as a newsstand, gift shop or
other store, the gross receipts of such facility or store shall also be included
in Total Sales. There shall be excluded from Total Sales: (i) any gratuities or
service charges added to a customer's bill and distributed as compensation to
the Hotel's employees; (ii) any credits or refunds made to customers, guests or
patrons; (iii) any sums and credits received by Owner for lost or damaged
merchandise; (iv) any sales taxes, excise taxes, gross receipt taxes, admission
taxes, entertainment taxes, tourist taxes or charges; (v) any proceeds from the
sale or other disposition of the Hotel, FF&E, or other capital assets; (vi) any
interest paid with respect to the Replacement Reserve Fund, the Bank Account or
any other deposit or investment of Hotel funds; (vii) any fire and extended
coverage insurance proceeds; (viii) any condemnation awards; and (ix) any
proceeds of financing or refinancing of the Hotel. Total Sales shall be
determined on an accrual basis and in accordance with GAAP.

         1.02 OTHER DEFINITIONS

         As used herein, the following terms have the meanings set forth in the
respective Articles or Exhibits indicated below:

         Additional Program Charges - Article 7.04(c)
         Additional Services - Article 9.01
         Annual Business Plan - Article 8.02(b)(1)
         Approved Budget - Article 8.02(b)(1)
         Bank Account - Article 8.03(a)
         Base Management Fee - Article 10.01
         Capital Repairs - Article 7.08
         Capital Repairs Budget - Article 7.09
         Centralized Services - Article 9.02(a)
         Commencement Date - Article 3.01
         Defaulting Party - Article 15.02(a)
         Event of Default - Article 15.01
         Execution Date - Exhibit 1
         Executive Employees - Article 13.01(a)
         Extension Notice - Article 3.02
         FF&E Replacement Budget - Article 7.09
         FF&E Replacements - Article 7.06
         Fiscal Year - Article 8.01(c)
         Full Insurable Value - Exhibit E
         Holdings - Article 1.01(i)
         Hotel Lease - Article 1.01(i)

                                      -5-
<PAGE>

         Initial Term - Article 3.02
         Interested Persons - Article 23.06
         Keyed Guest Rooms - Article 1.01(d)
         Losses - Article 13.01(a)
         Manager - Exhibit 1
         Marks - Article 6.02
         Minimum Balance - Article 2.03(b)
         National Sales, Business Promotion and Reservations Services
         Assessment - Article 9.03(b)
         National Sales, Business Promotion and Reservations Services -
         Article 9.03(a)
         Non-Defaulting Party - Article 15.02(a)
         Number of Keyed Guest Rooms - Exhibit 1
         Operating Budget - Article 8.02(b)(1)
         Operational Standards - Article 5.01
         Option Term - Article 3.02
         Owner - Exhibit 1
         Project Services - Article 9.04(a)
         Replacement Reserve Fund - Article 7.11(a)
         Replacement Reserve Percentage - Article 7.11(a)
         Sale of the Hotel - Article 3.03(b)
         Sale Termination Notice - Article 3.03(a)
         Term - Article 3.02
         TPR Charges - Article 9.03(c)
         Tradename - Article 6.01

                                    ARTICLE 2
                               SCOPE OF AGREEMENT

         2.01 SUBJECT MATTER

         The subject matter of this Agreement is the Hotel referred to in
Exhibit 1.

         2.02 GRANT TO MANAGER

         Owner hereby grants to Manager the sole and exclusive right to
possession of the Hotel for the Term and during said Term the sole and exclusive
right to supervise and direct the management and operation of the Hotel for and
on the account of Owner, and Manager hereby accepts said grant and agrees that
it will supervise and direct the management and operation of the Hotel, all
pursuant to the terms of this Agreement. Manager acknowledges that this
Agreement is subject and subordinate to the Hotel Lease and that Manager, on
behalf of Owner and at Owner's sole expense, shall use its best efforts to
fulfill Owner's duties and obligations under the Hotel Lease. Owner agrees that
it will cooperate with Manager in every reasonable and proper way to permit and
assist Manager to carry out its duties hereunder. Owner and Manager further
agree that this Agreement provides for management in respect of the Hotel, that
Owner and Manager do not intend, nor does this Agreement grant or create, a
franchise within the meaning of the Federal Trade Commission Act, any rule or
regulation promulgated thereunder, or any other applicable law, rule, regulation
or judicial decision.

                                      -6-
<PAGE>

         2.03 FUNDING

         (a) Owner agrees to provide all funds, both initially and throughout
the Term, as shall be necessary to pay for all Operating Costs and Fixed Charges
relating to the Hotel, and to perform and satisfy Owner's covenants and
responsibilities under this Agreement. The performance of all activities by
Manager hereunder shall be on behalf of, and for the account of, Owner.

         (b) Upon the Commencement Date, Owner shall deposit in the Bank Account
at least Twenty-Five Thousand Dollars ($25,000) (the "Minimum Balance"); and
throughout the Term, Owner shall maintain the Minimum Balance in the Bank
Account.

                                    ARTICLE 3
                               TERM AND EXTENSIONS

         3.01 COMMENCEMENT DATE

         The "Commencement Date" of the Term hereunder shall be 12:01 a.m. local
time on May 29, 1998.

         3.02 TERM

         The initial term (the "Initial Term") of this Agreement shall cover the
period from and after the Commencement Date and ending on ____________. Manager
shall have the right and option to extend the term of this Agreement to _______
____ (the "Option Term") upon the condition that: (i) Manager gives written
notice to Owner of its desire to extend (the "Extension Notice") not less than
45 days nor more than 90 days prior to the end of the Initial Term; (ii) at the
end of the Initial Term the Owner has accumulated retained earnings (calculated
in accordance with GAAP) generated solely by the Hotel during the Initial Term
of not less than $535,000; (iii) at the end of the Initial Term no Event of
Default on the part of Manager has occurred that is continuing beyond any
applicable cure period under this Agreement, and any then existing Event of
Default shall be cured within any applicable cure period; and (iv) at the end of
the Initial Term ________________ Corporation is not in default under that
certain Amended and Restated Revolving Credit Agreement of even date herewith
between Owner and Doubletree Hotels Corporation (the "Revolving Credit
Agreement"). The Initial Term and, if applicable, the Option Term shall expire
on the dates hereinabove set forth, unless sooner terminated as hereinafter
provided, and are herein referred to collectively as the "Term" of this
Agreement.

         3.03 OWNER'S TERMINATION RIGHT UPON SALE OF HOTEL

         (a) In the event Manager fails to timely consent, pursuant to Article
19.01(b) hereof, to any proposed assignment by Owner of its rights and
obligations under this Agreement to a proposed purchaser upon a Sale of the
Hotel, or upon a Sale of the Hotel at any time on or after ________________
Owner shall have the right, at its sole option, to terminate this Agreement by
giving 90 days' prior written notice (a "Sale Termination Notice") to Manager.
The Sale Termination Notice shall set forth an estimate of the effective
termination date of this Agreement, which date shall not be less than 90 days
subsequent to the date of the Sale Termination Notice. The actual effective date
of termination shall be on the actual date of closing of the Sale of the Hotel
which was the subject of the

                                       -7-

<PAGE>

Sale Termination Notice, regardless of the estimate provided in the Sale
Termination Notice. Accordingly, Owner shall, upon reasonable notice, have the
right to extend the effective date of such termination for a reasonable period
of time based on delays in the closing date of the Sale of the Hotel, provided
that Owner shall pay all actual costs reasonably incurred by Manager in
postponing the effectiveness of such termination.

         (b) For the purposes hereof, a "Sale of the Hotel" shall be defined as
a sale of the Hotel or any transaction which is substantially equivalent to a
sale of the Hotel including, without limitation, a sale of all of the interests
in Owner, a merger or consolidation of Owner with a third party in which neither
Owner, Holdings nor any Affiliate of either of them is the surviving or
resulting entity, or a deed, lease, or other conveyance of all or substantially
all of Owner's interest in the Hotel (other than to Holdings or to any of its'
or Owner's Affiliates) whether pursuant to foreclosure proceedings or otherwise.

         (c) Notwithstanding anything to the contrary contained herein, Owner's
right to terminate this Agreement pursuant to Article 3.03(a) hereof, shall be
conditioned upon either (i) Owner's extension to Manager, on or before the
effective date of such termination, of an irrevocable offer to become the
manager of another hotel, which in the reasonable judgment of Manager (exercised
in good faith) is substantially comparable to the Hotel in quality, size and
revenues, for a term commencing not more than thirty (30) days following the
effective date of such termination and continuing for at least the unexpired
portion of the Term of this Agreement and upon the same substantive terms and
conditions as are set forth in this Agreement (including a right to extend any
remaining Initial Term to include the Option Term, upon the conditions herein
set forth for such extension) or (ii) Owner's (A) payment to Manager, upon the
effective date of such termination, of an amount equal to the aggregate amount
of the Base Management Fee actually paid to Manager during the twelve full
calendar months immediately preceding the effective date of such termination and
(B) provided that not less than 100 hotel properties are then being operated
under the ____________ name within the United States, requiring the purchaser of
the Hotel, on or before the effective date of such termination, to make an
irrevocable offer to enter into a license agreement with an Affiliate of Manager
for the continued operation of the Hotel under the ____________ name, such
license to be in such Affiliate's then customary form, having a term at least
equal to the greater of (y) five (5) years and (z) the unexpired Term of this
Agreement (including the Option Term, if not theretofore exercised) and
providing for license fees to such Affiliate aggregating not more than 2% of
Gross Room Sales during the first twelve months, 3% of Gross Room Sales during
the second twelve months and 4% of Gross Room Sales thereafter during the term
of such license and such other fees as may then be customarily charged by such
Affiliate in its license agreements for similar hotels.

         3.04 PERFORMANCE TERMINATION

         (a) Beginning on January 1, 2002, and continuing for the remainder of
the Term, Owner shall have the right to terminate this Agreement if Net
Operating Income for the immediately preceding Fiscal Year does not equal or
exceed 90% of the budgeted Net Operating Income for such Fiscal Year, as
determined pursuant to the budgetary process described in Article 8. Owner may
exercise such right to terminate this Agreement, without incurring a termination
fee or penalty, by giving written notice to Manager within 90 days after
receiving the annual financial statement for such Fiscal Year pursuant to
Article 8.01. Such performance termination notice shall specify the effective

                                       -8-
<PAGE>

date of such termination which shall not be less than 90 days from the date of
such performance termination notice.

         (b) Notwithstanding anything to the contrary in the foregoing, in the
event that Owner is entitled to provide, and does provide, Manager with timely
notice of termination of this Agreement pursuant to Article 3.04(a), Manager may
elect, but shall not be obligated, to nullify such termination notice and the
termination of this Agreement based thereon, by funding to Owner, within thirty
(30) days after receipt of Owner's performance termination notice, an amount
equal to the amount by which the actual Net Operating Income for the applicable
Fiscal Year was less than 90% of the budgeted Net Operating Income for such
Fiscal Year, as determined pursuant to the budgetary process described in
Article 8. If Manager exercises this Net Operating Income shortfall cure right,
Owner's performance termination notice shall be nullified and of no force and
effect, and this Agreement shall remain in full force and effect and the Fiscal
Year in question shall be deemed not to be a Fiscal Year in which there occurred
a shortfall in Net Operating Income which would give rise to Owner's termination
right under this Article 3.04. Manager shall be entitled to exercise this cure
right any number of times during the Term; provided, however, Manager may not
exercise this cure right for more than 2 consecutive Fiscal Years during the
Term.

         (c) Notwithstanding anything to the contrary contained herein, Owner's
right to terminate this Agreement under Article 3.04(a) (and the amount of any
shortfall to be paid by Manager in the event Manager exercises its cure right
pursuant to Article 3.04(b)) shall be eliminated, or reduced, as applicable, to
the extent that the shortfall in Net Operating Income is attributable to (i)
force majeure events as described in Article 21 or (ii) increases in utility
rates and/or premiums for insurance which Manager is responsible to obtain under
Exhibit E, in each case that could not have been reasonably anticipated by
Manager in connection with the submission of the Annual Business Plan. Any
disputes concerning the applicability of this Article 3.04(c) shall be resolved
pursuant to the arbitration procedure described in Article 22, and the time
period governing any Owner termination right or Manager cure right shall be
extended for a reasonable period of time (not exceeding 180 days) pending such
resolution.

         (d) Owner and Manager have agreed upon the Hotel's current Competitive
Set and the Hotel's current Yield Index (as reported in the "Star Report"
published by Smith Travel Research) versus such Competitive Set ("Base Yield
Index"), all as set forth on Exhibit 1. As a part of the budgetary process
described in Article 8, Owner and Manager shall review such Competitive Set
annually and in good faith agree upon any additions to or deletions from such
Competitive Set and, if necessary, adjust the Base Yield Index versus such
Competitive Set to reflect any additions thereto or deletions therefrom.

         (e) Beginning on the later of (i) January 1, 2002, and (ii) the date
upon which Owner has borrowed the full amount of the then "Commitment" under the
Revolving Credit Agreement, and continuing for the remainder of the Term, Owner
shall have the right to terminate this Agreement if, during each of the two
immediately preceding fiscal years, the Hotel's Yield Index (as reported in the
"Star Report" published by Smith Travel Research) versus its Competitive Set is
below the agreed upon Base Yield Index of the Hotel for each of the applicable
years. Owner may exercise such right to terminate this Agreement, without
incurring a termination fee or penalty, by giving written notice to Manager
within ninety (90) days after information regarding the Yield Index of the
hotels within

                                      -9-
<PAGE>

the Competitive Set is published by Smith Travel Research and provided to Owner
by Manager. Such performance termination notice shall specify the effective date
of such termination, which shall not be less than ninety (90) days from the date
of such performance termination notice.

         3.05 POST-TERMINATION MATTERS; REIMBURSEMENTS TO MANAGER

         Upon any termination or expiration of this Agreement for any reason
whatsoever (including, without limitation, pursuant to Article 15.02), Owner
expressly agrees that Manager may remove any of its documents which are
proprietary to Manager (e.g., without limitation, manuals, software programs,
internal correspondence of a proprietary nature, etc.), specifically excluding
financial records, documents, correspondence or other materials relating to the
Hotel, and that, as a condition to such termination or expiration, within ten
(10) days of billing therefor, Owner shall pay to Manager, in addition to any
other amounts due pursuant to this Agreement (i) Manager's reasonable
out-of-pocket costs incurred by reason of requests by Owner for assistance after
termination of this Agreement and not otherwise reasonably expected of Manager
in the orderly termination of its operations at the Hotel, (ii) any unpaid fees
and other charges and reimbursements due Manager hereunder, and (iii) to the
extent reasonable and consistent with Manager's standard practices and industry
standards, termination-related employee expenses, including sick, vacation,
pension, bonus and termination payments to employees. This Article 3.05 shall
survive the expiration or termination of this Agreement.

                                    ARTICLE 4
                                 NONDISTURBANCE

         Owner covenants that Manager, during the Term of this Agreement, shall
have peaceable and quiet possession of the Hotel and shall be entitled to
operate the Hotel in accordance with the terms of this Agreement, free from
molestation, eviction and disturbance by Owner or by any person through whom
Owner shall derive its title to or right to occupy and use the Hotel or by any
other person or persons claiming by, through or under Owner. Owner covenants
that throughout the Term, it will pay, keep, observe and perform all payments,
terms, covenants, conditions and obligations to be made, kept, observed or
performed by Owner under the Hotel Lease and any other lease, concession or
other agreement, mortgage or security agreement in respect of the Hotel, and
will provide all funds as shall be necessary to perform Owner's obligations
hereunder. Owner further covenants, at its own expense, to undertake and
prosecute or to permit Manager to undertake and prosecute all appropriate
actions, judicial or otherwise, required to assure such quiet and peaceable
possession and operation by Manager. Owner also covenants and agrees to pay,
prior to delinquency, all taxes and assessments which may become a lien on or
are assessed against the Hotel or any component thereof and which may be due and
payable during the Term, unless payment thereof is in good faith being contested
by Owner, enforcement is stayed and the amount so contested is escrowed or
guaranteed in a form satisfactory to Manager. Upon Manager's request, Owner
agrees to furnish Manager copies of all documents by and through which Owner has
the right of possession to the Hotel and consequently the ability to enter into
this Agreement.

                                      -10-
<PAGE>

                                    ARTICLE 5
                         STANDARDS AND MANAGERS CONTROL

         5.01 OPERATIONAL STANDARDS

         Manager covenants to and shall operate the Hotel under the Tradename at
the expense of Owner in accordance with the terms of this Agreement and the
operational standards developed by Manager in connection with its hotel
management business, as such operational standards are modified, revised or
amended from time to time (the "Operational Standards"). Owner shall cooperate
with Manager throughout the Term (as the same may be extended) so that Manager
shall be able to operate the Hotel in accordance with the Operational Standards.

         5.02 MANAGER CONTROL

         Owner hereby covenants to Manager uninterrupted control in operation of
the Hotel during the Term of this Agreement. Owner further covenants it will not
interfere or involve itself in any way with the day-to-day operation of the
Hotel. Manager shall have the right to determine operating policy, standards of
operation, quality of service and any other matters affecting customer relations
or the efficient management and operation of the Hotel. Without limiting the
foregoing, Manager shall have the right, subject to the other provisions of this
Agreement, to determine the terms of guest admittance to the Hotel, use of rooms
for commercial purposes, policies relating to entertainment, labor policies,
charges for rooms and commercial space, credit policies, food and beverage
services, menu prices and other guest charges, receipt, holding and disbursement
of funds, maintenance of bank accounts, and, from Owner's funds, the procurement
of inventories, supplies and services, promotion and publicity, including,
without limitation, the right to provide complimentary or discounted food,
beverages, rooms and the use of other Hotel facilities to existing or potential
customers, employees and others. Manager shall have the right to institute legal
proceedings with regard to the Hotel or its operations in its own name, without
the consent of Owner, or in Owner's name, with the prior written consent of
Owner.

         5.03 CONTRACTUAL AUTHORITY

         Subject to the limitations contained elsewhere in this Agreement,
Manager is and shall be authorized to make, enter into and perform in the name
of, for the account of, on behalf of and at the expense of Owner any contracts
and agreements deemed necessary by Manager to carry out and place in effect the
terms and conditions of this Agreement, including the execution by Manager in
Owner's name of equipment leases and the like relating to the Hotel.
Notwithstanding anything to the contrary in the foregoing, Manager shall not,
without Owner's prior written approval, execute any contract in Owner's name
which (a) is not provided for in the Approved Budget; (b) extends beyond one (1)
year and is not cancelable by Owner without penalty thereafter upon thirty (30)
days notice or less; or (c) provides for aggregate payments by Owner over the
life of the contract (taking into account Owner's early termination rights, if
any) in excess of $25,000. Further notwithstanding anything to the contrary in
the foregoing, Owner shall execute in its own name all leases of retail space in
the Hotel, all of which shall be subject to the approval of both Owner and
Manager.

                                      -11-
<PAGE>

                                    ARTICLE 6
                           USE OF MANAGER'S TRADENAME

         6.01 USE OF NAME

         The Hotel shall (subject to the other provisions of this Article 6.01)
be known and designated as a hotel operating under the tradename ____________
(the "Tradename") unless the parties hereto agree to the use of some other name.
Owner acknowledges that the Tradename is a registered service mark of Manager
and that the Tradename is and shall continue to be the sole property of Manager.
It is acknowledged that in the future Manager may determine to change the name
of the chain from the Tradename to another name, and, in connection with such
change, Manager may determine to convert the name of the hotels in the chain,
including the Hotel, from the Tradename to another designation; provided,
however, that Manager, at its sole cost and expense, shall pay any expenses
associated with such change, including, but not limited to, the cost of signage
at the Hotel. Owner hereby consents to any such change of name which is
acceptable to Manager. If such change is effected, references in this Agreement
to the Tradename shall instead or also (as appropriate) be deemed to refer to
such new chain name or names. As used in this Article 6 with reference to the
Tradename and the other Marks, the term Manager shall mean and include Manager
and any Affiliate(s) of Manager which from time to time may own the Tradename
and other Marks.

          6.02 DEFINITION OF MARKS

         As used herein, "Marks" shall mean the Tradename and any other name,
service marks, trademarks, slogans and the like (including all improvements and
additions whenever made to or associated with any thereof by the parties or
anyone else) now or hereafter used by Manager in connection with the Tradename
or any other future name or names of Affiliated Hotels. Owner shall not contest
Manager's unrestricted and exclusive ownership of the Marks or its right to
grant to others licenses to use the Marks.

         6.03 DISPUTES CONCERNING MARKS

         Manager shall have the sole right and responsibility to handle disputes
with third parties concerning use of all or any part of the Marks, and Owner
will, at Manager's expense, extend its full cooperation to Manager in all such
matters. Manager need not initiate suit against imitators or infringers and may
settle any dispute by grant of a license or otherwise. Owner shall not initiate
any suit or proceeding to enforce or protect the Marks. Both parties shall make
every effort consistent with the foregoing to protect, maintain, and promote the
Tradename and its distinguishing characteristics (and any other service marks,
trademarks, slogans, etc., associated with the Marks) as standing for hotels
being operated or developed by or by authorization from Manager under the
Tradename and only those hotels.

                                      -12-
<PAGE>

         6.04 RIGHTS UPON TERMINATION

         Upon any termination or expiration of this Agreement for any reason
whatsoever, unless Manager, in its sole discretion, authorizes Owner in writing
to continue to use the Tradename or enters into a license agreement with respect
to the use of the Tradename in connection with the Hotel, Owner, at its expense,
shall immediately cease all uses of the Tradename and all Marks and shall remove
from the Hotel, cover or otherwise conceal, any signs containing the Marks and,
within thirty (30) days following such termination or expiration, cease to use
any Operating Equipment, Operating Supplies, inventory, supplies or any other
materials containing the Marks. Manager shall cooperate with Owner in minimizing
interruption to Hotel operations by reason of such removal. Within thirty (30)
days after the termination date, Manager shall acquire from Owner, at cost, all
remaining non-location specific full-case inventory, amenities, supplies or
similar material containing the Marks or any similar designation which meet
Manager's then-current product specifications.

                                    ARTICLE 7
                             OPERATION OF THE HOTEL

         7.01 PERMITS

         Owner warrants that there will be no covenants or restrictions which
would prohibit or limit Manager, provided that the necessary licenses and
permits therefor have been obtained, from operating the Hotel, including
cocktail lounges, restaurants and other facilities in accordance with the
Operational Standards. In cooperation with Owner, Manager shall apply for,
process and take all necessary steps to procure (in Manager's name and/or
Owner's name as required by local authority), at Owner's sole cost and expense,
all licenses and permits required for the operation of the Hotel and related
facilities, including, but not limited to, liquor licenses for the sale of
alcoholic beverages at all restaurants, bars and lounges in the Hotel and in all
banquet, meeting and guest rooms at the Hotel. Owner agrees to assist Manager in
connection with Manager's efforts to obtain said liquor licenses. Manager
undertakes to comply with any conditions set out in any such licenses and
permits and at all times to operate and manage the Hotel in accordance with such
conditions and any other legal requirements. Upon the expiration or sooner
termination of this Agreement, Manager agrees, to the extent permitted by
applicable law, to sell, assign, transfer and convey to Owner or its designee
all of Manager's right, title and interest in and to all such licenses
(including liquor licenses) and permits, without charge (other than expenses of
transfer, which shall be borne by Owner), or (in the event such assignment is
not permitted by applicable law) to use its reasonable best efforts to provide
Owner or its designee with the use and benefits of such licenses until such time
as Owner and/or its designee are able to obtain new licenses.

         7.02 OPERATING EQUIPMENT AND OPERATING SUPPLIES

         Manager shall procure as an Operating Cost all Operating Supplies and
Operating Equipment as Manager deems necessary to the normal and ordinary course
of operation of the Hotel and to operate the Hotel in accordance with the
Operational Standards.

                                      -13-
<PAGE>

         7.03 PERSONNEL

         (a) All personnel employed at the Hotel at all times shall be the
employees of Manager or of an Affiliate of Manager. Subject to the Approved
Budget, other employees of Manager or an Affiliate of Manager may be assigned
temporarily or on a part-time basis to perform services at the Hotel, and the
allocable portion of such temporary or part-time employee's salary (including
employee benefits) while performing services at the Hotel, and actual expenses
incurred by such employee in traveling to and from the Hotel, shall be
reimbursed to Manager by Owner, and such employees will be entitled to free room
and board (but not alcoholic beverages) and use of Hotel facilities while
performing such services; provided, however, that in no event shall the
reimbursable costs, plus the cost of room, board and facilities usage, of such
temporary employees exceed the amount provided therefor in the Approved Budget
without Owner's prior written consent, which shall not be unreasonably withheld.
Manager shall have absolute discretion to hire, promote, supervise, direct and
train all employees at the Hotel, to fix their compensation and fringe benefits,
subject to the limitations provided in the Approved Budget, and, generally, to
establish and maintain all policies relating to employment and employment
benefits. Notwithstanding anything to the contrary in the foregoing, Owner shall
have the right to interview and consent to the hiring or transfer of the General
Manager and Director of Marketing of the Hotel. This right shall not be deemed
to limit the right of Manager to terminate the employment of such persons;
however, if circumstances permit, Manager shall consult with Owner prior to the
termination of such persons. All costs of every kind and nature pertaining to
all employees at the Hotel arising out of the employer-employee relationship,
including, without limitation, salaries, fringe benefits, bonuses, relocation
costs, employment-related legal costs, costs incurred in connection with
governmental laws and regulations and insurance roles, and such other expenses
as Manager, in its reasonable discretion, may deem appropriate (e.g., costs of
defense of employees charged with a crime in connection with the performance of
their duties at the Hotel and costs of defending claims brought by Hotel
employees against Owner, Manager or the Hotel) shall be an Operating Cost, and
Owner shall reimburse, indemnify and hold harmless Manager from all costs,
expenses, liabilities and claims incurred in connection therewith; provided,
however, that (i) unless agreed to by Owner in the Approved Budget or otherwise,
out-of-pocket expenses of officers of Manager and its parents and affiliates
shall not be reimbursable to Manager by Owner and (ii) with respect to any
employee moving expenses attributable to the Hotel, Manager shall be obligated
to reimburse Owner for one twenty-fourth (1/24th) of such expense during each of
the 24 consecutive months following the date such employee becomes employed at
the Hotel and during which such employee does not remain as an employee at the
Hotel; provided, however, that Manager shall have no such obligation to
reimburse Owner if the employment of such an employee terminates at Owner's
request or with Owner's prior written consent, which consent shall not be
unreasonably withheld.

         (b) Upon expiration or other termination of this Agreement (other than
pursuant to Article 15.02 hereof as a consequence of a default on the part of
Manager hereunder), an escrow fund shall be established from Total Sales (or, if
Total Sales are not sufficient, with funds provided by Owner) to reimburse
Manager for all costs and expenses incurred by Manager, such as reasonable
transfer costs, severance pay, unemployment compensation and other employee
liability costs arising out of either the transfer or termination of Hotel
employees. If the parties fail to promptly agree with respect to the amount of
the escrow fund, at the request of either party, the amount thereof shall be
determined by arbitration pursuant to the provisions of Article 22.

                                      -14-
<PAGE>

         7.04 SALES. MARKETING. ADVERTISING AND ADDITIONAL PROMOTIONAL PROGRAMS

         (a) Manager shall arrange, contract for and carry out such advertising
and promotion of the Hotel as Manager shall deem advisable and consistent with
the Approved Budget. Funds for advertising and promotion of the Hotel may be
expended exclusively for or with respect to the Hotel or, to the extent
specified in the Approved Budget, in conjunction with the advertising or
promotion of other Affiliated Hotels (including, without limitation, regional
cooperative advertising and marketing programs), and in either case may be
administered (and in the latter case, coordinated) at and through Manager's
regional or home office which shall use all reasonable efforts to ensure that
the Hotel shall receive an equitable share of the benefit of any such approved
cooperative advertising and promotion, reasonably commensurate with its
contribution to the costs thereof In the case of any such joint or cooperative
advertising or promotion (or other joint or cooperative efforts such as
development and/or publication of standardized directories for hotel rooms), the
costs thereof (without markup or profit to Manager or any Affiliate) shall be
equitably allocated by Manager between the Hotel and any other Affiliated Hotels
participating therein, considering the relative benefits received therefrom by
each of the participants.

         (b) Manager shall coordinate with tour programs marketed by airlines,
travel agents and government tourist departments when Manager deems the same to
be advisable and in the best interests of the Hotel. Manager, in its discretion,
may cause the Hotel to participate in sales and promotional campaigns and
activities involving complimentary rooms, food and beverages to bona fide travel
agents, tourist officials and airline representatives where such is customary in
the travel industry or in Manager's practice and policy.

         (c) The Hotel shall participate in the existing "Doubletree(R)" cookie
program. The Hotel shall also participate in such other promotional programs
(e.g., frequent flyer programs, etc.) as may, from time to time, be included in
the Operational Standards. In the event the owners of two-thirds (2/3) or more
of the rooms and suites in the Affiliated Hotels elect to participate in such
programs, the Hotel shall participate in such programs. The cost and expense of
such programs ("Additional Program Charges") will be borne by the participating
hotels in a fair and equitable manner, as reasonably determined by Manager, and
will be in addition to the other fees and charges payable by such hotels.

         7.05 TRADES: TREATMENT ACCORDED

         Manager may arrange for and make trades of goods and/or services
(including, but not limited to, room/suite occupancy, food, beverages,
incidental charge items and taxes relating to any thereof) furnished or to be
furnished to others at the Hotel, for goods and/or services (including, but not
limited to, advertising, air and ground transportation, rental vehicles and
taxes relating to any thereof) furnished or to be furnished to or for the
benefit of the Hotel or Manager. In such event, if the goods and/or services
received in a particular trade are exclusively for the use or benefit of the
Hotel (and not for any other use or benefit of Manager or any other hotel or
activity), there shall be included in Total Sales the usual charges for the
goods and/or services given therefor in such trade and the same amount shall be
deemed contemporaneously expended as Operating Costs for such goods and/or
services received; and if the goods and/or services received in a particular
trade are, to any extent, for the use or benefit of Manager and/or any other
hotel or activity (and not exclusively for the benefit of the Hotel), Manager
shall pay to the Hotel the usual charges for the goods and/or services given

                                      -15-
<PAGE>

by the Hotel in such trade (and such payment shall be included in Total Sales),
and if any of the goods or services so received are used by or for the benefit
of the Hotel, the entire amount so paid by Manager shall be equitably allocated
among the Hotel and all other hotels or activities benefitting therefrom in a
manner similar to the allocation of costs of marketing and of Centralized
Services, and the portion thereof fairly allocable to the Hotel shall be
reimbursed to Manager as an Operating Cost.

         7.06 FF&E REPLACEMENTS

         Owner recognizes the necessity of replacement of FF&E due to age, wear,
condition or obsolescence ("FF&E Replacements"). Owner agrees to expend, in
accordance with the Approved Budget, such amounts for FF&E Replacements as shall
be required in the normal and ordinary course of operation of the Hotel, to
operate the Hotel in accordance with the Operational Standards and the Hotel
Lease. Design and installation of FF&E Replacements, if requested by Owner,
shall be under Manager's supervision, for which Manager may be entitled to
additional compensation as provided in Article 9.04(a) below. Expenditures for
FF&E Replacements shall, to the extent provided in Article 7.11(a) hereof, be
paid from the Replacement Reserve Fund and the balance, if any, shall be paid
from the Bank Account.

         7.07 ROUTINE MAINTENANCE AND REPAIRS

         Subject to the availability of sufficient funds therefor and to the
limitations of the Approved Budget, Manager shall maintain the Hotel in good
repair and condition and in conformity with the Operational Standards, the Hotel
Lease, and applicable laws and regulations, and shall make or cause to be made
such routine maintenance, repairs and minor alterations, the cost of which can
be expensed under generally accepted accounting principles, as Manager, from
time to time, deems necessary for such purposes. The cost of such routine
maintenance, repairs and alterations shall be paid from Total Sales and shall be
treated as an Operating Cost; to the extent that Hotel revenues are insufficient
therefor, Owner shall, upon Manager's request, provide sufficient funds to pay
for such costs when due. Expenditures under this Article 7.07 shall not be paid
from the Replacement Reserve Fund. The determination of whether an expenditure
is for an FF&E Replacement under Article 7.06 or, in the alternative, for
routine repairs and maintenance under this Article 7.07 shall be made in
accordance with this Agreement and GAAP. If and to the extent that GAAP does not
address and resolve the categorization of an expenditure, the determination
shall be made by Manager, in good faith.

         7.08 CAPITAL REPAIRS

         In addition to routine maintenance, repairs and alterations under
Article 7.07, and subject to the limitations of the Approved Budget, Manager
shall have the further right to make, as a Fixed Charge, such Capital Repairs as
Manager deems to be beneficial to the Hotel or its operation or which Manager
determines to be necessary in order to maintain the Hotel's competitive position
or to maintain the Hotel in accordance with the Operational Standards and the
Hotel Lease. Expenditures under this Article 7.08 shall, to the extent provided
in Article 7.11(a) hereof, be paid from the Replacement Reserve Fund and the
balance, if any, shall be paid from the Bank Account. The determination of
whether an expenditure is for an FF&E Replacement under Article 7.06 or, in the
alternative, for a Capital Repair under this Article 7.08 shall be made in
accordance with this Agreement and GAAP. If and to the extent that GAAP does not
address and resolve the

                                      -16-
<PAGE>

categorization of an expenditure, the determination shall be made by Manager, in
good faith. As used herein, "Capital Repairs" shall mean and include repairs,
alterations, improvements, renewals and replacements (other than FF&E
Replacements) to the Hotel which are normally capitalized under GAAP, including,
without limitation, repairs, alterations, improvements, renewals or replacements
to the Building's structure or to its mechanical, electrical, heating,
ventilating, air conditioning, plumbing or vertical transportation systems,
exterior and interior repainting, and resurfacing building walls, floors, roofs
and parking areas. Design and completion of Capital Repairs, if requested by
Owner, shall be under Manager's supervision. To the extent Owner requests
Manager, in writing, to supervise Capital Repairs, Manager shall do so and shall
be entitled to compensation therefor in accordance with Article 9.04(a) hereof

         7.09 FF&E AND CAPITAL REPAIRS ESTIMATES

         Manager shall prepare plans and estimates of the expenditures
necessary, in such detail as Owner shall reasonably require, for (a) FF&E
Replacements (the "FF&E Replacement Budget"), and (b) Capital Repairs (the
"Capital Repairs Budget") during each ensuing Fiscal Year, and shall submit such
FF&E Replacement Budget and Capital Repairs Budget to Owner for approval as a
part of the Annual Business Plan described in Article 8.02.

         7.10 EMERGENCY REPAIRS: REPAIRS REQUIRED BY LAW

         (a) In the event a condition should exist in, on or about the Hotel of
an emergency nature, including Capital Repairs, which condition requires
immediate action to preserve and protect the Hotel, to assure its continued
operation, or to protect Hotel guests or employees, Manager, on behalf of and at
the sole cost and expense of Owner, is authorized to take all steps and to make
all expenditures necessary to repair and correct any such condition, whether or
not provisions have been made in the Approved Budget for any such emergency
expenditures. Manager shall not expend more than $25,000 (which figure shall be
adjusted annually hereafter to reflect increases in the Index) on any one
occasion pursuant to this Article 7.10(a) without Owner's prior approval, unless
Manager determines that the emergency condition constitutes an immediate threat
to the life or safety of Hotel guests or employees; and in any event, Manager
shall advise Owner as promptly as possible of any expenditures made or to be
made under this Article 7.10(a). Expenditures under this Article 7.10(a) shall,
to the extent provided in Article 7.11(a) hereof, be paid from the Replacement
Reserve Fund and the balance, if any, shall be paid from the Bank Account.

         (b) In the event that, at any time during the Term, repairs to or
additions, changes or corrections in the Hotel of any nature shall be required
by reason of any laws, ordinances, rules or regulations now or hereafter in
force, or by order of any governmental or municipal power, department, agency,
authority or officer, whether such repairs, etc. are Capital Repairs or
otherwise, such repairs, additions, changes or corrections shall be made at the
direction of Manager and paid for by Owner, unless (and except for so long as)
compliance therewith is in good faith being contested by Owner and enforcement
is stayed in a manner reasonably satisfactory to Manager. Expenditures under
this Article 7.10(b) shall, to the extent provided in Article 7.11(a) hereof, be
paid from the Replacement Reserve Fund and the balance, if any, shall be paid
from the Bank Account.

                                      -17-
<PAGE>

         7.11 REPLACEMENT RESERVE FUND

         (a) Under the terms of the Hotel Lease, there shall be paid over into
the Replacement Reserve Fund in cash in each month during the Term, an amount
equal to 3% of Total Sales for the preceding month (the "Replacement Reserve
Percentage"). The amounts so deposited in the Replacement Reserve Fund shall be
recorded on the Hotel's books of account as "Replacement Reserve Fund." All
deposits to, and the balance in, the Replacement Reserve Fund, from time to
time, shall be placed into and maintained in, an interest-bearing account (the
"Replacement Reserve Fund") established in Owner's name at a bank of Owner's
selection with Manager's designees being the only authorized signatories on said
account. Any expenditures for FF&E Replacements and Capital Repairs during any
Fiscal Year, to the extent provided for in the Approved Budget, may be made
without Owner's further approval and shall be made by Manager, to the extent
permitted under the Hotel Lease, from the Replacement Reserve Fund (including
accrued interest and unused accumulations from earlier years). Any amounts
remaining in the Replacement Reserve Fund at the close of each Fiscal Year shall
be carried forward and retained in the Replacement Reserve Fund until fully used
as herein provided.

         (b) To the extent the Replacement Reserve Fund is insufficient at a
particular time or to the extent the Replacement Reserve Fund plus anticipated
contributions for the ensuing year are below the amount provided therefor in the
Approved Budget for the ensuing year, then in either such event, Manager shall
give Owner written notice thereof at least forty-five (45) days before the
anticipated date such funds will be needed. Owner shall supply the necessary
funds by deposit to the Replacement Reserve Fund at least thirty (30) days prior
to the anticipated date such funds will be needed.

         (c) All proceeds from the sale or other disposition of FF&E no longer
needed for the operation of the Hotel shall be deposited to the Replacement
Reserve Fund. Sale of such items shall be at the discretion of Manager and
conducted in a commercially reasonably manner. Manager shall not dispose of any
capital item or group of capital items having an aggregate value in excess of
$10,000 without Owner's prior written consent, unless the replacement of such
capital item or group of capital items has been contemplated in the Approved
Budget. Manager shall also obtain the written consent of Mortgagee, if required,
for any such disposition of capital items. Upon termination of this Agreement
for whatever reason, Manager's right to expend any unused portion of the
Replacement Reserve Fund shall terminate and the balance of the fund shall be
paid over to Owner, less any sums then due Manager.

         7.12 CAPITAL IMPROVEMENTS

         Holdings or Owner may, but shall not be required to, make such other
capital improvements or additions to the Hotel as they deem appropriate, from
time to time. Holdings or Owner, as the case may be, shall consult with Manager
regarding the nature, and cooperate with Manager in the timing, of such
additional capital improvements or additions, with a view to minimizing the
adverse revenue impact thereof upon the Hotel.

                                      -18-
<PAGE>

                                    ARTICLE 8
                                 FISCAL MATTERS

         8.01 ACCOUNTING MATTERS AND FISCAL PERIODS

         (a) The books and records reflecting the Hotel operations shall be kept
by Manager, as an Operating Cost, in accordance with GAAP. Such books and
records shall be maintained either at the Hotel, at the principal office of
Manager or at a regional accounting office, at Manager's option. Owner, the
Mortgagee(s), and the independent accounting firms of Owner, the Mortgagee(s)
and Manager shall each have the right and privilege of examining said books and
records at any reasonable time. No part of Manager's corporate accounting or
reporting functions (as opposed to accounting and reporting for individual
hotels performed at corporate, central or regional offices) shall be charged to
the Hotel or be included as a cost of Centralized Services.

         (b) Upon request of Owner and at Owner's sole cost and expense, a
certified audit of the Hotel operations shall be performed by a nationally
recognized, independent Certified Public Accounting firm appointed by Owner.
Manager shall cooperate in good faith with Owner and its representatives to
facilitate such audit. If the difference (if any) in the Net Operating Income of
the Hotel reflected by such audit and the Net Operating Income of the Hotel
reported by Manager hereunder, for any Fiscal Year, is more than 5% of the Net
Operating Income of the Hotel so reported by Manager, Manager shall reimburse
Owner for the entire cost of such audit.

         (c) Unless and until Owner and Manager otherwise agree in writing, the
fiscal year of the Hotel shall be the calendar year (the "Fiscal Year"). Manager
shall prepare and furnish to Owner, within fifteen (15) days after the end of
each calendar month (Manager shall use all reasonable efforts to provide such
reports within ten (10) days after the end of each calendar month, but in any
event not later than fifteen (15) days) a detailed balance sheet and profit and
loss statement for the Hotel, setting forth the financial position and results
of operations of the Hotel for such calendar month and the calendar year to
date, with comparisons to the then current Operating Budget and the previous
year's results. Manager shall also provide Owner with additional operating and
financial data as Owner may reasonably request, the cost of providing said data
to be an Operating Cost of the Hotel.

         8.02 ANNUAL BUSINESS PLAN

         (a) Manager has submitted to Owner an Operating Budget and the Annual
Business Plan for ____ Fiscal Year. The Annual Business Plan for ____ has been
reviewed and approved by Owner in the manner described in Article 8.02(b)(1)
hereof Manager shall operate the Hotel in accordance with the Annual Business
Plan for ______ during the ____ Fiscal Year.

         (b) (1) At least forty-five (45) days prior to the commencement of each
subsequent Fiscal Year, Manager shall submit to Owner an annual forecast for the
operation of the Hotel for such Fiscal Year containing, in such detail as may be
reasonably requested by Owner, revenue projections and budgets of expenses (the
"Operating Budget"). The Operating Budget shall be substantially in form
consistent with GAAP. Manager shall, at the same time, also submit to Owner a
Marketing Plan, a Human Resources Compensation Plan, the FF&E Replacement Budget
and the Capital Repairs Budget, which, together with the Operating Budget, will
comprise the "Annual Business Plan." Manager shall provide Owner, upon request,
additional detail, information and assumptions

                                      -19-
<PAGE>

used in preparation of the Annual Business Plan. Manager shall review the Annual
Business Plan with Owner, and subject to Owner's approval, which shall not be
unreasonably withheld, Manager shall implement such Annual Business Plan during
the successive Fiscal Year (during which it shall be referred to as the
"Approved Budget"). Owner shall approve the proposed Annual Business Plan or
state its specific objections thereto (or to any specific item or items therein)
within thirty (30) days after the Annual Business Plan is submitted by Manager
to Owner. In the event Owner declines to approve the Annual Business Plan or any
specific line item or items of the Annual Business Plan prior to commencement of
the Fiscal Year in question, pending resolution thereof the Annual Business Plan
or the specific line item or items of expense (not revenue) that have not been
approved shall be suspended and replaced for the Fiscal Year in question by an
amount equal to the lesser of (i) that amount proposed by Manager and (ii) the
amount of such budget item or items for the Fiscal Year prior thereto, adjusted
(per item) by the percentage change in the Index over the twelve (12) month
period immediately preceding the start of the Fiscal Year in question. If,
thereafter, at any time either Owner or Manager determines that the Annual
Business Plan, or any specific line item or items therein, cannot be agreed to
by the parties, then either Manager or Owner may require the matter to be
submitted to arbitration in accordance with Article 22 hereof Manager makes no
assurances that the actual performance of the Hotel shall correspond to its
estimates in the Annual Business Plan. Manager agrees to use all reasonable
efforts to operate the Hotel within the Approved Budget and in a manner designed
to maximize Gross Rooms Sales and Net Operating Income. Centralized Services
costs, the National Sales, Business Promotion and Reservations Services
Assessment, Additional Program Charges and TPR Charges (as herein defined),
shall be included in the Operating Budget, but with Centralized Services costs
to be subject to Owner's approval as part of the budget approval process set
forth above.

                  (2) Notwithstanding the provisions of Article 8.02(b)(1) or
anything to the contrary contained elsewhere in this Agreement, Manager may,
without Owner's approval, make aggregate expenditures in any year which exceed
the Approved Budget, provided that such excess does not exceed the Approved
Budget by more than 5%. In addition, Manager may expend in excess of said 5%
limitation under the following circumstances (provided such expenditures are
reasonable in nature and amount based on such circumstances):

                           (A)      as the result of increased costs due to
                                    increases in the volume of Total Sales (by
                                    reason of increased occupancy rates or
                                    otherwise); or

                           (B)      as the result of an emergency, as described
                                    in Article 7.10, or of uncontrollable
                                    expenditures, such as insurance, real estate
                                    taxes, weather-related costs, and increases
                                    in the cost of utilities based upon changes
                                    in utility rates.

References in this Agreement to the limitations imposed by the Approved Budget
(and phrases of similar import) shall be deemed to incorporate Manager's
authority to expend funds in excess of the Approved Budget as set forth in this
Article 8.02(b)(2). Manager shall promptly notify Owner of any expenditures that
have been or are expected to be made in excess of the Approved Budget and of the
reasons therefor.

                  (3) In addition to the additional amounts Manager may expend
pursuant to subparagraph (2) above, Owner and Manager acknowledge and agree that
there may occur from time

                                      -20-
<PAGE>

to time unpredicted significant changes, variables or events affecting the
operation of the Hotel, including unanticipated changes in occupancy rates,
market conditions, or additional unanticipated items of income or expense. In
such event, Manager may request variance(s) from the Approved Budget which are
reasonable and necessary to continue to operate the Hotel in accordance with the
Operational Standards and the Hotel Lease. Owner's approval of such a request
shall not be unreasonably withheld. Any such request by Manager shall be
submitted to Owner in writing with an explanation thereof and shall be
accompanied by supporting information for the request. Owner shall respond to
any such request within fifteen (15) days of the receipt thereof

         (b) At the time of the review by Owner with Manager of the Annual
Business Plan and at any additional meetings during the Fiscal Year reasonably
called by Owner or Manager, Manager shall consult with Owner on matters of
policy concerning management, sales, room rates, wage scales, personnel, general
overall operating procedures, economics and operation and other matters
affecting the operation of the Hotel.

         8.03 BANK ACCOUNTS

         (a) Manager shall establish such account(s) in the name of the Owner at
a bank to be designated by Manager and approved by Owner (collectively, the
"Bank Account") as are necessary for the operation of the Hotel. The Bank
Account shall be separate and distinct from any other accounts, reserves or
deposits required by this Agreement and Manager's designees shall be the only
parties authorized to draw upon the Bank Account. Manager shall appoint at least
two such designees, which designees shall be bonded or otherwise insured as
Owner and Manager shall mutually agree. Checks or other items of withdrawal
shall be signed only by such designees, acting singly or jointly.

         (b) Manager shall have absolute control of the Bank Account. All sums
received from the operation of the Hotel and any and all items paid by Manager
arising by virtue of management of the Hotel shall pass through the Bank
Account. In addition, reasonable petty cash funds may be maintained at the
Hotel.

         (c) In addition to the Bank Account, a payroll account shall be
established by Manager which shall be under the sole ownership and control of
Manager or its designee. Amounts disbursed or to be disbursed by Manager from
its payroll account shall be paid to, and transferred by, Manager from the Bank
Account. Such payment and transfer of funds may occur at such time (whether
prior or subsequent to the release by Manager of checks drawn on its payroll
account) as Manager, in its reasonable discretion, determines is necessary to
assure that it will have sufficient funds from the revenues of the Hotel to
satisfy its liabilities to employees at the Hotel.

          (d) In no event shall any funds in the Bank Account, the Replacement
Reserve Fund or any other fund or account under the control of Manager that
contains monies belonging to the Hotel or to the Owner be combined or commingled
with any other accounts or funds belonging to Manager or any other person
whatsoever.

          (e) All payments made by Manager hereunder shall be made from
authorized bank accounts and petty cash funds. Except as otherwise expressly
provided in Article 8.05 hereof, Manager shall not be required to make any
advance or payment to or for the account of Owner

                                      -21-
<PAGE>

except out of such funds, and Manager shall not be obligated to incur any
liability or obligation for Owner's account without reasonable assurances that
necessary funds for the discharge thereof will be provided by Owner. Reasonable
debts and liabilities incurred by Manager in the normal course of its operation
and management of the Hotel pursuant to the terms hereof whether asserted before
or after termination of this Agreement, shall be paid by Owner to the extent
funds are not available for that purpose from the operation of the Hotel.

         8.04 REIMBURSEMENT OF OUT-OF-POCKET EXPENSES

         It is agreed that Owner, subject to the Approved Budget, shall
reimburse Manager and its Affiliates for actual, reasonable and necessary
out-of-pocket costs incurred by them in the performance of this Agreement as an
Operating Cost. Such costs shall include, but not be limited to, reasonable
travel, entertainment, telephone, telegraph, electronic communication, postage,
air express, costs of recruitment (including applicable agent's fee) and other
incidental expenses. It is agreed that Manager shall be entitled to
reimbursement of these expenses directly from the Bank Account at the time
incurred. Such reimbursements shall be in addition to the Base Management Fee
and other fees and payments due hereunder.

                                    ARTICLE 9
                               ADDITIONAL SERVICES

         9.01 ADDITIONAL SERVICES

         Manager will provide to the Hotel additional services (collectively,
"Additional Services") consisting of (i) Centralized Services, as described in
Article 9.02, (ii) National Sales, Business Promotion and Reservations Services,
as described in Article 9.03, and (iii) the Other Services described in, and as
permitted by, Article 9.04.

         9.02 CENTRALIZED SERVICES

         (a) Manager will cause to be furnished to the Hotel certain services
("Centralized Services") which are furnished generally on a central or regional
basis to other Portfolio Hotels. Centralized Services shall include (i) training
of personnel, (ii) accounting, internal audit and data processing services, and
(iii) such additional central or regional services as may from time to time be
furnished for the benefit of Portfolio Hotels or in substitution for services
now performed at individual Portfolio Hotels which may be more efficiently
performed on a group basis. Accounting and data processing services shall
include a central office computer, full service accounting (or oversight of
property stand-alone accounting systems) and data processing system/program
support, and audit and system/personnel support for the purpose of ensuring the
consistent and professional execution of accounting and data processing
functions required for the Hotel.

         (b) Centralized Services costs shall consist of the actual cost of the
services without markup or profit to Manager or any Affiliate, but shall include
salary and employee benefit costs, cost of equipment used in performing such
services, and overhead costs, reasonably allocable thereto, of the home office
or any regional or other local office providing such services; provided,
however, that costs attributable or allocable to corporate office accounting and
reporting for Manager or any of its Affiliates shall not be included. Costs and
expenses incurred in the providing of Centralized Services

                                      -22-
<PAGE>

for Portfolio Hotels shall be allocated by Manager and its Affiliates on a fair
and equitable basis, consistently applied, among all Portfolio Hotels receiving
such services; provided, however, that in no event shall the basis upon which
the cost of such services is allocated to the Hotel be less favorable to the
Hotel than the basis upon which such costs are allocated to any other hotel
under an agreement entered into (as opposed to being assumed as part of an
acquisition) subsequent to the Execution Date. A detailed budget for Centralized
Services shall be prepared and included in the Annual Business Plan submitted to
Owner pursuant to Article 8.02(b)(1) hereof and in each Approved Budget.
Anything herein to the contrary notwithstanding, in no event shall the amounts
charged to the Hotel for any Fiscal Year exceed the amount therefor included in
the Approved Budget for such Fiscal Year, unless otherwise expressly approved by
Owner in writing. Costs of Centralized Services shall be payable monthly as an
Operating Cost. Owner may at any reasonable time review the records of Manager
and its Affiliates pertaining to such charges. In addition, if equipment is
installed and maintained at the Hotel in connection with the rendition of any
Centralized Services, all costs thereof will be charged to the operation of the
Hotel either as current expenses or capitalized over a period of years, as
determined by Manager in good faith and consistent with GAAP.

         9.03 NATIONAL SALES. BUSINESS PROMOTION AND RESERVATIONS SERVICES

         (a) Manager shall cause to be furnished to the Hotel certain services
("National Sales, Business Promotion and Reservations Services") consisting of
central marketing services and a central reservations system. The central
marketing services shall provide system-wide marketing activities for all
Affiliated Hotels and shall include national and regional advertising, sales
promotion, public relations and direct selling efforts for the collective
business development of all Affiliated Hotels. The central reservations system
shall provide a national toll-free system for inquiries regarding customer
bookings and for making, changing and canceling reservations for the Hotel and
other Affiliated Hotels.

         (b) Manager shall assess, and Owner shall pay to Manager, a monthly
assessment (the "National Sales, Business Promotion and Reservations Services
Assessment") for National Sales, Business Promotion and Reservations Services
equal to 3.5% of Gross Room Sales. Such amount may be increased by a vote of the
owners of a majority of the rooms and suites in all Affiliated Hotels. The
National Sales, Business Promotion and Reservations Services Assessment will be
payable each month directly from the Bank Account based upon Gross Room Sales
for the preceding month. Costs of National Sales, Business Promotion and
Reservations Services shall consist of the actual cost of providing such
services without mark-up or profit to Manager or any Affiliate, but shall
include salary and employee benefit costs, cost of equipment used in providing
such services, and overhead costs of the home office or any regional or other
local office providing such services, in each case reasonably allocable thereto.

         (c) The National Sales, Business Promotion and Reservations Assessment
does not cover charges for third-party reservation systems (such as airline
reservations systems) and/or other third-party reservation fees ("TPR Charges"),
which shall be paid for separately by Owner as an Operating Cost of the Hotel.
TPR Charges shall include costs incurred by Manager or any Affiliate (without
markup for profit to Manager or any Affiliate) in administering such systems or
fees, such as salary and employee benefit costs, cost of equipment, and overhead
costs at the home office or any other regional or local office in administering
such systems and fees, in each case reasonably allocable thereto.

                                      -23-
<PAGE>

         (d) National Sales, Business Promotion and Reservations Services may be
provided in common with other hotels and resorts and all-suite properties owned,
operated or franchised by, or otherwise affiliated with, Manager or its
Affiliates and with other hotels which elect to participate in such services,
including hotels and resorts in the Canadian Pacific Hotel chain. In any event,
advertising and promotional materials for the Affiliated Hotels may include
cross-sell references to hotels and resorts in the Canadian Pacific Hotel chain,
to other hotels owned, operated or franchised by Manager or its Affiliates, and
to their affiliation with Manager.

         9.04 OTHER SERVICES

         (a) Direction and administration of Hotel renovation projects, other
planning, design, concept development and implementation, management information
systems and accounting services for specific renovation or other projects, and
related project management services which the Hotel may require (collectively,
"Project Services"), are not Centralized Services and are not provided for under
the scope of this Agreement. Accordingly, Manager will not furnish Project
Services, unless the same are expressly requested by Owner in writing, and the
amount of fees payable hereunder for such Project Services are approved in
writing by Owner, in each instance before any such Project Services are
furnished by Manager on behalf of Owner or at Owner's expense. In the event
Owner so requests and approves such Project Services, Manager may use the
services of its Affiliates to perform Project Services, in which case, Project
Services shall be furnished to Owner on terms and conditions that are generally
no less favorable to Owner than those available from unrelated third parties in
an arms-length transaction. Owner agrees to give good faith consideration to the
use of Manager to provide Project Services, but shall have no obligation to
select Manager to provide the same.

         (b) In purchasing goods, supplies, equipment and services for the Hotel
or organizations or entities providing Additional Services for the Hotel,
including, without limitation, Operating Supplies, Operating Equipment,
insurance and long distance telephone services, Manager shall (i) unless
otherwise directed by Owner in writing, utilize the purchasing and procurement
services of Affiliates of Manager and/or other group buying techniques involving
other Portfolio Hotels, provided that the cost thereof shall be generally no
less favorable to Owner than that which would be available through unrelated
third party vendors in an arms-length transaction or (ii) if so directed by
Owner in writing, utilize such other supplier or provider as may be designated
by Owner. The Manager and/or Affiliates of Manager (as the case may be)
providing any such purchasing or procurement services to the Hotel may mark up
their costs or receive and retain a fee or other compensation from vendors and
service providers for their services in making the benefit of volume purchases
available to the Hotel or negotiating and implementing the arrangements with
such vendors or providers; provided, however, that the total cost of goods and
services (including such mark-up, fee or other compensation charged or retained
by Manager or its Affiliates) so provided to the Hotel by Manager or its
Affiliates shall be generally no less favorable to Owner than that which would
be available through unrelated third party vendors in an arms-length
transaction. Owner agrees to give good faith consideration to the use of Manager
to provide procurement services, but shall have no obligation to select Manager
to provide the same.

                                      -24-
<PAGE>

                                   ARTICLE 10
                               PAYMENTS TO MANAGER

         10.01 BASE MANAGEMENT FEE

         In consideration of the management of the Hotel by Manager, Owner
agrees to pay to Manager the Base Management Fee. The "Base Management Fee"
shall mean and refer to a fee equal to, during the period from the Commencement
Date to and including _________________, 2.5% of Total Sales with respect to
each month (or portion thereof) during such period, and during the period from
_______________, to and including the end of the Term, 3.0% of Total Sales with
respect to each month during such period. The Base Management Fee for the
immediately preceding month shall be paid monthly to Manager from the Bank
Account; provided, however, that the Base Management Fee shall be reduced as
follows to the extent necessary to permit the Owner to pay, when due, all rent
payable to Holdings under the Hotel Lease and the comparable hotel leases
covering each of the AEW Hotels:

                  (a)      for the period from the Commencement Date through
                           __________________ up to 1.5% of Total Sales; and

                  (b)      for the period from ________________ through the
                           remainder of the Initial Term, up to 0.5% of Total
                           Sales.

Manager shall adjust the amounts charged by it to the Hotel, on a monthly basis,
in respect of the Base Management Fee to reflect any anticipated reduction in
the Base Management Fee payable to it for the then current Fiscal Year or, if no
such reduction is anticipated, to restore reductions made in any previous month
of the then current Fiscal Year. A final reconciliation of the Base Management
Fee due Manager, if any, for each Fiscal Year shall be included with the
financial statements to be provided by Manager to Owner with respect to December
of each Fiscal Year and, within thirty (30) days following delivery thereof, (i)
Owner shall pay to Manager any Base Management Fee due, but not paid to Manager,
for such Fiscal Year, or (ii) Manager shall reimburse to Owner any Base
Management Fee paid to Manager, but in excess of the Base Management Fee due,
for such Fiscal Year. Any reduction in the Base Management Fee payable for any
Fiscal Year, as a result of the foregoing provisions, shall not be payable in
any subsequent Fiscal Year.

                                   ARTICLE 11
                                  DISBURSEMENTS

         11.01 DISBURSEMENT OF FUNDS

         All funds derived from the operation of the Hotel shall be deposited
into the Bank Account created pursuant to the requirements of Article 8.03.
There shall in turn be disbursed by Manager for and on behalf of Owner, funds
from the Bank Account towards the following items to the extent available (with
appropriate reserves established to cover items payable less frequently than
monthly) in the following order of priority:

                                      -25-
<PAGE>

                  (a)      all Operating Costs, including the Base Management
                           Fee (subject to adjustment as provided in Article
                           10.01), charges for Additional Services, and all
                           reimbursable expenses due Manager;

                  (b)      payments pursuant to any equipment leases or
                           installment sale contracts approved by Manager;

                  (c)      all rental payments required to be made by Owner
                           pursuant to the Hotel Lease; and

                  (d)      all other Fixed Charges.

         11.02 ADJUSTMENT TO BANK ACCOUNT

         After the disbursements pursuant to Article 11.01, any excess funds
remaining in the Bank Account over the Minimum Balance shall be disbursed
monthly to Owner. Correspondingly, any deficiency in the Bank Account shall
promptly be provided by Owner as required in Article 2.03. Notwithstanding that
Manager is authorized to and shall make the hereinabove described disbursements
to the extent funds are available, Owner will be solely liable for (i) all
Operating Costs, Specified Fixed Charges and other Fixed Charges and (ii) all
sales taxes, excise taxes, or other taxes which may be assessed by any taxing
authority against or upon Manager with respect to any payments, receipts or
earnings received by Manager pursuant to this Agreement, including, without
limitation the fees received by Manager pursuant to Article 10, excluding in any
case, however, any federal, state or local income, franchise or other taxes
levied against Manager based upon its assets or income.

                                   ARTICLE 12
                                    INSURANCE

         12.01 INSURANCE COVERAGE

         Owner (or Holdings, to the extent provided under the Hotel Lease) shall
procure and maintain, at its expense, and at all times during the Term, such
casualty and other insurance coverage as is set forth under "Responsibilities of
Owner" in Exhibit E attached hereto. Manager agrees to procure and maintain, as
an Operating Cost, such comprehensive general liability insurance and other
insurance coverage as is set forth under "Responsibilities of Manager" in said
Exhibit E. In connection with all significant construction at the Hotel, Owner
or Manager (whichever is the contracting party) will cause the general
contractor to maintain with a reputable insurer comprehensive general liability
insurance (with products, completed operations and independent contractors
coverage) in at least the amount of $20,000,000.

         12.02 INSURANCE POLICIES

         (a) All insurance provided for under this Article shall be effected by
policies issued by insurance companies of good reputation and of sound financial
responsibility and shall be subject to Manager's approval. Such insurance may be
carried under blanket policies covering the Hotel and other locations provided
such policies otherwise comply with all of the requirements of Exhibit E.

                                      -26-
<PAGE>

         (b) Certificates of insurance shall be delivered to Owner and Manager
on or before the Commencement Date. All insurance policies shall be renewed, and
proof of such renewals shall be delivered to Owner and Manager at least ten (10)
days prior to their respective expiration dates.

         (c) All insurance policies procured by Owner under Article 12.01 (or by
Holdings, to the extent provided under the Hotel Lease) shall be written in the
name of Owner with Holdings, Manager and any Mortgagee(s) being named thereon as
additional insureds (as their respective interests may appear). All insurance
policies procured by Manager under Article 12.01 shall be written in the name of
Manager with Owner, Holdings any Mortgagee(s) and any other appropriate parties
designated by Owner or Manager being named thereon as additional insureds (as
their respective interests may appear), except for workers' compensation
insurance and other insurance with respect to which it is impractical and
inappropriate to name other parties as additional insureds.

         (d) All casualty insurance policies shall be endorsed specifically to
the effect that the proceeds of any building, contents or business interruption
losses shall be made payable to Owner, Holdings, the Mortgagee(s), and Manager
jointly, as their interests may appear, unless otherwise required by any
Mortgagee. All such policies of insurance shall also be endorsed specifically to
the effect that such policies shall not be canceled or materially changed
without at least thirty (30) days' prior written nOtice to Owner, Holdings, the
Mortgagee(s) and Manager. Each party shall use all reasonable efforts to cause
any policy which it is responsible to obtain under Exhibit E to provide that the
insurer shall not have any rights of subrogation to any claim which either party
hereto may have or acquire against the other. Neither Owner nor Manager shall
have any claim against the other with respect to the failure of any insurance
carrier to provide the coverage or protection placed with such carrier as
contemplated by this Agreement.

         (e) Certificates of insurance (and copies of policies, to the extent
required) shall be sent to Manager and to Owner at their respective addresses
set forth in Exhibit 1 and to the Mortgagee(s) at such address(es) as the
Mortgagee(s) shall designate.

         (f) All coverage limits and deductible amounts set forth in Exhibit E
shall be reviewed by Owner and Manager from time to time for the purpose of
determining the coverage limits and deductible amounts then appropriate for
properties similar in type and construction to the Hotel and for the nature of
the business being conducted. Manager and Owner shall cooperate in good faith to
arrive at an agreement on such matters.

         12.03 MANAGER'S BLANKET INSURANCE COVERAGE

         Manager may, at its option (but shall not be obligated to) make
available to Owner and Holdings the opportunity to participate in blanket
insurance policies carried by Manager for other properties, including, without
limitation, other Portfolio Hotels, and which cover all or any portion of the
insurance coverage specified in Exhibit E (including all or any portion of that
insurance REQUIRED TO BE PROCURED AND MAINTAINED BY OWNER OR HOLDINGS UNDER
ARTICLE 12.01). OWNER AGREES TO PARTICIPATE IN SUCH BLANKET POLICIES IF (a)
MANAGER DETERMINES TO MAKE SUCH COVERAGE AVAILABLE TO OWNER, AND (b) THE
PREMIUMS FOR, AND THE COVERAGE AND FINANCIAL STRENGTH PROVIDED BY THE INSURER(s)
under such blanket policies applicable to the Hotel shall be competitive with
the premiums for, and the coverage and financial strength provided by the
insurer(s) from which Owner would otherwise obtain such insurance. In such
event, notwithstanding the provisions of Article 12.01 and Exhibit E

                                      -27-
<PAGE>

hereof Manager shall be responsible for procuring and maintaining, at the
expense of Owner all insurance coverage represented by such blanket policies.

                                   ARTICLE 13
                         RESPONSIBILITY FOR CLAIMS. ETC.

         13.01 SCOPE

         (a) All debts and liabilities arising in the course of business of the
Hotel or otherwise in connection with the use, occupancy or operation thereof
(including, without limitation, all such liabilities under or with respect to
environmental laws, hazards or claims) during the Term are and shall be the
obligation of Owner, and Manager shall not be liable or otherwise responsible
for any such debts or liabilities by reason of its management, supervision and
operation of the Hotel during said Term, except for any such debt or liability
that arises because of Manager's fraud, gross negligence or willful misconduct.
Manager shall defend, indemnify and hold harmless Owner and its Affiliates, and
their respective agents, officers, employees, directors and shareholders, from
and against any and all losses, costs, liabilities, expenses and claims (whether
administrative or judicial), including, without limitation, reasonable
attorneys' fees and expenses (all of the foregoing being referred to as
"Losses"), arising from any matter for which Manager is responsible under this
Article 13.01 (excluding, however, any such loss, cost, liability, expense or
claim covered by the insurance required to be maintained in accordance with this
Agreement). The act or omission of a Hotel employee who is not an Executive
Employee, which act or omission is willful or constitutes fraud or gross
negligence on the part of such employee, shall not constitute fraud, gross
negligence or willful misconduct on the part of Manager unless Manager's home
office or regional staff, or an Executive Employee, acted with gross negligence
in employing, training, supervising or continuing the employment of such
employee. As used herein and elsewhere in this Agreement, "Executive Employees"
shall mean and include the General Manager; Controller, Rooms Manager, Food and
Beverage Manager, Director of Marketing, and Human Resources Director.

         (b) Except as to specific acts or omissions for which Manager has
agreed to indemnify Owner in paragraph (a) above, Owner hereby agrees to defend,
indemnify and hold Manager and its Affiliates, and their respective agents,
officers, employees, directors and shareholders, harmless from and against
Losses occurring out of or by reason of this Agreement or otherwise arising in
connection with the ownership, use, occupancy or operation of the Hotel.

         (c) No person or entity shall be deemed to be a third party beneficiary
of any term or provision of this Agreement, including, without limitation, the
terms and provisions of this Article 13.01, and no person or entity shall have
any rights of subrogation or similar rights under this Article 13.01, other than
Affiliates of Owner and Manager, respectively, entitled to indemnification
pursuant to the provisions of this Article 13. All indemnification obligations
under this Agreement and the provisions of this Article 13 shall survive the
expiration and any termination of this Agreement.

                                      -28-
<PAGE>

                                   ARTICLE 14
                            CASUALTY AND CONDEMNATION

         14.01 CASUALTY

         (a) If, during the Term, the Hotel incurs minor damage by fire,
casualty or other cause, Owner shall, at its sole cost and expense and with all
reasonable diligence, repair or replace the damaged portion of the Hotel to the
same condition as existed previously. To the extent available, proceeds from the
insurance described in Article 12 shall be applied to such repairs or
replacements.

         (b) In the event damage or destruction to the Hotel from any cause
materially and adversely affects the operation of the Hotel, Owner shall
promptly commence and complete repairing, rebuilding or replacement of the Hotel
to substantially the same character as existed prior to the damage or
destruction provided replacement is justified in comparison to the anticipated
profitability of the Hotel during the remaining Term, and provided that the
available insurance proceeds (plus the amount of the deductible with respect
thereto) permit such repair, rebuilding or replacement. In the event Owner
chooses to not undertake the repairs, rebuilding or replacements specified
above, Manager or Owner may terminate this Agreement upon sixty (60) days'
advance written notice, respectively, to Owner or Manager without the payment of
a termination fee or other penalty of any kind; provided, however, in the event
Owner or any Affiliate (but not any unrelated third party transferee of Owner)
shall reopen the Hotel as a hotel within two years after the date of such
casualty, on or before the date of reopening, Owner shall pay Manager a
termination payment in an amount equal to the aggregate amount of the Base
Management Fee paid to Manager hereunder during the twelve full months
immediately preceding the date of such casualty.

         14.02 CONDEMNATION

         (a) In the event all or substantially all of the Hotel shall be taken
in any eminent domain, condemnation, compulsory acquisition, or similar
proceeding by any competent authority for any public or quasi-public use or
purpose, or in the event a portion of the Hotel shall be so taken, but the
result is that it is unreasonable to continue to operate the Hotel as a hotel of
the same character and class, this Agreement shall terminate. Owner and Manager
shall each have the right to initiate such proceedings as they deem advisable to
recover any damages to which they may be entitled; provided, however, the
Manager shall not be entitled to pursue any such claim if the effect thereof
would reasonably be expected to have the effect of reducing the amount which may
be awarded to Owner.

         (b) In the event a portion of the Hotel shall be taken by the events
described in Article 14.02(a) or the entire Hotel is affected but on a temporary
basis, and the result is not to make it unreasonable to continue to operate the
Hotel, this Agreement shall not terminate. However, PROVIDED THAT OWNER (AND
HOLDINGS, TO THE EXTENT REQUIRED UNDER THE HOTEL LEASE) DETERMINES THAT THE COST
OF REPAIR, REBUILDING OR REPLACEMENT IS JUSTIFIED IN COMPARISON TO THE
ANTICIPATED PROFITABILITY OF THE HOTEL DURING THE REMAINING TERM OF THIS
AGREEMENT, SO MUCH OF ANY AWARD FOR ANY SUCH PARTIAL TAKING OR CONDEMNATION AS
SHALL BE NECESSARY TO RENDER THE HOTEL EQUIVALENT TO ITS CONDITION PRIOR TO SUCH
EVENT SHALL BE USED FOR SUCH PURPOSE; THE BALANCE OF SUCH AWARD, IF ANY, SHALL
BE PAID TO OWNER.

                                      -29-
<PAGE>

         14.03 BUSINESS INTERRUPTION INSURANCE

         Any proceeds from business interruption insurance payable to Owner or
Manager hereunder, including, without limitation, payments made in connection
with, or with respect to periods before or after, the termination of this
Agreement pursuant to Article 14.01 or 14.02, shall be fairly and equitably
apportioned between Owner and Manager in accordance with their respective
interests and equities to the end that the fair value of Manager's expectable
compensation under this Agreement for the period covered by such business
interruption insurance shall be paid to Manager. Any business interruption
insurance paid to Manager pursuant to this Article 14.03 in respect of the
period subsequent to the date of termination of this Agreement shall be credited
against any termination payment payable by Owner to Manager pursuant to Article
14.01 (b).

                                   ARTICLE 15
                             DEFAULT AND TERMINATION

         15.01 EVENTS OF DEFAULT

         It shall be an event of default hereunder (an "Event of Default") if
any one or more of the following events shall occur:

         (a) If a party fails to timely perform any of its obligations and
agreements under this Agreement; or

         (b) If a party shall (i) voluntarily or involuntarily be dissolved
(except that if either party is a partnership and is dissolved solely by reason
of the death, insanity, disappearance, bankruptcy or lack of legal capacity of
one or more of its general partners and its remaining partners, within sixty
(60) days, elect, pursuant the partnership agreement of such partnership to
continue such partnership's business, then such party shall not be considered as
"dissolved" for the purposes hereof); (ii) apply for or consent to the
appointment of a receiver, trustee or liquidator of all or a substantial part of
its assets; (iii) file a voluntary petition in bankruptcy or otherwise
voluntarily avail itself of any federal or state laws for the relief of debtors;
(iv) admit in writing its inability to pay its debts as they become due; (v)
make a general assignment for the benefit of creditors; (vi) file a petition or
an answer seeking reorganization or arrangement with creditors or to take
advantage of any insolvency law or file an answer admitting the material
allegations of any petition filed against it in any bankruptcy, reorganization
or insolvency proceeding; (vii) be the subject of an order, judgment or decree
entered by any court of competent jurisdiction, in the application of any one or
more creditors of such party adjudicating it a bankrupt or insolvent or
approving a petition seeking reorganization or appointing a receiver, trustee or
liquidator of all or a substantial part of its assets, and such order, judgment
or decree shall become final; or (viii) suffer to exist any action or proceeding
to foreclose upon any security interest in the Management Agreement granted by
it.

         15.02 TERMINATION

         (a) Upon the occurrence of any Event of Default under Article 15.0 1(a)
by or with respect to one of the parties hereto (the "Defaulting Party"), the
other party hereto (the "Non-Defaulting Party") shall have the right
(exercisable by the giving of notice to the Defaulting Party) to terminate this
Agreement if the Defaulting Party fails to remedy such Event of Default within
ten (10) days after

                                      -30-
<PAGE>

its receipt of notice to remedy if such default relates to the payment of a sum
of money and, in all other cases, within thirty (30) days after its receipt of
notice to remedy; provided, however, that if such Event of Default be of a
non-monetary nature and if it cannot reasonably be remedied within said thirty
(30) day period, then such thirty (30) day period shall be deemed to be extended
for such additional period as may reasonably be required to remedy the same if
the Defaulting Party shall promptly commence to remedy upon receipt of notice
from the Non-Defaulting Party and shall continue therewith with due diligence.

         (b) With respect to the occurrence of an Event of Default under Article
15.01(b), this Agreement shall terminate, at the election of the Non-Defaulting
Party, upon such occurrence, or at any time after such occurrence provided such
Event of Default has not been remedied.

         (c) The terms of this Agreement shall not be deemed to impair the right
of any party to exercise any right or remedy, whether for damages, injunctions,
specific performance or otherwise, upon any breach or wrongful termination
hereof

                                   ARTICLE 16
                                     NOTICES

         16.01 PROCEDURE

         All consents, approvals, notices or other communications provided for
in this Agreement shall be in writing and shall be deemed delivered when
personally served at, or sent by reputable overnight delivery service or by
postage prepaid Registered or Certified Mail to, the respective addresses for
Owner and Manager set forth in Exhibit 1, until such time as written notice, as
provided hereby, of a change of address with a new address to be used thereafter
is delivered to the other party. Upon request a party shall send copies of any
notice or communication by ordinary mail as instructed by the other party.

                                   ARTICLE 17
                   RELATIONSHIP. AUTHORITY AND FURTHER ACTIONS

         17.01 RELATIONSHIP

         Manager and Owner shall not be construed as joint venturers or partners
of each other and neither shall have the power to bind or obligate the other
except as set forth in this Agreement.

         17.02 FURTHER ACTIONS

         Owner agrees to execute all contracts, agreements and documents, and to
take all actions, necessary to comply with the provisions of this Agreement and
the intent hereof

                                      -31-
<PAGE>

                                   ARTICLE 18
                                 APPLICABLE LAW

         The interpretation, validity and performance of this Agreement shall be
governed by the laws of the State or Commonwealth in which the Hotel is located.
In the event any court or appropriate judicial authority shall hold or declare
that the law of another jurisdiction is applicable, this Agreement shall remain
enforceable under the laws of that jurisdiction. If any of the terms and
provisions hereof shall be held invalid or unenforceable for any reason, such
invalidity or unenforceability shall in no event affect any of the other terms
or provisions hereof, all such other terms and provisions to be valid and
enforceable to the fullest extent permitted by law.

                                   ARTICLE 19
                             SUCCESSORS AND ASSIGNS

         19.01 ASSIGNMENT

         (a) Manager, without the consent of Owner, shall have the right to
assign from time to time this Agreement and its rights and interests hereunder
to (i) any successor or assignee of Manager which may result from any merger,
consolidation or reorganization with, or any sale or assignment to, any
corporation, individual, partnership or other entity which shall acquire all or
substantially all of Manager's hotel management business, and (ii) as security
for any existing or future indebtedness of Manager or its Affiliates. Manager
may also transfer from time to time this Management Agreement and its rights and
interests hereunder without the consent of Owner to any Affiliate of Manager;
provided, however, that no such transfer shall relieve Manager of any of its
liabilities or obligations hereunder. Any such assignee shall agree to be bound
by the terms and conditions of this Agreement. Except as hereinabove provided,
Manager shall not assign or in any manner sell or transfer any of its rights and
interests as Manager hereunder without the prior written consent of Owner.

         (b) Owner shall have the right, without the payment of any transfer or
similar fee, to assign this Agreement to any third party acquiring the Hotel,
subject to Manager's prior written consent, which consent shall not be
unreasonably withheld or delayed.

         19.02 BINDING EFFECT

         Subject to the restrictions on assignment set forth elsewhere in this
Agreement, this Agreement shall be binding upon and inure to the benefit of
Owner and its successors and assigns, and shall be binding upon and inure to the
benefit of Manager and its successors and assigns.

                                   ARTICLE 20
                    AGREEMENT NOT AN INTEREST IN REAL ESTATE

         This Agreement is not, and shall not be deemed or construed, at any
time or for any purpose, to be or create any interest in real estate or any lien
or other encumbrance of any kind whatsoever against the Hotel or the land upon
which it is erected.

                                      -32-
<PAGE>

                                   ARTICLE 21
                                  FORCE MAJEURE

         21.01 OPERATION OF HOTEL

         If at any time during the term hereof it becomes necessary in Manager's
reasonable opinion to cease operation of the Hotel in order to protect the Hotel
and/or the health, safety and welfare of the guests and/or employees of the
Hotel for reasons of force majeure such as, but not limited to, acts of war,
insurrection, civil strife and commotion, labor unrest or acts of God, then in
such event Manager may close and cease operation of all or part of the Hotel,
reopening and commencing operation when Manager, in consultation with Owner,
deems that such may be done without jeopardy to the Hotel, its guests and
employees.

         21.02 EXTENSION OF TIME

         With respect to any obligation to be performed by a party during the
Term, such party shall in no event be liable for failure so to do when prevented
by any force majeure cause beyond the reasonable control of such party such as
strike, lockout, breakdown, accident, order or regulation of or by any
governmental authority, failure of supply or inability, by the exercise of
reasonable diligence, to obtain supplies, parts or employees necessary to
perform such obligation, or war or other emergency. The time within which such
obligation shall be performed shall be extended for a period of time equivalent
to the delay from such cause.

                                   ARTICLE 22
                                   ARBITRATION

         22.01 ARBITRATION PROCEDURES

         Any arbitration referenced in Article 3.04(c), 7.03(b) or 8.02 shall
commence as soon as possible but not more than fifteen (15) days after such need
is determined hereunder. The arbitration shall be held at the Hotel in
accordance with the rules of the American Arbitration Association but not under
the authority of that Association. The arbitration shall be conducted by an
arbitrator named by one of the following accounting firms (selected in the order
named) who shall be an employee or partner of such firm experienced in the work
the firm does for the hotel industry: PKF Consulting; KPMG Peat Marwick; and
Coopers & Lybrand. If none of the named firms or their successor firms are in
existence at the time of a request for arbitration, the parties shall agree on a
similarly experienced accounting firm which shall name the arbitrator and if the
parties are unable to agree, then the arbitrator shall be chosen by the
presiding judge of the highest trial court in the County in which the Hotel is
located. With respect to an Annual Business Plan proposed by Manager for a
Fiscal Year which the Owner has declined to approve pursuant to the provisions
of Article 8.02 and which is the subject of arbitration, the arbitrator shall
decide only that the proposed Annual Business Plan shall or shall not be the
Annual Business Plan for the Fiscal Year; the arbitrator shall not enter

                                      -33-
<PAGE>

a decision deciding upon a compromise of any kind. The decision of the
arbitrator shall be binding upon the parties and no appeal of any kind of the
decision shall be made by either party. The non-prevailing party shall pay the
fees and expenses of the arbitrator and the attorneys' fees of the other party
in the amount fixed by the arbitrator. The parties agree that this Article 22
shall apply only to Article 3.04(c), 7.03(b) and 8.02 and that any other dispute
of any nature whatsoever regarding this Agreement or the operation of the Hotel
shall not be subject to the arbitration procedures set forth in this Article 22.

                                   ARTICLE 23
                               GENERAL PROVISIONS

         23.01 AUTHORIZATION

         Owner represents that it has full power and authority to execute this
Agreement and to be bound by and perform the terms hereof Manager represents
that it has full power and authority to execute this Agreement and to be bound
by and perform the terms hereof On request each party shall furnish the other
evidence of such authority.

         23.02 INTEREST

         Any amount payable to Manager which shall not be paid when due shall
accrue interest at the lesser of (a) the highest legal limit, or (b) 1% over the
rate of interest announced by ____________________________ as its prime rate, as
the same may be changed from time to time.

         23.03 FORMALITIES

         Any change to or modification of this Agreement must be in writing
signed by both parties hereto. This Agreement shall be executed in one or more
counterparts, each of which shall be deemed an original. The captions for each
Article are intended for convenience only.

         23.04 DOCUMENTS

         Throughout the Term, Owner shall furnish Manager copies of all property
tax and insurance statements, all financing documents (including notes and
mortgages) relating to the Hotel and such other documents pertaining to the
Hotel as Manager shall request.

         23.05 CONSENTS

         Except as otherwise expressly provided in this Agreement, wherever in
this Agreement it IS provided that an act or proposed act of Owner or Manager is
subject to the consent or approval of the other, such consent or approval shall
not be unreasonably withheld. The standard to be employed to determine
reasonableness shall be the standard of practices and procedures employed at
comparable hotels then being operated by Manager or its Affiliates. If the
approval or consent of one

                                      -34-
<PAGE>

party hereto is required for any act or matter contemplated by the other party,
the party desiring such consent may give to the party whose consent is desired,
notice specifying in reasonable detail, the matter to which consent is
requested. Unless otherwise specified herein, if the party whose consent is
requested does not, within 20 days after actual receipt of such notice, respond
positively or negatively to such notice in writing, the requested consent shall
conclusively be deemed given.

         23.06 ESTOPPEL CERTIFICATE

         Either party shall, at any time and from time to time, upon not less
than ten (10) days prior written request from the other, execute, acknowledge
and deliver to the requesting party, in form reasonably satisfactory to the
requesting party, a written statement certifying (if true) (i) that this
Agreement is unmodified and in full force and effect (or if there have been
modifications, that the same is in full force and effect as modified and stating
the modifications); (ii) that there is no outstanding notice of an Event of
Default hereunder and, to the best of such party's knowledge, no event has
occurred or condition exists which, with the giving of notice or the passage of
time or both, would constitute an Event of Default hereunder, and (iii) such
other accurate information as may be reasonably requested by the requesting
party or by any of the Interested Persons (as hereinafter defined). It is
intended that any such statement delivered pursuant to this Article 23.06 may be
relied upon by the requesting party, any current or prospective Mortgagee or
other party providing financing to Owner or Manager (as the case may be), a
prospective purchaser of the Hotel or permitted assignee of Manager's rights and
interests hereunder, and the respective successors and assigns of any of the
foregoing (the "Interested Persons").

         23.07 EXTENSION OF DATE OF TERMINATION

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

         23.08 HOTEL RESERVATIONS HONORED

         Upon termination of this Agreement for any reason, Owner agrees that
Hotel reservations made by Manager in the ordinary and normal course of
business, for dates not more than two (2) years after the date of termination
and at rates prevailing for such reservations at the time they were made, shall
be honored and remain in effect after the date of termination of this Agreement.

                                      -35-
<PAGE>

         23.09 NO REPRESENTATIONS

         (a) Owner and Manager acknowledge there have been no representations,
inducements, promises or agreements made by Manager or Owner other than those
specifically set forth herein.

         (b) Financial projections, budgets or similar forecasts as may have
been prepared or in the future are prepared by Manager or its Affiliates do not
take into account, nor make provisions for, any rise or decline in local or
general economic conditions or other factors beyond the control of Manager.
Manager and its Affiliates cannot and do not warrant or guaranty in any way said
financial projections, budgets or other forecasts. Any financial projections,
budgets or forecasts provided have been prepared on the basis of information
available at the time of such preparation and Manager's and its Affiliate's
experience in the hotel industry. Said financial projections, budgets and
forecasts have been prepared for information only and not as an inducement for
action. Owner hereby acknowledges that in entering into this Agreement, Owner
has not relied on any projection of earnings, statements as to the possibility
of future success, or other similar information which may have been prepared by
Manager or its Affiliates. Owner further understands and acknowledges that no
guaranty is made or implied by Manager or its Affiliates as to the cost, or the
future financial success or profitability, of the Hotel.

                         [SIGNATURES ON FOLLOWING PAGE]

                                      -36-
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement effective the Execution Date.

                                    OWNER:

                                    --------------------------------------------

Witness:                            --------------------------------------------

                                    By:
-----------------------------           ----------------------------------------

                                    MANAGER:

                                    ---------------------------------

Witness:                            ---------------------------------

                                    By:
-----------------------------              -------------------------------------
                                    Name:
                                           -------------------------------------
                                    Title:
                                           -------------------------------------

                                      -37-
<PAGE>

                                    EXHIBIT 1

     The following terms shall have the meanings assigned to them below:

       Execution Date -

       Manager -

       Number of Keyed Guest Rooms -

       Owner -

       Hotel -

       Competitive Set -

       Base Yield Index -

     All notices and other communications required or permitted to be given
hereunder shall be given to the applicable party at the address set forth below:

IF TO OWNER, TO:                              IF TO MANAGER, TO:

_________________________________
c/o FelCor Suite Hotels, Inc.
545 E. John Carpenter Frwy.
Suite 1300
Irving, Texas 75062
Attention: Thomas J. Corcoran, Jr.
           President
                                              WITH A COPY TO:
WITH A COPY TO:

Jenkens & Gilchrist, P.C.
3200 Fountain Place
1445 Ross Avenue
Dallas, Texas 75202
Attention:  Robert W. Dockery

                                      -38-
<PAGE>

                                    EXHIBIT A

                                LEGAL DESCRIPTION

<PAGE>

                                    EXHIBIT B

                             [Intentionally Deleted]

                                      -40-
<PAGE>

                                    EXHIBIT C
                               (Article 1.01 (p))

                         SCHEDULE OF PERMITTED MORTGAGES

                            None at the present time.

                                      -41-
<PAGE>

                                    EXHIBIT D

                             [Intentionally Deleted]

                                      -42-

<PAGE>

                                 EXHIBIT E A \~
                                 (Article 12.01)

                         SCHEDULE OF REQUIRED INSURANCE

                          I. Responsibilities of Owner.

         A. At all times during the Term, Owner (or Holdings, to the extent
provided under the Hotel Lease) shall procure and maintain, upon all buildings
and improvements now existing or hereafter erected upon or above the Site, and
all equipment, fixtures, motors, machinery, furnishings and furniture
installed and owned or leased by Owner and used in connection with the Site or
with the buildings and improvements upon or above the Site, including all
alterations, rebuildings, replacements and additions thereto, so-called "all
risk" property damage insurance in an amount equal to the "Full Insurable Value"
thereof (as hereinafter defined), subject, at the option of Owner, to
commercially reasonable deductibles, but in any event in an amount not less than
that required to avoid the operation and effect of any co-insurance provisions
in said policies. Fire insurance policies written with no co-insurance clause
will be acceptable to Manager and Owner. If an insurer, or any governmental
agency or authority having jurisdiction over the Site, shall at any time require
that the foundations be insured in order to relieve the insured from the
responsibility as a coinsurer or for any other purpose, the obligations with
respect to insurance herein shall thenceforth be increased to the extent so
required. All buildings and improvements now existing or hereafter erected upon
or above the Site and all other property required to be covered by fire
insurance in accordance with this paragraph A shall be covered by flood
insurance in an amount at least equal to the Full Insurable Value thereof (or
such lesser amount of flood insurance as may be obtainable at commercially
reasonable rates). The term "Full Insurable Value" shall mean actual replacement
cost (exclusive of cost of excavation, foundations and footings below the lowest
basement floor).

         B. At all times during the Term, Owner (or Holdings, to the extent
provided under the Hotel Lease) shall procure and maintain boiler and machinery
insurance, in the amount of not less than the Full Insurable Value thereof, on
all steam boilers and high pressure boilers, if any, or such other apparatus as
Owner may reasonably deem necessary to be covered by such insurance, installed
within any building on or above the Site.

         C. At all times during the Term, Owner (or Holdings, to the extent
provided under the Hotel Lease) shall procure and maintain Business Interruption
Insurance providing coverage for a period of business interruption of no less
than one year, in an amount mutually satisfactory to Manager and Owner.

         D. At all times during the Term, Owner (or Holdings, to the extent
provided under the Hotel Lease) shall procure and maintain such other insurance
(other than insurance to be provided by Manager pursuant to Section II below) in
such amounts as may from time to time be mutually satisfactory to Owner, Manager
and the Permitted Mortgagee(s) against other insurable hazards which, at the
time, are normally insured against in the case of similar premises and
improvements, similarly situated, due regard being given to the height and type
of buildings and improvements on and above the Site, their location,
construction, use and occupancy.

                                      -43-

<PAGE>

II. Responsibilities of Manager.

         At all times during the Term, Manager shall procure and maintain, as an
Operating Cost of the Hotel, the following insurance coverages:

         A. Workers' compensation as may be required under applicable laws
covering all of Manager's and its Affiliates' employees employed at the Hotel.

         B. Employer's liability insurance in an amount not less than generally
provided at other hotels managed by Manager and its Affiliates.

         C. Fidelity bonds, with reasonable limits and deductibles approved by
Owner, covering employees at the Hotel in job classifications normally bonded in
the other Affiliated Hotels or as otherwise required by law, and comprehensive
crime insurance.

         D. Comprehensive general liability insurance against claims for bodily
injury, death or property damage occurring on, in or about the Hotel, and
automobile insurance on vehicles operated in conjunction with the Hotel, with a
combined single limit for each occurrence for personal injury, death and
property damage in an amount which is not less than that generally provided with
respect to the Affiliated Hotels.

         E. Such other insurance in amounts as Manager and Owner, in their
reasonable judgment, deem advisable for protection against claims, liabilities
and losses arising out of or connected with the operation of the Hotel.

                                      -44 -

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