Document:

Exhibit 4.1

                          SUPPLEMENTAL INDENTURE NO. 6

                                 by and between

                          HOSPITALITY PROPERTIES TRUST

                                       and

                       STATE STREET BANK AND TRUST COMPANY

                               as of July 8, 2002

           SUPPLEMENTAL TO THE INDENTURE DATED AS OF FEBRUARY 25, 1998

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

                          HOSPITALITY PROPERTIES TRUST

                           6.85% Senior Notes due 2012

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         This SUPPLEMENTAL INDENTURE NO. 6 (this "Supplemental  Indenture") made
and entered  into as of July 8, 2002 between  HOSPITALITY  PROPERTIES  TRUST,  a
Maryland real estate investment trust (the "Company"), and STATE STREET BANK AND
TRUST COMPANY, a Massachusetts trust company, as Trustee (the "Trustee").

                                WITNESSETH THAT:

         WHEREAS,  the Company and the Trustee have  executed  and  delivered an
Indenture,  dated as of  February  25, 1998 (the  "Indenture"),  relating to the
Company's issuance, from time to time, of various series of debt securities; and

         WHEREAS,  the Company has determined to issue debt securities  known as
its 6.85% Senior Notes due 2012; and

         WHEREAS,  the Indenture  provides that certain terms and conditions for
each series of debt securities issued by the Company thereunder may be set forth
in an indenture supplemental to the Indenture;

         NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH:

                                    ARTICLE 1

                                  DEFINED TERMS

         Section 1.1 The following  definitions  supplement,  and, to the extent
inconsistent with, replace the definitions in Section 101 of the Indenture:

         "Acquired  Debt"  means Debt of a Person (i)  existing at the time such
Person becomes a Subsidiary or (ii) assumed in connection  with the  acquisition
of assets from such Person, in each case, other than Debt incurred in connection
with,  or in  contemplation  of,  such  Person  becoming  a  Subsidiary  or such
acquisition.  Acquired  Debt shall be deemed to be  incurred  on the date of the
related  acquisition  of assets from any Person or the date the acquired  Person
becomes a Subsidiary.

         "Annual Debt Service" as of any date means the maximum  amount which is
expensed  in any  12-month  period for  interest  on Debt of the Company and its
Subsidiaries.

         "Business  Day" means any day other than a Saturday  or Sunday or a day
on which  banking  institutions  in the City of New York or in the city in which
the Corporate Trust Office of the Trustee is located, are required or authorized
to close.

         "Capital  Stock" means,  with respect to any Person,  any capital stock
(including preferred stock), shares, interests, participation or other ownership
interests  (however  designated)  of such Person and any rights (other than debt
securities  convertible  into or exchangeable  for capital  stock),  warrants or
options to purchase any thereof.

         "Consolidated  Income  Available for Debt Service" for any period means
Earnings from Operations of the Company and its Subsidiaries  plus amounts which
have been deducted,  and

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minus amounts which have been added,  for the following  (without  duplication):
(i)  interest on Debt of the Company and its  Subsidiaries,  (ii) cash  reserves
made by lessees as required by the Company's leases for periodic replacement and
refurbishment of the Company's assets,  (iii) provision for taxes of the Company
and its  Subsidiaries  based on income,  (iv)  amortization of debt discount and
deferred  financing costs, (v) provisions for gains and losses on properties and
property  depreciation and  amortization,  (vi) the effect of any noncash charge
resulting from a change in accounting  principles in  determining  Earnings from
Operations for such period and (vii) amortization of deferred charges.

         "Debt" of the Company or any Subsidiary means, without duplication, any
indebtedness  of the Company or any Subsidiary,  whether or not  contingent,  in
respect of (i)  borrowed  money or  evidenced  by bonds,  notes,  debentures  or
similar  instruments,  (ii)  indebtedness  for  borrowed  money  secured  by any
Encumbrance existing on property owned by the Company or any Subsidiary,  to the
extent of the lesser of (x) the amount of  indebtedness  so secured  and (y) the
fair  market  value of the  property  subject  to such  Encumbrance,  (iii)  the
reimbursement  obligations,  contingent  or otherwise,  in  connection  with any
letters of credit  actually  issued  (other  than  letters  of credit  issued to
provide credit  enhancement or support with respect to other indebtedness of the
Company or any  Subsidiary  otherwise  reflected as Debt  hereunder)  or amounts
representing  the  balance  deferred  and  unpaid of the  purchase  price of any
property  or  services,  except any such  balance  that  constitutes  an accrued
expense or trade payable,  or all  conditional  sale  obligations or obligations
under  any  title  retention  agreement,   (iv)  the  principal  amount  of  all
obligations  of the  Company  or any  Subsidiary  with  respect  to  redemption,
repayment or other  repurchase of any  Disqualified  Stock,  or (v) any lease of
property by the Company or any  Subsidiary  as lessee  which is reflected on the
Company's  consolidated  balance sheet as a capitalized lease in accordance with
GAAP,  to the  extent,  in the case of items of  indebtedness  under (i) through
(iii) above,  that any such items (other than letters of credit) would appear as
a liability on the Company's consolidated balance sheet in accordance with GAAP,
and also includes,  to the extent not otherwise included,  any obligation by the
Company or any Subsidiary to be liable for, or to pay, as obligor,  guarantor or
otherwise  (other than for  purposes of  collection  in the  ordinary  course of
business), Debt of another Person (other than the Company or any Subsidiary) (it
being  understood that Debt shall be deemed to be incurred by the Company or any
Subsidiary  whenever  the  Company  or such  Subsidiary  shall  create,  assume,
guarantee or otherwise become liable in respect thereof).

         "Disqualified  Stock"  means,  with respect to any Person,  any Capital
Stock of such Person which by the terms of such  Capital  Stock (or by the terms
of any security into which it is convertible or for which it is  exchangeable or
exercisable),  upon the  happening of any event or  otherwise  (i) matures or is
mandatorily  redeemable,  pursuant to a sinking  fund  obligation  or  otherwise
(other than  Capital  Stock which is  redeemable  solely in exchange  for common
stock or shares),  (ii) is convertible  into or  exchangeable or exercisable for
Debt or  Disqualified  Stock, or (iii) is redeemable at the option of the holder
thereof,  in whole or in part (other  than  Capital  Stock  which is  redeemable
solely in exchange for common stock or shares),  in each case on or prior to the
stated maturity of the Notes.

         "Earnings from Operations" for any period means net earnings  excluding
gains  and  losses on sales of  investments,  extraordinary  items and  property
valuation  losses,  as reflected in the

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financial  statements  of the  Company  and its  Subsidiaries  for such  period,
determined on a consolidated basis in accordance with GAAP.

         "Encumbrance"  means any  mortgage,  lien,  charge,  pledge or security
interest of any kind.

         "Make-Whole  Amount" means, in connection with any optional  redemption
or accelerated  payment of any Notes prior to January 15, 2012,  the excess,  if
any, of (i) the  aggregate  present  value as of the date of such  redemption or
accelerated  payment of each dollar of principal  being redeemed or paid and the
amount of interest  (exclusive of interest  accrued to the date of redemption or
accelerated  payment)  that would have been payable in respect of such dollar if
such  redemption  or  accelerated  payment  had been made on January  15,  2012,
determined by discounting, on a semiannual basis, such principal and interest at
the  Reinvestment  Rate (determined on the third Business Day preceding the date
such notice of redemption is given or declaration of  acceleration is made) from
the  respective  dates on which  such  principal  and  interest  would have been
payable if such  redemption or accelerated  payment had been made on January 15,
2012,  over (ii) the aggregate  principal  amount of the Notes being redeemed or
paid. In the case of any redemption or accelerated  payment of notes on or after
January  15,  2012,  the  Make-Whole  Amount  means zero.  For  purposes of this
Supplemental Indenture and the Notes, references in the Indenture to the payment
of the principal (and premium, if any) and interest on the Notes shall be deemed
to include the payment of the  Make-Whole  Amount,  if any, due upon  redemption
with respect to the Notes.  The  Make-Whole  Amount shall be  calculated  by the
Company and set forth in an Officer's  Certificate delivered to the Trustee, and
the Trustee shall be entitled to rely on said Officer's Certificate.

         "Notes" means the Company's 6.85% Senior Notes, due 2012,  issued under
this Supplemental  Indenture and the Indenture,  as amended or supplemented from
time to time.

         "Reinvestment  Rate"  means a rate per annum  equal to the sum of 0.50%
(fifty one  hundredths of one percent) plus the yield on treasury  securities at
constant  maturity under the heading "Week Ending"  published in the Statistical
Release  under the  caption  "Treasury  Constant  Maturities"  for the  maturity
(rounded to the nearest month)  corresponding  to the remaining life to maturity
(which,  the case of maturities  corresponding to the principal and interest due
on the notes at their  maturity,  shall be deemed to be January 15, 2012), as of
the payment date of the principal being redeemed or paid. If no maturity exactly
corresponds  to such  maturity,  yields for the two  published  maturities  most
closely  corresponding  to such  maturity  shall be  calculated  pursuant to the
immediately  preceding  sentence and the Reinvestment Rate shall be interpolated
or extrapolated from such yields on a straight-line  basis,  rounding in each of
such relevant  periods to the nearest  month.  For purposes of  calculating  the
Reinvestment  Rate, the most recent  Statistical  Release published prior to the
date of determination of the Make-Whole Amount shall be used.

         "Secured Debt" means Debt secured by any mortgage, lien, charge, pledge
or security interest of any kind.

         "Statistical   Release"  means  the  statistical   release   designated
"H.15(519)"  or any  successor  publication  which is  published  weekly  by the
Federal  Reserve System and which  establishes  yields on actively traded United
States  government  securities  adjusted  to  constant

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maturities or, if such  statistical  release is not published at the time of any
determination  under this Supplemental  Indenture,  then any publicly  available
source of similar market data which shall be designated by the Company.

         "Subsidiary"  means any corporation or other entity of which a majority
of (i) the voting power of the voting equity  securities or (ii) the outstanding
equity interests of which are owned,  directly or indirectly,  by the Company or
one or  more  other  Subsidiaries  of the  Company.  For  the  purposes  of this
definition,  "voting equity  securities"  means equity  securities having voting
power for the election of directors,  whether at all times or only so long as no
senior class of security has such voting power by reason of any contingency.

         "Total  Assets" as of any date  means the sum of (i) the  Undepreciated
Real Estate Assets and (ii) all other assets of the Company and its Subsidiaries
determined  in  accordance  with GAAP (but  excluding  accounts  receivable  and
intangibles).

         "Total  Unencumbered  Assets" means the sum of (i) those  Undepreciated
Real Estate Assets not subject to an Encumbrance for borrowed money and (ii) all
other assets of the Company and its  Subsidiaries  not subject to an Encumbrance
for borrowed money  determined in accordance  with GAAP (but excluding  accounts
receivable and intangibles).

         "Undepreciated  Real  Estate  Assets"  as of any  date  means  the cost
(original cost plus capital  improvements)  of real estate assets of the Company
and  its  Subsidiaries  on  such  date,  before  depreciation  and  amortization
determined on a consolidated basis in accordance with GAAP.

         "Unsecured  Debt"  means  Debt  which  is  not  secured  by  any of the
properties of the Company or any Subsidiary.

                                    ARTICLE 2

                               TERMS OF THE NOTES

         Section 2.1 Pursuant to Section 301 of the  Indenture,  the Notes shall
have the following terms and conditions:

         (a) Title; Limitation on Aggregate Principal Amount; Form of Notes. The
Notes shall be Registered  Securities  under the Indenture and shall be known as
the Company's  "6.85% Senior Notes due 2012." The aggregate  principal amount of
Notes which may be authenticated  and delivered under this Indenture  Supplement
shall not,  except as  permitted  by the  provisions  of the  Indenture,  exceed
$125,000,000  provided that the Company may,  without the consent of the holders
of the Notes,  reopen this series and issue additional Notes under the Indenture
and  this  Indenture  Supplement  in  addition  to  the  $125,000,000  of  Notes
authorized  as of the date  hereof.  The  Notes  (together  with  the  Trustee's
certificate of  authentication)  shall be substantially in the form of Exhibit A
hereto,  which is hereby  incorporated  in and made a part of this  Supplemental
Indenture.

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         The Notes will be issued in the form of one or more  registered  global
securities  without coupons ("Global Notes") which will be deposited with, or on
behalf of, The Depository Trust Company  ("DTC"),  and registered in the name of
DTC's nominee,  Cede & Co. Except under the  circumstance  described  below, the
Notes will not be issuable in definitive form.  Unless and until it is exchanged
in whole or in part for the individual notes represented  thereby, a Global Note
may not be  transferred  except  as a whole by DTC to a  nominee  of DTC or by a
nominee of DTC to DTC or another  nominee of DTC or by DTC or any nominee of DTC
to a successor depositary or any nominee of such successor.

         So long as DTC or its nominee is the registered owner of a Global Note,
DTC or such nominee,  as the case may be, will be  considered  the sole owner or
holder of the Notes  represented by such Global Note for all purposes under this
Supplemental Indenture. Except as described below, owners of beneficial interest
in Notes  evidenced  by a Global  Note will not be  entitled  to have any of the
individual Notes represented by such Global Note registered in their names, will
not  receive or be entitled  to receive  physical  delivery of any such Notes in
definitive  form and will not be considered the owners or holders  thereof under
the Indenture or this Supplemental Indenture.

         If DTC is at any time  unwilling,  unable or  ineligible to continue as
depositary and a successor  depositary is not appointed by the Company within 90
days, the Company will issue individual Notes in exchange for the Global Note or
Global Notes  representing such Notes. In addition,  the Company may at any time
and in its sole  discretion,  subject  to certain  limitations  set forth in the
Indenture,  determine not to have any of such Notes  represented  by one or more
Global Notes and, in such event, will issue individual Notes in exchange for the
Global Note or Global Notes  representing the Notes.  Individual Notes so issued
will be issued in denominations of $1,000 and integral multiples thereof.

         (b) Interest and Interest  Rate. The Notes will bear interest at a rate
of 6.85% per annum,  from July 8, 2002 (or, in the case of Notes issued upon the
reopening of this series of Notes,  from the date  designated  by the Company in
connection  with such  reopening)  or from the  immediately  preceding  Interest
Payment  Date to which  interest  has been paid or duly  provided  for,  payable
semi-annually  in arrears  on  January  15 and July 15 of each year,  commencing
January  15,  2003 or if such  day is not a  Business  Day  (as  defined  in the
Indenture),  on the next  succeeding  Business  Day  (each of which  shall be an
"Interest Payment Date"), to the Persons in whose names the Notes are registered
in the Security Register at the close of business on the day falling14  calendar
days immediately  preceding the applicable interest payment date (whether or not
a Business Day), as the case may be, (each, a "Regular Record Date").

         (c) Principal Repayment;  Currency. The stated maturity of the Notes is
July 15,  2012,  provided,  however,  the Notes may be earlier  redeemed  at the
option of the Company as provided in paragraph (d) below.  The principal of each
Note  payable  on its  maturity  date  shall be paid  against  presentation  and
surrender  thereof  at  the  Corporate  Trust  Office  of the  Trustee,  located
initially at Two Avenue de Lafayette,  Boston, Massachusetts 02111, in such coin
or currency  of the United  States of America as at the time of payment is legal
tender for the  payment of public or private  debts.  The  Company  will not pay
Additional Amounts (as defined in the Indenture) on the Notes.

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         (d) Redemption at the Option of the Company.  The Notes will be subject
to  redemption  at any time at the option of the  Company,  in whole or in part,
upon not less than 30 nor more than 60 days'  notice to each  Holder of Notes to
be redeemed at its address appearing in the Security Register,  at a price equal
to the sum of (i) the principal amount of the Notes being redeemed, plus accrued
and unpaid interest to but excluding the applicable  Redemption  Date, plus (ii)
the Make-Whole Amount, if any. If the notes are redeemed on or after January 15,
2012, the redemption price will not include the Make-Whole Amount.

          (e) Notices. All notices and other  communications  hereunder shall be
in writing and shall be deemed to have been duly given if mailed or  transmitted
by any  standard  form of  telecommunication.  Notices to the  Company  shall be
directed to it at 400 Centre Street,  Newton,  Massachusetts  02458,  Attention:
President;  notices  to the  Trustee  shall be  directed  to it at Two Avenue de
Lafayette, Boston,  Massachusetts 02111, Attention:  Corporate Trust Department,
Re:  Hospitality  Properties Trust 6.85 % Senior Notes due 2012, or as to either
party,  at such other  address as shall be designated by such party in a written
notice to the other party.

         (f) Global  Note  Legend.  Each  Global  Note shall bear the  following
legend on the face thereof:

         UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION  ("DTC"),  TO THE ISSUER OR
ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE
ISSUED  IS  REGISTERED  IN THE NAME OF CEDE & CO.  OR IN SUCH  OTHER  NAME AS IS
REQUESTED  BY AN  AUTHORIZED  REPRESENTATIVE  OF DTC (AND ANY PAYMENT IS MADE TO
CEDE  &  CO.  OR  TO  SUCH  OTHER  ENTITY  AS  IS  REQUESTED  BY  AN  AUTHORIZED
REPRESENTATIVE  OF DTC),  ANY TRANSFER,  PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE  BY OR TO ANY PERSON IS  WRONGFUL  INASMUCH  AS THE  REGISTERED  OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

         (g)  Applicability  of Discharge,  Defeasance  and Covenant  Defeasance
Provisions.  The  Discharge,  Defeasance and Covenant  Defeasance  provisions in
Article Fourteen of the Indenture will apply to the Notes.

                                    ARTICLE 3

                              ADDITIONAL COVENANTS

         Section 3.1 In addition  to the  covenants  of the Company set forth in
Article Ten of the Indenture, for the benefit of the holders of the Notes:

         (a)  Limitations on Incurrence of Debt.

         (i) The Company will not, and will not permit any  Subsidiary to, incur
any  Debt  if,  immediately  after  giving  effect  to the  incurrence  of  such
additional  Debt and the  application  of the proceeds  thereof,  the  aggregate
principal  amount of all outstanding Debt of the Company and

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its  Subsidiaries on a consolidated  basis determined in accordance with GAAP is
greater than 60% of the sum ("Adjusted  Total Assets") of (without  duplication)
(i) the Total  Assets of the Company and its  Subsidiaries  as of the end of the
calendar  quarter  covered in the  Company's  Annual Report on Form 10-K, or the
Quarterly  Report on Form 10-Q, as the case may be, most recently filed with the
Securities and Exchange  Commission  (or, if such filing is not permitted  under
the Securities  Exchange Act of 1934, as amended (the "Exchange Act"),  with the
Trustee) prior to the incurrence of such  additional  Debt and (ii) the purchase
price of any real estate assets or mortgages receivable acquired, and the amount
of any securities  offering  proceeds received (to the extent that such proceeds
were not used to acquire real estate  assets or mortgages  receivable or used to
reduce Debt),  by the Company or any  Subsidiary  since the end of such calendar
quarter,  including those proceeds obtained in connection with the incurrence of
such additional Debt.

         (ii) In addition to the  foregoing  limitations  on the  incurrence  of
Debt,  the Company  will not, and will not permit any  Subsidiary  to, incur any
Secured Debt if,  immediately  after  giving  effect to the  incurrence  of such
additional  Secured  Debt  and the  application  of the  proceeds  thereof,  the
aggregate  principal  amount of all outstanding  Secured Debt of the Company and
its  Subsidiaries on a consolidated  basis is greater than 40% of Adjusted Total
Assets.

         (iii) In addition to the  foregoing  limitations  on the  incurrence of
Debt,  the Company  will not, and will not permit any  Subsidiary  to, incur any
Debt if the ratio of  Consolidated  Income  Available  for Debt  Service  to the
Annual Debt Service for the four consecutive fiscal quarters most recently ended
prior to the date on which such  additional  Debt is to be  incurred  shall have
been less than 1.5x, on a pro forma basis after giving effect thereto and to the
application of the proceeds therefrom, and calculated on the assumption that (i)
such Debt and any other Debt incurred by the Company and its Subsidiaries  since
the first day of such  four-quarter  period and the  application of the proceeds
therefrom,  including to refinance  other Debt, had occurred at the beginning of
such period;  (ii) the  repayment or retirement of any other Debt by the Company
and its Subsidiaries  since the first date of such four-quarter  period had been
repaid or retired at the  beginning of such period  (except that, in making such
computation,  the amount of Debt under any revolving  credit  facility  shall be
computed  based upon the average daily balance of such Debt during such period);
(iii) in the case of  Acquired  Debt or Debt  incurred  in  connection  with any
acquisition  since  the  first  day of such  four-quarter  period,  the  related
acquisition  had  occurred as of the first day of such  period with  appropriate
adjustments  with respect to such  acquisition  being included in such pro forma
calculation;  and  (iv) in the case of any  acquisition  or  disposition  by the
Company or its  Subsidiaries of any asset or group of assets since the first day
of such four-quarter period, whether by merger, stock purchase or sale, or asset
purchase or sale,  such  acquisition or disposition or any related  repayment of
Debt had  occurred  as of the  first  day of such  period  with the  appropriate
adjustments  with respect to such  acquisition or disposition  being included in
such pro  forma  calculation.  If the Debt  giving  rise to the need to make the
foregoing  calculation  or any other  Debt  incurred  after the first day of the
relevant  four-quarter  period  bears  interest  at a floating  rate  then,  for
purposes of calculating the Annual Debt Service,  the interest rate on such Debt
shall be computed on a pro forma  basis as if the  average  interest  rate which
would have been in effect  during the entire such  four-quarter  period had been
the applicable rate for the entire such period.

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         (b)  Maintenance  of Total  Unencumbered  Assets.  The  Company and its
Subsidiaries  will maintain at all times Total  Unencumbered  Assets of not less
than 200% of the aggregate outstanding principal amount of the Unsecured Debt of
the Company and its Subsidiaries on a consolidated basis.

                                    ARTICLE 4

                          ADDITIONAL EVENTS OF DEFAULT

         Section 4.1 For purposes of this Supplemental  Indenture and the Notes,
in addition to the Events of Default set forth in Section 501 of the  Indenture,
it shall also  constitute  an "Event of  Default"  if a default  under any bond,
debenture,  note or other evidence of indebtedness  of the Company  (including a
default with respect to any other series of securities),  or under any mortgage,
indenture or other  instrument of the Company under which there may be issued or
by which there may be secured or evidenced any  indebtedness  for money borrowed
by the Company (or by any  Subsidiary,  the  repayment  of which the Company has
guaranteed or for which the Company is directly responsible or liable as obligor
or  guarantor)  having an aggregate  principal  amount  outstanding  of at least
$20,000,000, whether such indebtedness now exists or shall hereafter be incurred
or created,  which default shall have resulted in such indebtedness  becoming or
being  declared  due and payable  prior to the date on which it would  otherwise
have become due and payable, without such indebtedness having been discharged or
such acceleration  having been rescinded or annulled within a period of ten days
after there shall have been given,  by  registered  or  certified  mail,  to the
Company by the  Trustee or to the  Company  and the Trustee by the Holders of at
least  25% in  principal  amount of the  outstanding  Notes,  a  written  notice
specifying such default and requiring the Company to cause such  indebtedness to
be discharged or cause such acceleration to be rescinded or annulled and stating
that such notice is a "Notice of Default" hereunder.

         Section  4.2  Notwithstanding  any  provisions  to the  contrary in the
Indenture,  upon  any  acceleration  of  the  Notes  under  Section  502  of the
Indenture,  the amount immediately due and payable in respect of the Notes shall
equal the Outstanding principal amount thereof, plus accrued interest,  plus, if
such acceleration occurs prior to January 15, 2012, the Make-Whole Amount.

                                    ARTICLE 5

                                  EFFECTIVENESS

         This  Supplemental  Indenture shall be effective for all purposes as of
the date and time this Supplemental Indenture has been executed and delivered by
the Company and the Trustee in accordance with Article Nine of the Indenture. As
supplemented  hereby,  the Indenture is hereby  confirmed as being in full force
and effect.

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                                    ARTICLE 6

                                  MISCELLANEOUS

         Section 6.1 In the event any provision of this  Supplemental  Indenture
shall be held invalid or unenforceable  by any court of competent  jurisdiction,
such holding shall not invalidate or render  unenforceable  any other  provision
hereof or any provision of the Indenture.

         Section 6.2 To the extent that any terms of this Supplemental Indenture
or the Notes are inconsistent with the terms of the Indenture, the terms of this
Supplemental Indenture or the Notes shall govern and supersede such inconsistent
terms.

         Section  6.3  This  Supplemental  Indenture  shall be  governed  by and
construed in accordance with the laws of The Commonwealth of Massachusetts.

         Section  6.4 This  Supplemental  Indenture  may be  executed in several
counterparts,  each  of  which  shall  be an  original  and all of  which  shall
constitute but one and the same instrument.

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         IN WITNESS  WHEREOF,  the  Company  and the  Trustee  have  caused this
Supplemental  Indenture  to be  executed  as an  instrument  under seal in their
respective corporate names as of the date first above written.

                                  HOSPITALITY PROPERTIES TRUST

                                  By: /s/ John G. Murray
                                     Name:  John G. Murray
                                     Title: President

                                  STATE STREET BANK AND TRUST
                                     COMPANY, as Trustee

                                  By: /s/ Ruth A. Smith
                                     Name:  Ruth A. Smith
                                     Title: Vice President

         (SEAL)

Attest: /s/ Maria A. Barbieri

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<PAGE>

                                                                       EXHIBIT A

                                 (Face of Note)

                           6.85% Senior Notes due 2012

No.                                                                  $__________

                          HOSPITALITY PROPERTIES TRUST

promises  to  pay  to   _______________________________________   or  registered
assigns, the principal sum of  _____________________________________  Dollars on
July 15, 2012.

         Interest Payment Dates:  January 15 and July 15, commencing January 15,
         2003.  Record  Dates:  the day  falling 14  calendar  days prior to any
         Interest Payment Date.

CUSIP No:  _____________

                                         HOSPITALITY PROPERTIES TRUST

                                         By:______________________________
                                            Name:
                                            Title:

Dated:

This is one of the Notes referred to in the within-mentioned Indenture:

STATE STREET BANK AND TRUST COMPANY, as Trustee

By:______________________________
    Authorized Officer

                                       A-1
<PAGE>

             [THE FOLLOWING CONSTITUTES THE REVERSE OF THE SECURITY]

                          HOSPITALITY PROPERTIES TRUST

                           6.85% Senior Notes due 2012

         Capitalized terms used herein have the meanings assigned to them in the
Indenture (as defined below) unless otherwise indicated.

         1.  Interest.  Hospitality  Properties  Trust,  a Maryland  real estate
investment  trust (the  "Company"),  promises to pay  interest on the  principal
amount of this Note at the rate and in the manner specified below.

         The Company shall pay in cash interest on the principal  amount of this
Note at the rate per annum of 6.85%. The Company will pay interest semi-annually
in arrears on January  15 and July 15 of each year,  commencing  on January  15,
2003 or if any such day is not a Business Day (as defined in the Indenture),  on
the next succeeding  Business Day (each an "Interest  Payment Date"), to Holders
of record  on the day  falling  14  calendar  days  immediately  preceding  such
Interest Payment Date (whether or not a Business Day).

         Interest will be computed on the basis of a 360-day year  consisting of
twelve 30-day  months.  Interest shall accrue from the most recent date to which
interest  has been paid or, if no interest  has been paid,  from the date of the
original issuance of the Notes.

         2.  Method of  Payment.  The  Company  will pay  interest  on the Notes
(except defaulted  interest) to the Persons who are registered  Holders of Notes
at the close of business on the record date next preceding the Interest  Payment
Date,  even if such Notes are  canceled  after such record date and on or before
such Interest Payment Date. The Company will pay principal and interest in money
of the United  States that at the time of payment is legal tender for payment of
public and private debts. The Company,  however, may pay principal,  premium, if
any, and interest by check payable in such money.  It may mail an interest check
to a Holder's registered address.

         3. Indenture.  The Company issued the Notes under an Indenture dated as
of February 25, 1998 and  Supplemental  Indenture No. 6 dated as of July 8, 2002
(collectively,  the "Indenture")  between the Company and the Trustee. The terms
of the Notes  include  those stated in the  Indenture and those made part of the
Indenture by reference to the Trust  Indenture  Act of 1939 (15 U.S. Code ss.ss.
77aaa-77bbbb)  as in effect on the date of the Indenture.  The Notes are subject
to all such terms,  and Holders of the Notes are referred to the  Indenture  and
such Act for a statement of such terms.  The terms of the Indenture shall govern
any inconsistencies between the Indenture and the Notes. The Notes are unsecured
general  obligations of the Company  initially issued in an aggregate  principal
amount of $125,000,000.

         4. Optional Redemption.  The Notes will be subject to redemption at any
time at the option of the  Company,  in whole or in part,  upon not less than 30
nor more than 60 days' notice, at a redemption price equal to the sum of (i) the
principal  amount of the Notes being redeemed,  plus accrued and unpaid interest
to but excluding the applicable Redemption Date and (ii) the Make-Whole Amount.

                                      A-2
<PAGE>

         As used herein the term  "Make-Whole  Amount" means, in connection with
any optional redemption or accelerated payment of any notes prior to January 15,
2012, the excess,  if any, of (i) the aggregate  present value as of the date of
such  redemption  or  accelerated  payment  of each  dollar of  principal  being
redeemed or paid and the amount of interest  (exclusive  of interest  accrued to
the date of redemption or  accelerated  payment) that would have been payable in
respect of such dollar if such  redemption or accelerated  payment had been made
on January 15, 2012,  determined by  discounting,  on a semiannual  basis,  such
principal  and  interest  at the  Reinvestment  Rate  (determined  on the  third
Business  Day  preceding  the  date  such  notice  of  redemption  is  given  or
declaration of  acceleration  is made) from the  respective  dates on which such
principal and interest would have been payable if such redemption or accelerated
payment had been made on January 15,  2012,  over (ii) the  aggregate  principal
amount of the Notes being  redeemed or paid.  In the case of any  redemption  or
accelerated payment of notes on or after January 15, 2012, the Make-Whole Amount
means zero.  For  purposes of the  Indenture  and the Notes,  references  in the
Indenture to the payment of the principal (and premium,  if any) and interest on
the Notes shall be deemed to include the payment of the  Make-Whole  Amount,  if
any, due upon redemption with respect to the Notes. The Make-Whole  Amount shall
be calculated by the Company and set forth in an Officer's Certificate delivered
to the  Trustee,  and the Trustee  shall be  entitled to rely on said  Officer's
Certificate.

         As used  herein  the term  "Reinvestment  Rate"  means a rate per annum
equal to the sum of 0.50% (fifty one  hundredths  of one percent) plus the yield
on treasury  securities  at constant  maturity  under the heading  "Week Ending"
published  in the  Statistical  Release  (as defined  herein)  under the caption
"Treasury  Constant  Maturities" for the maturity (rounded to the nearest month)
corresponding  to  the  remaining  life  to  maturity  (which,  in the  case  of
maturities corresponding to the principal and interest due on the notes at their
maturity, shall be deemed to be January 15, 2012), as of the payment date of the
principal  being  redeemed or paid. If no maturity  exactly  corresponds to such
maturity,  yields for the two published maturities most closely corresponding to
such maturity shall be calculated pursuant to the immediately preceding sentence
and the Reinvestment Rate shall be interpolated or extrapolated from such yields
on a  straight-line  basis,  rounding  in each of such  relevant  periods to the
nearest  month.  For purposes of  calculating  the  Reinvestment  Rate, the most
recent  Statistical  Release published prior to the date of determination of the
Make-Whole Amount shall be used.

         As used herein the term  "Statistical  Release"  means the  statistical
release designated  "H.15(519)" or any successor  publication which is published
weekly by the Federal  Reserve System and which  establishes  yields on actively
traded United States government  securities  adjusted to constant maturities or,
if such  statistical  release is not published at the time of any  determination
under the Supplemental Indenture,  then any publicly available source of similar
market data which shall be designated by the Company.

         5.  Mandatory  Redemption.  The  Company  shall not be required to make
sinking fund or redemption payments with respect to the Notes.

         6. Notice of Redemption.  Notice of redemption shall be mailed at least
30 days but not more than 60 days before the  Redemption  Date to each Holder of
Notes to be redeemed at its  registered  address.  Notes may be redeemed in part
but only in whole multiples of $1,000,  unless

                                      A-3
<PAGE>

all  of the  Notes  held  by a  Holder  are to be  redeemed.  On and  after  the
redemption  date,  interest ceases to accrue on Notes or portions of them called
for redemption.

         7. Denominations,  Transfer, Exchange. The Notes are in registered form
without coupons in denominations  of $1,000 and integral  multiples of $1,000 in
excess  thereof.  The  transfer  of Notes  may be  registered  and  Notes may be
exchanged as provided in the Indenture.  The Security  Registrar and the Trustee
may require a Holder,  among other things, to furnish  appropriate  endorsements
and  transfer  documents  and to pay  any  taxes  and  fees  required  by law or
permitted by the Indenture. The Security Registrar need not exchange or register
the transfer of any Note or portion of a Note selected for redemption.  Also, it
need not  exchange or register the transfer of any Notes for a period of 15 days
before the  mailing  of a notice of  redemption  of Notes,  or during the period
between a record date and the corresponding Interest Payment Date.

         8.  Defaults and  Remedies.  In case an Event of Default (as defined in
the Indenture)  with respect to the Notes shall have occurred and be continuing,
the principal hereof may be declared,  and upon such  declaration  shall become,
due and payable,  in the manner,  with the effect and subject to the  provisions
provided in the Indenture.

         9. Actions of Holders. The Indenture contains provisions permitting the
holders of not less than a majority  of the  aggregate  principal  amount of the
outstanding  Notes,  subject to certain exceptions as provided in the Indenture,
on behalf of the holders of all such Notes at a meeting  duly called and held as
provided  in  the  Indenture,  to  make,  give  or  take  any  request,  demand,
authorization,  direction,  notice,  consent, waiver or other action provided in
the Indenture to be made, given or taken by the holders of the Notes,  including
without  limitation,   waiving  (a)  compliance  by  the  Company  with  certain
provisions of the  Indenture,  and (b) certain past defaults under the Indenture
and their  consequences.  Any resolution passed or decision taken at any meeting
of the holders of the Notes in accordance  with the  provisions of the Indenture
shall be conclusive and binding upon such holders and upon all future holders of
this Note and other Notes issued upon the  registration of transfer hereof or in
exchange heretofore or in lieu hereof.

         10. Persons Deemed Owners. The Company,  the Trustee,  and any agent of
the Company or the Trustee may deem and treat the Person in whose name this Note
is registered on the Security Register as its absolute owner for all purposes.

         11. Authentication. This Note shall not be valid until authenticated by
the manual signature of the Trustee or an authenticating agent.

         12.   Governing   Law.  THE  INTERNAL  LAW  OF  THE   COMMONWEALTH   OF
MASSACHUSETTS SHALL GOVERN AND BE USED TO CONSTRUE THE INDENTURE AND THE NOTES.

         13. No Personal  Liability.  THE  DECLARATION  OF TRUST OF THE COMPANY,
AMENDED AND  RESTATED ON AUGUST 21,  1995,  A COPY OF WHICH,  TOGETHER  WITH ALL
AMENDMENTS  THERETO  (THE  "DECLARATION"),  IS DULY  FILED IN THE  OFFICE OF THE
DEPARTMENT OF ASSESSMENTS  AND TAXATION OF THE STATE OF MARYLAND,  PROVIDES THAT
THE NAME  "HOSPITALITY  PROPERTIES  TRUST"  REFERS  TO THE  TRUSTEES  UNDER  THE
DECLARATION  COLLECTIVELY AS

                                      A-4
<PAGE>

TRUSTEES,  BUT NOT  INDIVIDUALLY  OR PERSONALLY,  AND THAT NO TRUSTEE,  OFFICER,
SHAREHOLDER,  EMPLOYEE  OR AGENT OF THE  COMPANY  SHALL BE HELD TO ANY  PERSONAL
LIABILITY,  JOINTLY OR SEVERALLY,  FOR ANY OBLIGATION OF, OR CLAIM AGAINST,  THE
COMPANY.  ALL PERSONS  DEALING WITH THE COMPANY,  IN ANY WAY, SHALL LOOK ONLY TO
THE ASSETS OF THE COMPANY FOR THE PAYMENT OF ANY SUM OR THE  PERFORMANCE  OF ANY
OBLIGATION.

         The Company will furnish to any Holder upon written request and without
charge a copy of the Indenture. Request may be made to:

                          Hospitality Properties Trust
                          400 Centre Street
                          Newton, MA 02458
                          Telecopier No.: (617) 964-8389
                          Attention: President

                                      A-5
<PAGE>

                                 ASSIGNMENT FORM

                  To assign this Note, fill in the form below:
                  (I) or (we) assign and transfer this Note to

                  (Insert assignee's soc. sec. or tax I.D. no.)

              (Print or type assignee's name, address and zip code)

and irrevocably  appoint to transfer this Note on the books of the Company.  The
agent may substitute another to act for him.

Date:

                                       Your Signature:

                                       (Sign exactly as your name appears on the
                                       face of this Note)

Signature Guarantee:Exhibit 10.1

                   SECOND AMENDED AND RESTATED LEASE AGREEMENT

                           Dated as of April 12, 2002

                                 by and between

                            HPT CW PROPERTIES TRUST,
                                  AS LANDLORD,

                                       AND

                         CANDLEWOOD LEASING NO. 1, INC.,
                                    AS TENANT

<PAGE>

                                Table of Contents

                                                                            Page

ARTICLE 1           DEFINITIONS................................................2
         1.1  Accounting Period................................................2
         1.2  Additional Charges...............................................2
         1.3  Additional Leased Property.......................................3
         1.4  Additional Rent..................................................3
         1.5  Affiliated Person................................................3
         1.6  Agreement........................................................3
         1.7  Amended Lease....................................................3
         1.8  Applicable Laws..................................................3
         1.9  Applicable Percentage............................................4
         1.10  Award...........................................................4
         1.11  Base Total Hotel Sales..........................................4
         1.12  Base Year.......................................................5
         1.13  Business Day....................................................5
         1.14  Candlewood......................................................5
         1.15  Capital Addition................................................5
         1.16  Capital Expenditure.............................................5
         1.17  Change in Control...............................................5
         1.18  Claim...........................................................6
         1.19  Code............................................................6
         1.20  Commencement Date...............................................6
         1.21  Condemnation....................................................6
         1.22  Condemnor.......................................................7
         1.23  Consolidated Financials.........................................7
         1.24  Date of Taking..................................................7
         1.25  Default.........................................................7
         1.26  Designated Areas One............................................7
         1.27  Designated Areas Two............................................7
         1.28  Disbursement Rate...............................................7
         1.29  Distribution....................................................8
         1.30  Easement Agreement..............................................8
         1.31  Encumbrance.....................................................8
         1.32  Entity..........................................................8
         1.33  Environment.....................................................8
         1.34  Environmental Obligation........................................8
         1.35  Environmental Notice............................................8
         1.36  Event of Default................................................8
         1.37  Excess Total Hotel Sales........................................8
         1.38  Extended Terms..................................................9
         1.39  FF&E Estimate...................................................9
         1.40  FF&E Pledge.....................................................9
         1.41  FF&E Reserve....................................................9
         1.42  Financial Officer's Certificate.................................9

                                       i
<PAGE>

                                Table of Contents
                                   (continued)
                                                                            Page

         1.43  First Lease.....................................................9
         1.44  Fiscal Year.....................................................9
         1.45  Fixed Term......................................................9
         1.46  Fixtures........................................................9
         1.47  GAAP............................................................9
         1.48  Government Agencies.............................................9
         1.49  Guaranty.......................................................10
         1.50  Hazardous Substances...........................................10
         1.51  Hotel..........................................................11
         1.52  Hotel Mortgage.................................................11
         1.53  Hotel Mortgagee................................................11
         1.54  HPT CW I Leased Property.......................................11
         1.55  HPT CW II Leased Property......................................11
         1.56  Immediate Family...............................................11
         1.57  Impositions....................................................11
         1.58  Incidental Documents...........................................12
         1.59  Indebtedness...................................................13
         1.60  Insurance Requirements.........................................13
         1.61  Interest Rate..................................................13
         1.62  Land...........................................................13
         1.63  Landlord.......................................................13
         1.64  Landlord Default...............................................13
         1.65  Landlord Liens.................................................13
         1.66  Lease Year.....................................................13
         1.67  Leased Improvements............................................13
         1.68  Leased Intangible Property.....................................13
         1.69  Leased Personal Property.......................................14
         1.70  Leased Property................................................14
         1.71  Legal Requirements.............................................14
         1.72  Lien...........................................................14
         1.73  Management Agreement...........................................15
         1.74  Manager........................................................15
         1.75  Minimum Rent...................................................15
         1.76  Net Worth......................................................15
         1.77  New Leased Property............................................15
         1.78  Notice.........................................................15
         1.79  Officer's Certificate..........................................15
         1.80  Opening Date...................................................15
         1.81  Original Leases................................................15
         1.82  Original Leased Property.......................................15
         1.83  Overdue Rate...................................................15
         1.84  Parent.........................................................16
         1.85  Permitted Encumbrances.........................................16
         1.86  Permitted Liens................................................16

                                       ii
<PAGE>

                                Table of Contents
                                   (continued)
                                                                            Page

         1.87  Permitted Use..................................................16
         1.88  Person.........................................................16
         1.89  Property.......................................................16
         1.90  Purchase Documents.............................................16
         1.91  Records........................................................17
         1.92  Rent...........................................................17
         1.93  Retained Funds.................................................17
         1.94  SEC............................................................17
         1.95  Second Lease...................................................17
         1.96  Security Agreement.............................................17
         1.97  State..........................................................17
         1.98  Stock Pledge Agreement.........................................17
         1.99  Subordinated Creditor..........................................17
         1.100  Subordination Agreement.......................................18
         1.101  Subsidiary....................................................18
         1.102  Successor Landlord............................................18
         1.103  Tenant........................................................18
         1.104  Tenant's Personal Property....................................18
         1.105  Term..........................................................18
         1.106  Total Hotel Sales.............................................18
         1.107  Uniform System of Accounts....................................19
         1.108  Unsuitable for Its Permitted Use..............................19
         1.109  Work..........................................................20
ARTICLE 2           LEASED PROPERTY AND TERM..................................20
         2.1  Leased Property.................................................20
         2.2  Condition of Leased Property....................................21
         2.3  Fixed Term......................................................22
         2.4  Extended Term...................................................22
ARTICLE 3           RENT......................................................23
         3.1  Rent............................................................23
              3.1.1    Minimum Rent...........................................23
              3.1.2    Additional Rent........................................24
              3.1.3    Additional Charges.....................................27
         3.2  Late Payment of Rent, Etc.......................................29
         3.3  Net Lease.......................................................29
         3.4  No Termination, Abatement, Etc..................................30
         3.5  Retained Funds..................................................31
ARTICLE 4           USE OF THE LEASED PROPERTY................................32
         4.1  Permitted Use...................................................32
              4.1.1    Permitted Use..........................................32
              4.1.2    Necessary Approvals....................................33
              4.1.3    Lawful Use, Etc........................................33
         4.2  Compliance with Legal/Insurance Requirements, Etc...............33

                                      iii
<PAGE>
                                Table of Contents
                                   (continued)
                                                                            Page

         4.3  Environmental Matters...........................................34
              4.3.1    Restriction on Use, Etc................................34
              4.3.2    Indemnification of Landlord............................35
              4.3.3    Survival...............................................36
ARTICLE 5           MAINTENANCE AND REPAIRS...................................37
         5.1  Maintenance and Repair..........................................37
              5.1.1    Tenant's General Obligations...........................37
              5.1.2    FF&E Reserve...........................................37
              5.1.3    Landlord's Obligations.................................39
              5.1.4    Nonresponsibility of Landlord, Etc.....................40
         5.2  Tenant's Personal Property......................................41
         5.3  Yield Up........................................................41
         5.4  Management Agreement............................................42
ARTICLE 6           IMPROVEMENTS, ETC.........................................42
         6.1  Improvements to the Leased Property.............................42
         6.2  Salvage.........................................................43
ARTICLE 7           LIENS.....................................................44
         7.1  Liens...........................................................44
         7.2  Landlord's Lien.................................................44
ARTICLE 8           PERMITTED CONTESTS........................................45
ARTICLE 9           INSURANCE AND INDEMNIFICATION.............................46
         9.1  General Insurance Requirements..................................46
         9.2  Replacement Cost................................................47
         9.3  Waiver of Subrogation...........................................48
         9.4  Form Satisfactory, Etc..........................................48
         9.5  Blanket Policy..................................................49
         9.6  No Separate Insurance...........................................49
         9.7  Indemnification of Landlord.....................................49
ARTICLE 10          CASUALTY..................................................51
         10.1  Insurance Proceeds.............................................51
         10.2  Damage or Destruction..........................................51
              10.2.1   Damage or Destruction of Leased Property...............51
              10.2.2   Partial Damage or Destruction..........................52
              10.2.3   Insufficient Insurance Proceeds........................52
              10.2.4   Disbursement of Proceeds...............................52
         10.3  Damage Near End of Term........................................54
         10.4  Tenant's Property..............................................54
         10.5  Restoration of Tenant's Property...............................54
         10.6  No Abatement of Rent...........................................54
         10.7  Waiver.........................................................55
ARTICLE 11          CONDEMNATION..............................................55
         11.1  Total Condemnation, Etc........................................55

                                       iv
<PAGE>

                                Table of Contents
                                   (continued)
                                                                            Page

         11.2  Partial Condemnation...........................................55
         11.3  Abatement of Rent..............................................57
         11.4  Temporary Condemnation.........................................57
         11.5  Condemnation Near End of Term..................................57
         11.6  Allocation of Award............................................57
ARTICLE 12          DEFAULTS AND REMEDIES.....................................58
         12.1  Events of Default..............................................58
         12.2  Remedies.......................................................61
         12.3  Tenant's Waiver................................................63
         12.4  Application of Funds...........................................63
         12.5  Landlord's Right to Cure Tenant's Default......................63
ARTICLE 13          HOLDING OVER..............................................64
ARTICLE 14          LANDLORD'S NOTICE OBLIGATIONS; LANDLORD DEFAULT...........64
         14.1  Landlord Notice Obligation.....................................64
         14.2  Landlord's Default.............................................64
         14.3  Indemnification of Tenant......................................65
ARTICLE 15          PURCHASE RIGHTS...........................................66
ARTICLE 16          SUBLETTING AND ASSIGNMENT.................................66
         16.1  Subletting and Assignment......................................66
         16.2  Required Sublease Provisions...................................67
         16.3  Permitted Sublease.............................................69
         16.4  Sublease Limitation............................................69
ARTICLE 17          ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS............70
         17.1  Estoppel Certificates..........................................70
         17.2  Financial Statements...........................................70
ARTICLE 18          LANDLORD'S RIGHT TO INSPECT...............................71
ARTICLE 19          EASEMENTS.................................................71
         19.1  Grant of Easements.............................................72
         19.2  Exercise of Rights by Tenant...................................72
         19.3  Permitted Encumbrances.........................................72
ARTICLE 20          HOTEL MORTGAGES...........................................72
         20.1  Landlord May Grant Liens.......................................72
         20.2  Subordination of Lease.........................................73
         20.3  Notice to Mortgagee and Superior Landlord......................75
ARTICLE 21          ADDITIONAL COVENANTS OF TENANT............................75
         21.1  Prompt Payment of Indebtedness.................................75
         21.2  Conduct of Business............................................75
         21.3  Maintenance of Accounts and Records............................76
         21.4  Notice of Litigation, Etc......................................76
         21.5  Notice of Discontinuance of Operation..........................76
         21.6  Indebtedness of Tenant.........................................76
         21.7  Financial Condition of Tenant..................................77

                                       v
<PAGE>

                                Table of Contents
                                   (continued)
                                                                            Page

         21.8  Distributions, Payments to Affiliated Persons, Etc.............78
         21.9  Prohibited Transactions........................................78
         21.10  Liens and Encumbrances........................................78
         21.11  Merger; Sale of Assets; Etc...................................78
ARTICLE 22          MISCELLANEOUS.............................................79
         22.1  Limitation on Payment of Rent..................................79
         22.2  No Waiver......................................................79
         22.3  Remedies Cumulative............................................80
         22.4  Severability...................................................80
         22.5  Acceptance of Surrender........................................80
         22.6  No Merger of Title.............................................80
         22.7  Conveyance by Landlord.........................................80
         22.8  Quiet Enjoyment................................................81
         22.9  Memorandum of Lease............................................81
         22.10  Notices.......................................................82
         22.11  Trade Area Restriction........................................83
         22.12  Construction..................................................85
         22.13  Counterparts; Headings........................................85
         22.14  Applicable Law, Etc...........................................85
         22.15  Right to Make Agreement.......................................86
         22.16  Attorneys' Fees...............................................86
         22.17  Nonrecourse...................................................87
         22.18  Nonliability of Trustees......................................87

EXHIBITS
A-1 through A-57- The Land
B-1 through B-2 - Restricted Trade Area
C - Allocation of Minimum Rent

                                       vi
<PAGE>
                  SECOND AMENDED AND RESTATED LEASE AGREEMENT

         THIS SECOND AMENDED AND RESTATED LEASE  AGREEMENT is entered into as of
this 12th day of April, 2002, by and between HPT CW PROPERTIES TRUST, a Maryland
real estate investment trust, as landlord  ("Landlord"),  and CANDLEWOOD LEASING
NO. 1, INC., a Delaware corporation, as tenant ("Tenant").

                              W I T N E S S E T H :

         WHEREAS,  pursuant to a Lease Agreement,  dated as of December 24, 1997
(as amended,  the "First Lease") between  Landlord,  as lessor,  and Tenant,  as
lessee,  Landlord  agreed to lease  seventeen  (17) hotel  properties  to Tenant
(collectively, the "HPT CW I Leased Property"); and

         WHEREAS,  pursuant to a Lease  Agreement,  dated as of May 20, 1998 (as
amended,  the "Second Lease" and,  together with the First Lease,  collectively,
the  "Original  Leases")  between HPT CW II  Properties  Trust ("HPT CW II"), as
lessor, and Candlewood  Leasing No. 2, Inc.  ("Candlewood 2"), as lessee, HPT CW
II agreed to lease seventeen (17) hotel properties (collectively, the "HPT CW II
Leased Property" and, together with the HPT CW I Leased Property,  collectively,
the "Original Leased Property") to Candlewood 2; and

         WHEREAS,  HPT  CW II  has  merged  into  Landlord  and,  in  connection
therewith,  transferred to Landlord HPT CW II's entire right, title and interest
in and to the HPT CW II Leased Property; and

         WHEREAS,  Candlewood  2 has  merged  into  Tenant  and,  in  connection
therewith, transferred to Tenant Candlewood 2's entire right, title and interest
in and to the HPT CW II Leased Property; and

         WHEREAS, on August 10, 2001, Landlord acquired two (2) additional hotel
properties   located  in  Mt.   Laurel,   New  Jersey  and  Las  Vegas,   Nevada
(collectively, the "Additional Leased Property"); and

         WHEREAS, pursuant to an Amended and Restated Lease Agreement,  dated as
of August 10,  2001 (the  "Amended  Lease"),  Landlord  and Tenant  amended  and
restated the Original  Leases to consolidate  the Original  Leases into a single
lease and to
<PAGE>

include  the  Additional  Leased  Property  among the  Leased  Property  demised
thereby; and

         WHEREAS, simultaneously herewith, Landlord is acquiring twenty-one (21)
additional hotel properties (collectively, the "New Leased Property"); and

         WHEREAS,  as a result of the foregoing,  Landlord owns fee simple title
to the Leased Property (this and other  capitalized terms used and not otherwise
defined  herein  having  the  meanings  ascribed  to such  terms in  Article  1)
described in Exhibit A-1 through A-57; and

         WHEREAS,  Landlord  and Tenant  wish to amend and  restate  the Amended
Lease to include  the New Leased  Property  among the  Leased  Property  demised
thereby, subject to, and upon, the terms and conditions contained herein; and

         NOW,  THEREFORE,  in  consideration  of  the  mutual  covenants  herein
contained  and other good and  valuable  consideration,  the mutual  receipt and
legal sufficiency of which are hereby  acknowledged,  Landlord and Tenant hereby
agree as follows:

                                   ARTICLE 1

                                  DEFINITIONS

         For all  purposes  of this  Agreement,  except as  otherwise  expressly
provided or unless the context otherwise requires, (i) the terms defined in this
Article shall have the meanings assigned to them in this Article and include the
plural as well as the singular,  (ii) all accounting terms not otherwise defined
herein shall have the meanings  assigned to them in accordance with GAAP,  (iii)
all references in this Agreement to designated  "Articles," "Sections" and other
subdivisions are to the designated Articles,  Sections and other subdivisions of
this  Agreement,  and (iv) the words "herein,"  "hereof,"  "hereunder" and other
words of  similar  import  refer  to this  Agreement  as a whole  and not to any
particular Article, Section or other subdivision.

         1.1 "Accounting Period" shall mean each calendar month.

         1.2  "Additional  Charges"  shall have the  meaning  given such term in
Section 3.1.3.

                                      -2-
<PAGE>

         1.3 "Additional Leased Property" shall have the meaning given such term
in the preambles to this Agreement.

         1.4 "Additional Rent" shall have the meaning given such term in Section
3.1.2(a).

         1.5 "Affiliated  Person" shall mean, with respect to any Person, (a) in
the  case of any  such  Person  which  is a  partnership,  any  partner  in such
partnership,  (b) in the case of any such  Person  which is a limited  liability
company,  any member of such company,  (c) any other Person which is a Parent, a
Subsidiary, or a Subsidiary of a Parent with respect to such Person or to one or
more of the Persons  referred to in the  preceding  clauses (a) and (b), (d) any
other Person who is an officer,  director, trustee or employee of, or partner in
or member of, such Person or any Person  referred  to in the  preceding  clauses
(a),  (b) and (c),  and (e) any other  Person  who is a member of the  Immediate
Family of such Person or of any Person referred to in the preceding  clauses (a)
through (d).

         1.6  "Agreement"  shall mean this  Second  Amended and  Restated  Lease
Agreement,  including  Exhibits A, B and C hereto, as it and they may be amended
from time to time as herein provided.

         1.7  "Amended  Lease"  shall  have the  meaning  given such term in the
preambles to this Agreement.

         1.8  "Applicable  Laws"  shall  mean  all  applicable  laws,  statutes,
regulations,  rules, ordinances,  codes, licenses,  permits, orders, actions and
policies from time to time in existence, of all courts of competent jurisdiction
and Government  Agencies,  and all applicable  judicial and  administrative  and
regulatory  decrees,  judgments  and  orders,  including  common law rulings and
determinations,  relating to injury to, or the  protection  of, real or personal
property or human health or the Environment,  including, without limitation, all
valid and lawful requirements of courts and other Government Agencies pertaining
to reporting, licensing, permitting,  investigation,  remediation and removal of
underground  improvements (including,  without limitation,  treatment or storage
tanks,  or water,  gas or oil  wells),  or  emissions,  discharges,  releases or
threatened releases of Hazardous  Substances,  chemical substances,  pesticides,
petroleum or petroleum products, pollutants,  contaminants or hazardous or toxic
substances, materials or wastes whether solid, liquid or

                                      -3-
<PAGE>

gaseous  in  nature,  into the  Environment,  or  relating  to the  manufacture,
processing,  distribution,  use,  treatment,  storage,  disposal,  transport  or
handling of Hazardous Substances,  underground improvements (including,  without
limitation,  treatment  or  storage  tanks,  or  water,  gas or oil  wells),  or
pollutants,  contaminants or hazardous or toxic substances, materials or wastes,
whether solid, liquid or gaseous in nature.

         1.9  "Applicable  Percentage"  shall  mean  (a)  with  respect  to each
Original Leased Property, five percent (5%); (b) with respect to each Additional
Leased  Property,  (i) three  percent (3%) with respect to the 2001 Fiscal Year;
(ii) four percent (4%) with respect to the 2002 Fiscal Year; and (c) thereafter,
five  percent  (5%);  and (c) with  respect  to each New Leased  Property,  five
percent (5%).

         1.10 "Award" shall mean all compensation,  sums or other value awarded,
paid or  received  by virtue of a total or  partial  Condemnation  of any of the
Leased  Property  (after  deduction  of all  reasonable  legal  fees  and  other
reasonable costs and expenses,  including,  without  limitation,  expert witness
fees, incurred by Landlord, in connection with obtaining any such award).

         1.11 "Base Total Hotel Sales" shall mean, with respect to any Property,
Total Hotel Sales at such Property for the Base Year; provided, however, that in
the event that,  with  respect to any Lease Year,  or portion  thereof,  for any
reason (including,  without limitation,  a casualty or Condemnation) there shall
be a reduction  of five percent (5%) or more in the number of rooms at any Hotel
or  a  change  in  the  services  provided  at  any  Hotel  (including,  without
limitation, if applicable,  the closing of restaurants or the discontinuation of
food or beverage  services)  from the number of rooms or the  services  provided
during the Base Year,  in  determining  Additional  Rent payable with respect to
such Lease Year,  Base Total Hotel Sales with respect to the  affected  Property
shall  be  reduced  as  follows:  (a) in the  event of the  termination  of this
Agreement  with  respect to any  Property  pursuant to Article 10, 11 or 12, all
Total Hotel Sales  attributable  to such Property  during the Base Year shall be
subtracted  from Base Total Hotel Sales,  appropriately  prorated  based on time
elapsed  if such  termination  occurs on a date  other than the first day of any
Fiscal Year; (b) in the event of a complete  closing of a Hotel, all Total Hotel
Sales  attributable  to such Hotel during the Base Year shall be subtracted from
Base Total Hotel Sales  throughout the period of such closing;  (c) in

                                      -4-
<PAGE>

the event of a partial closing of a Hotel affecting five percent (5%) or more of
the guest rooms in such Hotel,  Total  Hotel  Sales  attributable  to guest room
occupancy  or guest room  services  at such Hotel  during the Base Year shall be
ratably allocated among all guest rooms in service at such Hotel during the Base
Year and all such Total Hotel Sales  attributable  to rooms no longer in service
shall be subtracted  from Base Total Hotel Sales  throughout  the period of such
closing;  (d) in the event of a closing of a  restaurant,  all Total Hotel Sales
attributable  to such  restaurant  during the Base Year shall be subtracted from
Base Total Hotel Sales  throughout  the period of such  closing;  and (e) in the
event of any other change in circumstances affecting any Hotel, Base Total Hotel
Sales shall be  equitably  adjusted in such manner as Landlord  and Tenant shall
reasonably agree.

         1.12 "Base Year" shall mean,  (a) with  respect to any  Property  other
than a New Leased Property,  the period  commencing on the first  anniversary of
the first full day of the first full calendar  month  following the Opening Date
of the Hotel  located at such  Property  and expiring on the day  preceding  the
second  anniversary  of such Opening Date and (b) with respect to any New Leased
Property, the 2002 Fiscal Year.

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

         1.14 "Candlewood" shall mean Candlewood Hotel Company, Inc., a Delaware
corporation, its successors and assigns.

         1.15  "Capital   Addition"  shall  mean  any   renovation,   repair  or
improvement  to the Leased  Property  (or  portion  thereof),  the cost of which
constitutes a Capital Expenditure.

         1.16  "Capital  Expenditure"  shall  mean any  expenditure  treated  as
capital in nature in accordance with GAAP.

         1.17  "Change in  Control"  shall  mean:  (a) except for changes in the
ownership of Candlewood that do not constitute a Change in Control under clauses
(b) through (f) of this  definition,  the direct or  indirect  acquisition  by a
Person or group of Persons  acting in concert (a "Group") of any  beneficial  or
voting  ownership  of any class of equity of  Tenant,  including  any  ownership
rights to acquire  beneficial or voting interests

                                      -5-
<PAGE>

whether  expressed  as rights,  options,  warrants,  convertible  securities  or
otherwise;  (b) the direct or indirect acquisition by a Person or Group of stock
representing a majority of voting interests of Candlewood,  including any rights
to acquire any voting interests whether expressed as rights, options,  warrants,
convertible  securities  or  otherwise,  provided  that the  direct or  indirect
acquisition of Candlewood equity by a Person who currently owns preferred shares
of Candlewood  pursuant to the terms of the  Certificate of Designation for such
preferred  shares  filed  with the  Delaware  Secretary  of State (a  "Preferred
Certificate of  Designation")  shall not be considered a Change in Control;  (c)
the  acquisition  by contract or  otherwise by a Person or Group of the power to
direct the management  and policies of Tenant or  Candlewood,  provided that the
continuation of the Voting Agreement and the exercise of rights thereunder shall
not be  considered a Change in Control;  (d) the merger of Tenant or  Candlewood
with another  Person,  provided that a merger of  Candlewood  which results in a
continuing  Entity  which  is  majority  owned  by a  majority  of  all  of  the
shareholders of Candlewood immediately before the merger shall not be considered
a Change in  Control  (unless  the same  would  constitute  a Change in  Control
pursuant to the preceding clause (b) of this  definition),  and provided further
that a merger of  Tenant or  Candlewood  with an Entity  which is wholly  owned,
directly  or  indirectly,  by  Candlewood  shall not be  considered  a Change in
Control;  (e) any sale, series of sales or similar  conveyances of a majority of
the assets of Tenant or of Candlewood;  and (f) any amendment,  modification  or
change to the terms of the Preferred  Certificates  of Designation or the Voting
Agreement which is not approved by Landlord in its discretion.

         1.18 "Claim" shall have the meaning given such term in Article 8.

         1.19 "Code"  shall mean the  Internal  Revenue Code of 1986 and, to the
extent applicable, the Treasury Regulations promulgated thereunder, each as from
time to time amended.

         1.20  "Commencement  Date" shall mean (a) with respect to each Original
Leased  Property,  the date on which the terms of its Original Lease  commenced,
(b) with respect to each Additional  Leased  Property,  August 10, 2001, and (c)
with respect to each New Leased Property, the date of this Agreement.

         1.21 "Condemnation"  shall mean, with respect to any Property,  (a) the
exercise of any  governmental  power with

                                      -6-
<PAGE>

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

         1.22 "Condemnor" shall mean any public or quasi-public  Person,  having
the power of Condemnation.

         1.23 "Consolidated Financials" shall mean, for any Fiscal Year or other
accounting  period  of  Candlewood,   annual  audited  and  quarterly  unaudited
financial  statements of Candlewood prepared on a consolidated basis,  including
Candlewood's consolidated balance sheet and the related statements of income and
cash flows, all in reasonable  detail, and setting forth in comparative form the
corresponding figures for the corresponding period in the preceding Fiscal Year,
and prepared in accordance with GAAP throughout the periods reflected.

         1.24 "Date of Taking"  shall mean,  with respect to any  Property,  the
date the Condemnor has the right to possession of such Property,  or any portion
thereof, in connection with a Condemnation.

         1.25 "Default"  shall mean any event or condition which with the giving
of notice and/or lapse of time would ripen into an Event of Default.

         1.26  "Designated  Areas One" shall have the meaning given such term in
Section 22.11.

         1.27  "Designated  Areas Two" shall have the meaning given such term in
Section 22.11.

         1.28 "Disbursement  Rate" shall mean an annual rate of interest,  as of
the date of  determination,  equal to the greater of (i) the  Interest  Rate and
(ii) the per annum  rate for  fifteen  (15) year U.S.  Treasury  Obligations  as
published  in The Wall  Street  Journal  plus three  hundred  fifty  (350) basis
points.

                                      -7-
<PAGE>

         1.29  "Distribution"  shall mean (a) any  declaration or payment of any
dividend (except  dividends  payable in common stock of Tenant) on or in respect
of any  shares  of any  class of  capital  stock of  Tenant,  (b) any  purchase,
redemption,  retirement  or other  acquisition  of any  shares  of any  class of
capital stock of a corporation,  (c) any other  distribution on or in respect of
any shares of any class of capital stock of a  corporation  or (d) any return of
capital to shareholders.

         1.30  "Easement  Agreement"  shall mean any  conditions,  covenants and
restrictions,  easements, declarations,  licenses and other agreements which are
Permitted Encumbrances and such other agreements as may be granted in accordance
with Section 19.1.

         1.31  "Encumbrance"  shall have the meaning  given such term in Section
20.1.

         1.32  "Entity"   shall  mean  any   corporation,   general  or  limited
partnership,   limited  liability  company  or  partnership,  stock  company  or
association,  joint venture,  association,  company, trust, bank, trust company,
land trust, business trust, cooperative,  any government or agency, authority or
political subdivision thereof or any other entity.

         1.33  "Environment"  shall mean soil,  surface  waters,  ground waters,
land, stream, sediments, surface or subsurface strata and ambient air.

         1.34 "Environmental  Obligation" shall have the meaning given such term
in Section 4.3.1.

         1.35  "Environmental  Notice" shall have the meaning given such term in
Section 4.3.1.

         1.36  "Event of  Default"  shall  have the  meaning  given such term in
Section 12.1.

         1.37  "Excess  Total  Hotel  Sales"  shall  mean,  with  respect to any
Property,  with  respect to any Lease Year,  or portion  thereof,  the amount of
Total Hotel Sales for such Property for such Lease Year, or portion thereof,  in
excess of Base Total Hotel Sales for such  Property  for the  equivalent  period
during the Base Year.

                                      -8-
<PAGE>

         1.38 "Extended Terms" shall have the meaning given such term in Section
2.4.

         1.39 "FF&E  Estimate" shall have the meaning given such term in Section
5.1.2(c).

         1.40  "FF&E  Pledge"  shall  mean  the  Second   Amended  and  Restated
Assignment and Security  Agreement,  dated as of the date hereof, made by Tenant
for the benefit of Landlord.

         1.41 "FF&E  Reserve"  shall have the meaning given such term in Section
5.1.2(a).

         1.42 "Financial Officer's  Certificate" shall mean, as to any Person, a
certificate of the chief executive  officer,  chief  financial  officer or chief
accounting officer (or such officers'  authorized designee) of such Person, duly
authorized,  accompanying the financial  statements  required to be delivered by
such Person  pursuant to Section  17.2,  in which such officer shall certify (a)
that such statements have been properly prepared in accordance with GAAP and are
true,  correct and  complete in all  material  respects  and fairly  present the
consolidated  financial  condition of such Person at and as of the dates thereof
and the results of its and their operations for the periods covered thereby, and
(b),  in the event  that the  certifying  party is an  officer of Tenant and the
certificate  is being given in such  capacity,  certify that no Event of Default
has occurred and is continuing hereunder.

         1.43  "First  Lease"  shall  have the  meaning  given  such term in the
preambles to this Agreement.

         1.44 "Fiscal Year" shall mean the calendar year.

         1.45 "Fixed  Term"  shall have the  meaning  given such term in Section
2.3.

         1.46  "Fixtures"  shall  have the  meaning  given  such term in Section
2.1(d).

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

         1.48  "Government  Agencies" shall mean any court,  agency,  authority,
board (including,  without limitation,  environmental  protection,  planning and
zoning), bureau, commission,

                                      -9-
<PAGE>

department,   office  or   instrumentality  of  any  nature  whatsoever  of  any
governmental or quasi-governmental unit of the United States or any State or any
county or any  political  subdivision  of any of the  foregoing,  whether now or
hereafter in existence,  having  jurisdiction over Tenant or the Leased Property
or any portion thereof or any Hotel operated thereon.

         1.49 "Group" shall have the meaning given such term in Section 1.17.

         1.50  "Guaranty"  shall mean the Second  Amended and Restated  Guaranty
Agreement, dated the date hereof, made by Candlewood for the benefit of Landlord
and Hospitality Properties Trust.

         1.51 "Hazardous Substances" shall mean any substance:

                  (a) the presence of which  requires or may  hereafter  require
         notification,  investigation or remediation  under any Applicable Laws;
         or

                  (b)  which  is or  becomes  defined  as a  "hazardous  waste",
         "hazardous  material"  or  "hazardous   substance"  or  "pollutant"  or
         "contaminant" under any Applicable Laws, including, without limitation,
         the Comprehensive  Environmental  Response,  Compensation and Liability
         Act (42 U.S.C. et seq.) and the Resource  Conservation and Recovery Act
         (42  U.S.C.  section  6901 et  seq.)  and the  regulations  promulgated
         thereunder; or

                  (c)  which  is   toxic,   explosive,   corrosive,   flammable,
         infectious, radioactive, carcinogenic, mutagenic or otherwise hazardous
         and is or becomes regulated under any Applicable Laws; or

                  (d) the  presence  of which  on the  Leased  Property,  or any
         portion  thereof,  causes or materially  threatens to cause an unlawful
         nuisance  upon the  Leased  Property,  or any  portion  thereof,  or to
         adjacent  properties or poses or materially  threatens to pose a hazard
         to the Leased  Property,  or any portion  thereof,  or to the health or
         safety of  persons  on or about the  Leased  Property,  or any  portion
         thereof; or

                                      -10-
<PAGE>

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

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

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

                  (h) without limitation, constitutes materials which are now or
         may hereafter be subject to regulation  pursuant to the Material  Waste
         Tracking Act of 1988.

         1.52 "Hotel" shall mean, with respect to any Property,  the hotel being
operated on such Property.

         1.53 "Hotel Mortgage" shall mean any Encumbrance placed upon the Leased
Property in accordance with Article 20.

         1.54 "Hotel Mortgagee" shall mean the holder of any Hotel Mortgage.

         1.55 "HPT CW I Leased  Property" shall have the meaning given such term
in the preambles to this Agreement.

         1.56 "HPT CW II Leased Property" shall have the meaning given such term
in the preambles to this Agreement.

         1.57  "Immediate  Family" shall mean,  with respect to any  individual,
such  individual's  spouse,  parents,  brothers,  sisters,  children (natural or
adopted),    stepchildren,    grandchildren,    grandparents,    parents-in-law,
brothers-in-law, sisters-in-law, nephews and nieces.

         1.58  "Impositions"  shall  mean  collectively,  all taxes  (including,
without limitation,  all taxes imposed under the laws of any State, as such laws
may be amended from time to time, and all ad valorem,  sales and use, or similar
taxes as the same relate to or are imposed upon Landlord, Tenant or the business
conducted upon the Leased Property), assessments (including, without limitation,
all assessments for public improvements or benefit,  whether or not commenced or
completed  prior to the date hereof),  water,  sewer or other rents and charges,
excises,  tax levies,  fees (including,  without  limitation,  license,  permit,

                                      -11-
<PAGE>

inspection, authorization and similar fees), and all other governmental charges,
in each case whether general or special, ordinary or extraordinary,  or foreseen
or  unforeseen,  of every  character  in respect of the Leased  Property  or the
business  conducted  thereon by Tenant  (including  all interest  and  penalties
thereon due to any  failure in payment by  Tenant),  which at any time prior to,
during or in respect  of the Term  hereof  may be  assessed  or imposed on or in
respect of or be a lien upon (a) Landlord's interest in the Leased Property, (b)
the Leased  Property or any part  thereof or any rent  therefrom  or any estate,
right,  title or  interest  therein,  or (c) any  occupancy,  operation,  use or
possession  of, or sales from, or activity  conducted on, or in connection  with
the Leased  Property  or the  leasing or use of the Leased  Property or any part
thereof by Tenant;  provided,  however,  that nothing  contained herein shall be
construed to require Tenant to pay and the term "Impositions"  shall not include
(i) any tax based on net income imposed on Landlord, (ii) any net revenue tax of
Landlord,  (iii) any  transfer  fee (but  excluding  any mortgage or similar tax
payable in connection  with a Hotel  Mortgage) or other tax imposed with respect
to the sale, exchange or other disposition by Landlord of the Leased Property or
the proceeds thereof, (iv) any single business,  gross receipts tax, transaction
privilege,  rent or  similar  taxes as the same  relate to or are  imposed  upon
Landlord,  (v) any interest or penalties  imposed on Landlord as a result of the
failure  of  Landlord  to file  any  return  or  report  timely  and in the form
prescribed  by law or to pay any tax or  imposition,  except to the extent  such
failure is a result of a breach by Tenant of its obligations pursuant to Section
3.1.3,  (vi) any  impositions  imposed on Landlord that are a result of Landlord
not being considered a "United States person" as defined in Section  7701(a)(30)
of the Code,  (vii) any impositions that are enacted or adopted by their express
terms as a  substitute  for any tax that  would not have been  payable by Tenant
pursuant to the terms of this Agreement or (viii) any  impositions  imposed as a
result of a breach of covenant or  representation  by Landlord in any  agreement
governing  Landlord's  conduct or operation or as a result of the  negligence or
willful misconduct of Landlord.

         1.59  "Incidental  Documents"  shall mean the  Guaranty,  the  Security
Agreement, the Stock Pledge Agreement and the FF&E Pledge.

                                      -12-
<PAGE>

         1.60   "Indebtedness"   shall  mean  all  obligations,   contingent  or
otherwise,  which in  accordance  with GAAP should be reflected on the obligor's
balance sheet as liabilities.

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

         1.62 "Interest Rate" shall mean ten percent (10%) per annum.

         1.63 "Land" shall have the meaning given such term in Section 2.1(a).

         1.64 "Landlord" shall have the meaning given such term in the preambles
to this Agreement and shall also include its permitted successors and assigns.

         1.65  "Landlord  Default"  shall  have the  meaning  given such term in
Section 14.2.

         1.66  "Landlord  Liens"  shall  mean  liens on or  against  the  Leased
Property or any  payment of Rent (a) which  result from any act of, or any claim
against,  Landlord or any owner of a direct or  indirect  interest in the Leased
Property,  or which  result from any  violation by Landlord of any terms of this
Agreement or the Purchase Documents,  or (b) which result from liens in favor of
any taxing authority by reason of any tax owed by Landlord or any fee owner of a
direct or indirect  interest in the Leased  Property;  provided,  however,  that
"Landlord  Lien"  shall not include  any lien  resulting  from any tax for which
Tenant is  obligated  to pay or indemnify  Landlord  against  until such time as
Tenant  shall  have  already  paid to or on  behalf of  Landlord  the tax or the
required indemnity with respect to the same.

         1.67 "Lease Year" shall mean any Fiscal Year or portion  thereof during
the Term.

         1.68 "Leased  Improvements"  shall have the meaning  given such term in
Section 2.1(b).

         1.69  "Leased  Intangible  Property"  shall  mean all  hotel  licensing
agreements and other service contracts, equipment

                                      -13-
<PAGE>

leases,  booking agreements and other  arrangements or agreements  affecting the
ownership, repair, maintenance,  management,  leasing or operation of the Leased
Property to which Landlord is a party; all books,  records and files relating to
the  leasing,  maintenance,  management  or  operation  of the  Leased  Property
belonging to Landlord;  all transferable or assignable permits,  certificates of
occupancy,  operating permits,  sign permits,  development rights and approvals,
certificates,  licenses,  warranties and guarantees,  rights to deposits,  trade
names,  service marks,  telephone  exchange  numbers  identified with the Leased
Property, and all other transferable intangible property,  miscellaneous rights,
benefits  and  privileges  of any kind or character  belonging to Landlord  with
respect to the Leased Property other than liquor licenses.

         1.70 "Leased Personal  Property" shall have the meaning given such term
in Section 2.1(e).

         1.71  "Leased  Property"  shall  have the  meaning  given  such term in
Section 2.1.

         1.72  "Legal  Requirements"  shall  mean all  federal,  state,  county,
municipal and other governmental  statutes,  laws, rules,  orders,  regulations,
ordinances,  judgments, decrees and injunctions affecting the Leased Property or
the maintenance,  construction,  alteration or operation thereof, whether now or
hereafter  enacted  or in  existence,  including,  without  limitation,  (a) all
permits,  licenses,  authorizations,  certificates and regulations  necessary to
operate any Property for its Permitted Use, and (b) all  covenants,  agreements,
restrictions and encumbrances  contained in any instruments at any time in force
affecting any Property,  including those which may (i) require material repairs,
modifications or alterations in or to any Property or (ii) in any way materially
and  adversely  affect  the  use  and  enjoyment  thereof,   but  excluding  any
requirements  arising  as  a  result  of  Landlord's  status  as a  real  estate
investment trust.

         1.73  "Lien"  shall  mean  any  mortgage,  security  interest,  pledge,
collateral assignment, or other encumbrance,  lien or charge of any kind, or any
transfer of property  or assets for the  purpose of  subjecting  the same to the
payment of  Indebtedness  or performance of any other  obligation in priority to
payment of its general creditors.

                                      -14-
<PAGE>

         1.74  "Management  Agreement"  shall  mean any  management,  franchise,
operating, branding or flagging agreement entered into by Tenant with respect to
all or any  portion  of the  Leased  Property,  together  with  all  amendments,
modifications and supplements thereto.

         1.75 "Manager" shall mean any manager under a Management Agreement.

         1.76 "Minimum  Rent" shall mean Three Million Seven Hundred  Ninety-Two
Thousand Two Hundred Seventy-Three Dollars ($3,792,273) per Accounting Period.

         1.77 "Net  Worth"  shall  mean the  excess of total  assets  over total
liabilities,  total  assets  and  total  liabilities  each to be  determined  in
accordance with GAAP; provided,  however,  that for purposes of this definition,
the  shares of Series A  Cumulative  Preferred  Stock  and  Series B  Cumulative
Convertible Preferred Stock of Candlewood which are issued and outstanding as of
the date hereof shall not constitute liabilities.

         1.78 "New Leased  Property"  shall have the meaning  given such term in
the preambles to this Agreement.

         1.79  "Notice"  shall mean a notice  given in  accordance  with Section
22.10.

         1.80  "Officer's  Certificate"  shall mean a  certificate  signed by an
officer  or other duly  authorized  individual  of the  certifying  Entity  duly
authorized by the board of directors or other  governing  body of the certifying
Entity.

         1.81  "Opening  Date"  shall,  with respect to any  Property,  have the
meaning given such term in the Purchase Documents with respect to such Property.

         1.82  "Original  Leases"  shall have the meaning given such term in the
preambles to this Agreement.

         1.83 "Original  Leased Property" shall have the meaning given such term
in the preambles to this Agreement.

         1.84  "Overdue  Rate"  shall  mean,  on any date,  a per annum  rate of
interest equal to the lesser of fifteen  percent (15%) and the maximum rate then
permitted under applicable law.

                                      -15-
<PAGE>

         1.85 "Parent" shall mean, with respect to any Person,  any Person which
owns  directly,  or indirectly  through one or more  Subsidiaries  or Affiliated
Persons, fifty percent (50%) or more of the voting or beneficial interest in, or
otherwise  has the right or power  (whether by  contract,  through  ownership of
securities or otherwise) to control, such Person.

         1.86 "Permitted Encumbrances" shall mean, with respect to any Property,
all rights, restrictions, and easements of record set forth on Schedule B to the
applicable  owner's or leasehold  title  insurance  policy issued to Landlord in
connection with the  transactions  contemplated  by the Purchase  Documents with
respect  to such  Property,  plus any other  encumbrances  as may be  "Permitted
Encumbrances"  under the Purchase  Documents or as may have been consented to in
writing by Landlord and Tenant from time to time.

         1.87 "Permitted  Liens" shall mean any Liens granted in accordance with
Section 21.10(a).

         1.88 "Permitted Use" shall mean, with respect to any Property,  any use
of such Property permitted pursuant to Section 4.1.1.

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

         1.90 "Property" shall have the meaning given such term in Section 2.1.

         1.91 "Purchase  Documents" shall mean,  collectively,  (a) the Purchase
and Sale  Agreement,  dated as of November  19, 1997,  by and among  Hospitality
Properties  Trust,  Candlewood and certain of Candlewood's  Subsidiaries and the
Agreement  to Lease,  dated as of November 19,  1997,  by and among  Hospitality
Properties Trust and Candlewood,  as they may have been or hereafter be amended,
restated, supplemented or otherwise modified from time to time, (b) the Purchase
and  Sale  Agreement,  dated  as of  May  14,  1998,  by and  among  Hospitality
Properties  Trust,  Candlewood and certain of Candlewood's  Subsidiaries and the
Agreement  to  Lease,  dated  as of  May  14,  1998,  by and  among  Hospitality
Properties Trust and Candlewood,  as they may have been or hereafter be amended,
restated, supplemented or otherwise modified from time to time, (c) the Purchase
and Sale

                                      -16-
<PAGE>

Agreement,  dated as of August 10,  2001,  by and among  Hospitality  Properties
Trust, Candlewood and certain of Candlewood's Subsidiaries,  as it may have been
or hereafter be amended, restated,  supplemented or otherwise modified from time
to time, and (d) the Purchase and Sale  Agreement,  dated as of the date hereof,
by  and  among  Hospitality   Properties   Trust,   Candlewood  and  certain  of
Candlewood's  Subsidiaries,  as it  may  have  been  or  hereafter  be  amended,
restated, supplemented or otherwise modified from time to time.

         1.92 "Records" shall have the meaning given such term in Section 7.2.

         1.93 "Rent" shall mean, collectively, the Minimum Rent, Additional Rent
and Additional Charges.

         1.94  "Retained  Funds"  shall mean a cash  amount  equal to  Forty-Six
Million Eighty-Five Thousand Seven Hundred Fifty Dollars ($46,085,750).

         1.95 "SEC" shall mean the Securities and Exchange Commission.

         1.96  "Second  Lease"  shall  have the  meaning  given such term in the
preambles to this Agreement.

         1.97  "Security  Agreement"  shall mean the Second Amended and Restated
Security Agreement,  dated as of the date hereof, made by Tenant for the benefit
of Landlord, as it may be amended, restated,  supplemented or otherwise modified
from time to time.

         1.98  "State"  shall mean,  with  respect to any  Property,  the state,
commonwealth or district in which the such Property is located.

         1.99  "Stock  Pledge  Agreement"  shall  mean the  Second  Amended  and
Restated Stock Pledge Agreement, dated as of the date hereof, made by Candlewood
to Landlord with respect to the stock of Tenant, as it may be amended, restated,
supplemented or otherwise modified from time to time.

         1.100  "Subordinated  Creditor" shall mean any creditor of Tenant which
is a party to a Subordination Agreement in favor of Landlord.

                                      -17-
<PAGE>

         1.101  "Subordination  Agreement"  shall  mean any  agreement  (and any
amendments  thereto)  executed by a Subordinated  Creditor pursuant to which the
payment and performance of Tenant's  obligations to such  Subordinated  Creditor
are  subordinated  to the payment and  performance  of Tenant's  obligations  to
Landlord under this Agreement.

         1.102  "Subsidiary"  shall mean, with respect to any Person, any Entity
(a) in which such  Person  owns  directly,  or  indirectly  through  one or more
Subsidiaries,  twenty percent (20%) or more of the voting or beneficial interest
or (b) which such Person otherwise has the right or power to control (whether by
contract, through ownership of securities or otherwise).

         1.103  "Successor  Landlord"  shall have the meaning given such term in
Section 20.2.

         1.104  "Tenant" shall have the meaning given such term in the preambles
to this Agreement and shall also include its permitted successors and assigns.

         1.105  "Tenant's  Personal  Property" shall mean all motor vehicles and
consumable  inventory and supplies,  furniture,  furnishings,  movable walls and
partitions,  equipment and machinery and all other tangible personal property of
Tenant,  if any,  acquired by Tenant on and after the date hereof and located at
the Leased Property or used in Tenant's  business at the Leased Property and all
modifications, replacements, alterations and additions to such personal property
installed  at the expense of Tenant,  other than any items  included  within the
definition of Fixtures or Leased Personal Property.

         1.106 "Term" shall mean, collectively,  the Fixed Term and the Extended
Terms,  to the extent properly  exercised  pursuant to the provisions of Section
2.4, unless sooner terminated pursuant to the provisions of this Agreement.

         1.107 "Total Hotel Sales" shall mean, with respect to any Property, for
each  Fiscal  Year  during the Term,  all  revenues  and  receipts of every kind
derived by Tenant from operating such Property and parts thereof, including, but
not  limited  to:  income  (from  both  cash  and  credit  transactions),  after
deductions for bad debts, and discounts for prompt or cash payments and refunds,
from rental of rooms, stores, offices,  meeting, exhibit or sales space of every
kind;  license,  lease and  concession  fees and rentals  (not  including  gross
receipts  of

                                      -18-
<PAGE>

licensees,  lessees and concessionaires);  income from vending machines;  health
club membership  fees;  food and beverage  sales;  wholesale and retail sales of
merchandise  (other  than  proceeds  from the sale of  furnishings,  fixture and
equipment no longer  necessary to the  operation of the Hotel  located  thereon,
which shall be deposited in the FF&E Reserve);  service  charges,  to the extent
not distributed to the employees at the Hotel located thereon as gratuities; and
proceeds,  if any, from business interruption or other loss of income insurance;
provided,  however,  that Total Hotel  Sales  shall not  include the  following:
gratuities  to or  collected  on behalf of Hotel  employees;  federal,  state or
municipal excise, sales, use, occupancy or similar taxes collected directly from
patrons  or  guests  or  included  as part of the  sales  price of any  goods or
services;  insurance proceeds (other than proceeds from business interruption or
other loss of income  insurance);  Award  proceeds  (other  than for a temporary
Condemnation);  any  proceeds  from  any  sale of  such  Property  or  from  the
refinancing of any debt encumbering such Property; proceeds from the disposition
of furnishings,  fixture and equipment no longer  necessary for the operation of
the Hotel located  thereon;  interest which accrues on amounts  deposited in the
FF&E Reserve;  and any security deposits and other advance  deposits,  until and
unless the same are  forfeited  to Tenant or applied  for the  purpose for which
they were collected;  and interest income from any bank account or investment of
Tenant.

         1.108  "Uniform  System of  Accounts"  shall  mean A Uniform  System of
Accounts for Hotels,  Eighth  Revised  Edition,  1986, as published by the Hotel
Association  of New York City,  as the same may be further  revised from time to
time.

         1.109  "Unsuitable  for Its Permitted Use" shall mean,  with respect to
such  Hotel,  a state or  condition  of such Hotel such that (a)  following  any
damage or  destruction  involving a Hotel,  such Hotel cannot be operated in the
good  faith  judgment  of Tenant  on a  commercially  practicable  basis for its
Permitted  Use  and  it  cannot   reasonably  be  expected  to  be  restored  to
substantially  the same condition as existed  immediately  before such damage or
destruction,  and as otherwise  required by Section  10.2.4,  within twelve (12)
months following such damage or destruction or such shorter period of time as to
which business interruption insurance is available to cover Rent and other costs
related to the applicable Property following such damage or destruction,  or (b)
as the  result  of a  partial  taking  by

                                      -19-
<PAGE>

Condemnation,  such Hotel  cannot be  operated,  in the good faith  judgment  of
Tenant, on a commercially practicable basis for its Permitted Use.

         1.110 "Voting  Agreement"  shall mean that certain Amended and Restated
Stockholders  Agreement,  dated as of July 10,  1998,  by and among  Candlewood,
Doubletree  Corporation,  the Warren D. Fix Family  Partnership,  L.P., and Jack
DeBoer,  on behalf of himself and certain family  trusts,  and the purchasers of
the Series A and Series B Preferred  Shares as the same may be amended from time
to time (but only with the approval of Landlord as provided herein).

         1.111 "Work" shall have the meaning given such term in Section 10.2.4.

                                   ARTICLE 2

                            LEASED PROPERTY AND TERM

         2.1  Leased  Property.  Upon and  subject  to the terms and  conditions
hereinafter set forth, Landlord leases to Tenant and Tenant leases from Landlord
all of Landlord's right, title and interest in and to all of the following (each
of items (a) through (g) below which, as of the  Commencement  Date,  relates to
any single Hotel, a "Property" and, collectively, the "Leased Property"):

                  (a) those certain tracts,  pieces and parcels of land, as more
         particularly described in Exhibit A-1 through A-57, attached hereto and
         made a part hereof (the "Land");

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

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

                  (d) all  equipment,  machinery,  fixtures,  and other items of
         property,  now or hereafter permanently affixed to or incorporated into
         the Leased Improvements,  including,

                                      -20-
<PAGE>

         without  limitation,   all  furnaces,   boilers,  heaters,   electrical
         equipment,  heating, plumbing,  lighting,  ventilating,  refrigerating,
         incineration,   air  and  water  pollution  control,   waste  disposal,
         air-cooling  and  air-conditioning  systems  and  apparatus,  sprinkler
         systems and fire and theft protection  equipment,  all of which, to the
         maximum  extent  permitted  by law,  are hereby  deemed by the  parties
         hereto to  constitute  real  estate,  together  with all  replacements,
         modifications,  alterations  and additions  thereto,  but  specifically
         excluding all items included  within the category of Tenant's  Personal
         Property (collectively, the "Fixtures");

                  (e) all machinery, equipment, furniture, furnishings, moveable
         walls or  partitions,  computers  or trade  fixtures or other  personal
         property of any kind or description used or useful in Tenant's business
         on or in the  Leased  Improvements,  and  located  on or in the  Leased
         Improvements,  and all  modifications,  replacements,  alterations  and
         additions to such personal  property,  except items,  if any,  included
         within the category of Fixtures,  but specifically  excluding all items
         included   within  the   category   of   Tenant's   Personal   Property
         (collectively, the "Leased Personal Property");

                  (f) all of the Leased Intangible Property; and

                  (g) any and all leases of space in the Leased Improvements.

         2.2  Condition  of Leased  Property.  Tenant  acknowledges  receipt and
delivery of  possession  of the Leased  Property  and Tenant  accepts the Leased
Property  in its  "as  is"  condition,  subject  to the  rights  of  parties  in
possession,  the existing state of title,  including all covenants,  conditions,
restrictions,  reservations,  mineral  leases,  easements  and other  matters of
record or that are visible or apparent on the Leased  Property,  all  applicable
Legal Requirements,  the lien of any financing instruments,  mortgages and deeds
of trust  existing prior to the  Commencement  Date or permitted by the terms of
this Agreement, and such other matters which would be disclosed by an inspection
of the Leased  Property  and the record title  thereto or by an accurate  survey
thereof.  TENANT REPRESENTS THAT IT HAS INSPECTED THE LEASED PROPERTY AND ALL OF
THE  FOREGOING  AND HAS  FOUND THE  CONDITION  THEREOF  SATISFACTORY  AND IS NOT
RELYING ON ANY  REPRESENTATION  OR WARRANTY OF LANDLORD OR LANDLORD'S  AGENTS

                                      -21-
<PAGE>

OR EMPLOYEES WITH RESPECT  THERETO AND TENANT WAIVES ANY CLAIM OR ACTION AGAINST
LANDLORD IN RESPECT OF THE CONDITION OF THE LEASED  PROPERTY.  LANDLORD MAKES NO
WARRANTY  OR  REPRESENTATION,  EXPRESS  OR  IMPLIED,  IN  RESPECT  OF THE LEASED
PROPERTY  OR ANY PART  THEREOF,  EITHER  AS TO ITS  FITNESS  FOR USE,  DESIGN OR
CONDITION FOR ANY PARTICULAR  USE OR PURPOSE OR OTHERWISE,  AS TO THE QUALITY OF
THE MATERIAL OR WORKMANSHIP THEREIN,  LATENT OR PATENT, IT BEING AGREED THAT ALL
SUCH RISKS ARE TO BE BORNE BY TENANT.  To the maximum  extent  permitted by law,
however,  Landlord hereby assigns to Tenant all of Landlord's  rights to proceed
against any  predecessor in title for breaches of warranties or  representations
or for latent defects in the Leased  Property.  Landlord  shall fully  cooperate
with Tenant in the  prosecution  of any such claims,  in  Landlord's or Tenant's
name, all at Tenant's sole cost and expense. Tenant shall indemnify, defend, and
hold  harmless  Landlord  from and against any loss,  cost,  damage or liability
(including  reasonable  attorneys' fees) incurred by Landlord in connection with
such cooperation.

         2.3 Fixed Term.  The initial term of this  Agreement (the "Fixed Term")
shall commence on the Commencement Date and shall expire December 31, 2018.

         2.4  Extended  Term.  Provided  that no Event  of  Default  shall  have
occurred and be continuing,  the Term shall be automatically  extended for three
(3)  consecutive  renewal  terms of fifteen (15) years each  (collectively,  the
"Extended  Terms"),  unless  Tenant shall give Landlord  Notice,  not later than
eighteen (18) months prior to the scheduled  expiration of the then current Term
of this  Agreement  (Fixed or Extended,  as the case may be), that Tenant elects
not so to extend the term of this Agreement.

         Each Extended Term shall  commence on the day succeeding the expiration
of the Fixed Term or the preceding Extended Term, as the case may be. All of the
terms,  covenants  and  provisions  of this  Agreement  shall apply to each such
Extended Term,  except that Tenant shall have no right to extend the Term beyond
the expiration of the Extended Terms. If Tenant shall give Notice that it elects
not to  extend  the Term in  accordance  with this  Section  2.4,  Landlord  may
terminate  this  Agreement at any time during the  remainder of the then current
Term of this Agreement (Fixed or Extended, as the case may be), by giving Tenant
thirty (30) days Notice of Landlord's election to so terminate. If Landlord does
not so  terminate  and Tenant has given  Notice that

                                      -22-
<PAGE>

it elects not to extend the Term in accordance  with this Section 2.4, then this
Agreement  shall  automatically  terminate at the end of the Term then in effect
and Tenant  shall have no further  option to extend the Term of this  Agreement.
Otherwise,  the  extension of this  Agreement  shall be  automatically  effected
without the  execution of any  additional  documents;  it being  understood  and
agreed,  however,  that Tenant and Landlord  shall  execute such  documents  and
agreements as either party shall reasonably require to evidence the same.

                                   ARTICLE 3

                                      RENT

         3.1 Rent.  Tenant  shall pay, in lawful  money of the United  States of
America which shall be legal tender for the payment of public and private debts,
without  offset,  abatement,  demand or deduction  (unless  otherwise  expressly
provided in this  Agreement),  Minimum Rent and Additional  Rent to Landlord and
Additional  Charges to the party to whom such  Additional  Charges are  payable,
during the Term.  All  payments  to Landlord  shall be made by wire  transfer of
immediately  available federal funds or by other means acceptable to Landlord in
its sole discretion. Rent for any partial Accounting Period shall be prorated on
a per diem basis.

         3.1.1 Minimum Rent.

                  (a)  Payments.  Minimum  Rent  shall be paid in advance on the
         first Business Day of each Accounting Period;  provided,  however, that
         the first payment of Minimum Rent shall be payable on the  Commencement
         Date (and, if applicable, such payment shall be prorated as provided in
         the last sentence of the first paragraph of Section 3.1).

                  (b) Adjustments of Minimum Rent Following  Disbursements Under
         Sections  5.1.3(b),  10.2.3  and  11.2.  Effective  on the date of each
         disbursement  to  pay  for  the  cost  of  any  repairs,   maintenance,
         renovations or replacements  pursuant to Sections  5.1.3(b),  10.2.3 or
         11.2,  the annual Minimum Rent shall be increased by a per annum amount
         equal to the  Disbursement  Rate times the amount so disbursed.  If any
         such  disbursement  is made  during  any month on a day other  than the
         first  Business  Day  of an  Accounting  Period,  Tenant  shall  pay to
         Landlord  on  the  first  Business  Day of  the  immediately  following
         Accounting

                                      -23-
<PAGE>

         Period (in  addition to the amount of Minimum Rent payable with respect
         to such Accounting  Period, as adjusted pursuant to this paragraph (b))
         the amount by which Minimum Rent for the preceding  Accounting  Period,
         as adjusted  for such  disbursement  on a per diem basis,  exceeded the
         amount of  Minimum  Rent paid by Tenant for such  preceding  Accounting
         Period.

                  (c)  Adjustments  of  Minimum  Rent  Following  Partial  Lease
         Termination.  If this  Agreement  shall  terminate  with respect to any
         Property but less than all of the Leased  Property,  Minimum Rent shall
         be reduced by the affected  Property's  allocable share of Minimum Rent
         as set forth in Exhibit C.

             3.1.2 Additional Rent.

                  (a) Amount.  Tenant  shall pay  additional  rent  ("Additional
         Rent") with respect to each Lease Year  subsequent to the Base Year, in
         an amount,  not less than zero,  equal to ten  percent  (10%) of Excess
         Total Hotel Sales with respect to each Property.

                  (b) Accounting Period Installments. Installments of Additional
         Rent for each Lease Year or portion  thereof  shall be  calculated  and
         paid with  respect  to each  Accounting  Period in arrears on the first
         Business Day of each Accounting Period,  based on Total Hotel Sales for
         the  preceding  year,  together with an Officer's  Certificate  setting
         forth the  calculation  of  Additional  Rent due and  payable  for such
         Accounting Period.

                  (c)  Reconciliation  of Additional Rent. On or before April 30
         of the  calendar  year  immediately  following  the  Base  Year for any
         Property,  Tenant shall  deliver to Landlord an  Officer's  Certificate
         setting  forth Total Hotel Sales for such  Property  for the Base Year,
         together with an audit thereof by Ernst & Young, LLP or another firm of
         independent   certified  public  accountants  proposed  by  Tenant  and
         approved  by  Landlord   (which  approval  shall  not  be  unreasonably
         withheld, delayed or conditioned).  On or before April 30, of each year
         thereafter,  Tenant shall deliver to Landlord an Officer's  Certificate
         setting forth the Total Hotel Sales for such Property for the preceding
         Lease Year and the  Additional  Rent payable with respect to such Lease
         Year with respect to such Property,  together

                                      -24-
<PAGE>

         with an  audit  thereof,  by  Ernst &  Young,  LLP or  another  firm of
         independent   certified  public  accountants  proposed  by  Tenant  and
         approved  by  Landlord   (which  approval  shall  not  be  unreasonably
         withheld, delayed or conditioned).

                  If the annual Additional Rent for such preceding Lease Year as
         shown in the Officer's  Certificate  exceeds the amount previously paid
         with  respect  thereto  by  Tenant,  Tenant  shall  pay such  excess to
         Landlord  at  such  time as the  Officer's  Certificate  is  delivered,
         together  with  interest at the Interest  Rate,  which  interest  shall
         accrue from the close of such preceding  Lease Year until the date that
         such  certificate  is required to be delivered  and,  thereafter,  such
         interest  shall  accrue at the Overdue  Rate,  until the amount of such
         difference  shall  be  paid  or  otherwise  discharged.  If the  annual
         Additional Rent for such preceding Lease Year as shown in the Officer's
         Certificate  is less  than the  amount  previously  paid  with  respect
         thereto  by  Tenant,  provided  that no Event  of  Default  shall  have
         occurred  and be  continuing,  Landlord  shall  grant  Tenant  a credit
         against  the Rent next  coming  due in the  amount of such  difference,
         together  with  interest at the Interest  Rate,  which  interest  shall
         accrue from the date of payment by Tenant until the date such credit is
         applied  or paid,  as the case may be.  If such  credit  cannot be made
         because  the Term has expired  prior to  application  in full  thereof,
         provided no Event of Default has occurred and is  continuing,  Landlord
         shall pay the unapplied balance of such credit to Tenant, together with
         interest at the Interest  Rate,  which  interest  shall accrue from the
         date of payment by Tenant until the date of payment by Landlord.

                  (d) Confirmation of Additional Rent. Tenant shall utilize,  or
         cause to be utilized,  an accounting  system for the Leased Property in
         accordance  with its usual and  customary  practices  and in accordance
         with GAAP,  which will  accurately  record  all Total  Hotel  Sales and
         Tenant shall retain,  for at least three (3) years after the expiration
         of each Lease Year,  reasonably  adequate  records  conforming  to such
         accounting  system  showing  all Total Hotel Sales for such Lease Year.
         Landlord,  at its own expense,  except as provided  hereinbelow,  shall
         have the  right,  exercisable  by Notice to Tenant  within one (1) year
         after  receipt  of  the  applicable  Officer's   Certificate,   by  its
         accountants or

                                      -25-
<PAGE>

         representatives,  to audit the  information  set forth in the Officer's
         Certificate  referred to in  subparagraph  (c) above and, in connection
         with such audits,  to examine  Tenant's  books and records with respect
         thereto  (including  supporting data and sales and excise tax returns).
         If any such audit  discloses a deficiency  in the payment of Additional
         Rent and,  either  Tenant  agrees  with the result of such audit or the
         matter is otherwise  compromised with Landlord,  Tenant shall forthwith
         pay to  Landlord  the amount of the  deficiency,  as finally  agreed or
         determined,  together with interest at the Interest Rate, from the date
         such payment should have been made to the date of payment  thereof.  If
         such  deficiency,  as agreed upon or compromised as aforesaid,  is more
         than five percent (5%) of Additional Rent paid by Tenant for such Lease
         Year and, as a result,  Landlord  did not receive at least  ninety-five
         percent (95%) of the Additional Rent payable with respect to such Lease
         Year,   Tenant  shall  pay  the  reasonable  cost  of  such  audit  and
         examination.  If  any  such  audit  discloses  that  Tenant  paid  more
         Additional  Rent for any Lease Year than was due hereunder,  and either
         Landlord  agrees  with  the  result  of such  audit  or the  matter  is
         otherwise determined,  provided no Event of Default has occurred and is
         continuing, Landlord shall grant Tenant a credit equal to the amount of
         such overpayment against the Rent next coming due in the amount of such
         difference, as finally agreed or determined,  together with interest at
         the Interest Rate, which interest shall accrue from the time of payment
         by Tenant  until the date such  credit is applied or paid,  as the case
         may be. If such a credit  cannot be made  because  the Term has expired
         before the credit can be applied in full,  provided no Event of Default
         has  occurred  and is  continuing,  Landlord  shall  pay the  unapplied
         balance  of such  credit  to  Tenant,  together  with  interest  at the
         Interest Rate,  which interest shall accrue from the date of payment by
         Tenant until the date of payment from Landlord.

                  Any proprietary  information obtained by Landlord with respect
         to Tenant pursuant to the provisions of this Agreement shall be treated
         as confidential,  except that such information may be used,  subject to
         appropriate  confidentiality  safeguards, in any litigation between the
         parties and except further that Landlord may disclose such  information
         to its  prospective  lenders,  provided that Landlord  shall direct and
         obtain the  agreement of such

                                      -26-
<PAGE>

         lenders to maintain such information as  confidential.  The obligations
         of Tenant and Landlord  contained in this Section  3.1.2 shall  survive
         the expiration or earlier termination of this Agreement.

             3.1.3  Additional  Charges.  In addition  to the  Minimum  Rent and
Additional Rent payable hereunder,  Tenant shall pay to the appropriate  parties
and  discharge  as  and  when  due  and  payable  the  following  (collectively,
"Additional Charges"):

                  (a)  Impositions.  Subject to Article 8 relating to  permitted
         contests, Tenant shall pay, or cause to be paid, all Impositions before
         any fine, penalty, interest or cost (other than any opportunity cost as
         a result of a  failure  to take  advantage  of any  discount  for early
         payment)  may be  added  for  non-payment,  such  payments  to be  made
         directly to the taxing authorities where feasible,  and shall promptly,
         upon request,  furnish to Landlord copies of official receipts or other
         reasonably  satisfactory  proof  evidencing such payments.  If any such
         Imposition  may,  at the option of the  taxpayer,  lawfully  be paid in
         installments  (whether  or not  interest  shall  accrue  on the  unpaid
         balance of such Imposition),  Tenant may exercise the option to pay the
         same  (and  any  accrued   interest  on  the  unpaid  balance  of  such
         Imposition)  in  installments  and,  in  such  event,  shall  pay  such
         installments  during  the Term as the same  become  due and  before any
         fine, penalty,  premium, further interest or cost may be added thereto.
         Landlord, at its expense, shall, to the extent required or permitted by
         Applicable Law,  prepare and file all tax returns and pay all taxes due
         in respect of Landlord's  net income,  gross  receipts,  sales and use,
         single business,  transaction  privilege,  rent, ad valorem,  franchise
         taxes and taxes on its  capital  stock,  and  Tenant,  at its  expense,
         shall,  to the extent  required or  permitted  by  Applicable  Laws and
         regulations,  prepare  and file all other tax  returns  and  reports in
         respect of any  Imposition as may be required by  Government  Agencies.
         Provided no Event of Default shall have occurred and be continuing,  if
         any  refund  shall be due from any taxing  authority  in respect of any
         Imposition  paid by Tenant,  the same shall be paid over to or retained
         by  Tenant.  Landlord  and  Tenant  shall,  upon  request of the other,
         provide such data as is  maintained by the party to whom the request is
         made with respect to the Leased Property as may be necessary to prepare
         any required  returns and  reports.  In

                                      -27-
<PAGE>

         the event  Government  Agencies  classify any property  covered by this
         Agreement as personal property, Tenant shall file all personal property
         tax returns in such  jurisdictions  where it may legally so file.  Each
         party shall,  to the extent it possesses  the same,  provide the other,
         upon request,  with cost and depreciation  records necessary for filing
         returns for any  property so  classified  as personal  property.  Where
         Landlord is legally required to file personal  property tax returns for
         property covered by this Agreement,  Landlord shall provide Tenant with
         copies of assessment  notices in  sufficient  time for Tenant to file a
         protest.  All Impositions assessed against such personal property shall
         be  (irrespective of whether Landlord or Tenant shall file the relevant
         return)  paid by Tenant  not later than the last date on which the same
         may be made without  interest or penalty,  subject to the provisions of
         Article 8.

                  Landlord shall give prompt Notice to Tenant of all Impositions
         payable  by  Tenant  hereunder  of  which  Landlord  at  any  time  has
         knowledge;  provided, however, that Landlord's failure to give any such
         notice shall in no way diminish  Tenant's  obligation  hereunder to pay
         such  Impositions,  unless such failure  continues for more than ninety
         (90) days after the date Landlord learned of such Imposition.

                  (b) Utility Charges.  Tenant shall pay or cause to be paid all
         charges for  electricity,  power,  gas, oil, water and other  utilities
         used in connection with the Leased Property.

                  (c) Insurance  Premiums.  Tenant shall pay or cause to be paid
         all  premiums  for the  insurance  coverage  required to be  maintained
         pursuant to Article 9.

                  (d) Other  Charges.  Tenant  shall pay or cause to be paid all
         other  amounts,   liabilities  and  obligations,   including,   without
         limitation,  ground  rents,  if any, and all amounts  payable under any
         equipment  leases  and  all  agreements  to  indemnify  Landlord  under
         Sections 4.3.2 and 9.7.

                  (e)  Reimbursement for Additional  Charges.  If Tenant pays or
         causes to be paid property taxes or similar or other Additional Charges
         attributable  to  periods  after  the

                                      -28-
<PAGE>

         end of the Term,  whether upon expiration or sooner termination of this
         Agreement  (other than  termination  by reason of an Event of Default),
         Tenant may, within a reasonable time after the end of the Term, provide
         Notice to Landlord  of its  estimate of such  amounts.  Landlord  shall
         promptly  reimburse  Tenant  for all  payments  of such taxes and other
         similar  Additional  Charges that are  attributable to any period after
         the Term of this Agreement.

         3.2 Late  Payment of Rent,  Etc. If any  installment  of Minimum  Rent,
Additional Rent or Additional  Charges (but only as to those Additional  Charges
which are payable  directly to Landlord)  shall not be paid within ten (10) days
after its due date, Tenant shall pay Landlord, on demand, as Additional Charges,
a late charge (to the extent  permitted by law)  computed at the Overdue Rate on
the amount of such  installment,  from the due date of such  installment  to the
date of payment thereof.  To the extent that Tenant pays any Additional  Charges
directly to Landlord or any Hotel Mortgagee  pursuant to any requirement of this
Agreement,  Tenant shall be relieved of its  obligation  to pay such  Additional
Charges to the Entity to which they would  otherwise be due. If any payments due
from  Landlord  to Tenant  shall not be paid  within ten (10) days after its due
date,  Landlord  shall pay to Tenant,  on demand,  a late  charge (to the extent
permitted by law) computed at the Overdue Rate on the amount of such installment
from the due date of such installment to the date of payment thereof.

         In the event of any  failure  by Tenant to pay any  Additional  Charges
when due, Tenant shall promptly pay and discharge,  as Additional Charges, every
fine, penalty,  interest and cost which is added for non-payment or late payment
of such items. Landlord shall have all legal,  equitable and contractual rights,
powers and remedies provided either in this Agreement or by statute or otherwise
in the  case  of  non-payment  of the  Additional  Charges  as in  the  case  of
non-payment of the Minimum Rent and Additional Rent.

         3.3 Net Lease.  The Rent shall be  absolutely  net to  Landlord so that
this Agreement  shall yield to Landlord the full amount of the  installments  or
amounts of the Rent throughout the Term, subject to any other provisions of this
Agreement  which expressly  provide  otherwise,  including those  provisions for
adjustment or abatement of such Rent.

                                      -29-
<PAGE>

         3.4 No  Termination,  Abatement,  Etc Except as otherwise  specifically
provided in this Agreement,  each of Landlord and Tenant,  to the maximum extent
permitted by law,  shall remain bound by this  Agreement in accordance  with its
terms and shall not take any action  without the consent of the other to modify,
surrender  or  terminate  this  Agreement.  In  addition,  except  as  otherwise
expressly provided in this Agreement,  Tenant shall not seek, or be entitled to,
any abatement, deduction, deferment or reduction of the Rent, or set-off against
the  Rent,  nor shall the  respective  obligations  of  Landlord  and  Tenant be
otherwise  affected by reason of (a) any damage to or  destruction of the Leased
Property or any portion thereof from whatever cause or any Condemnation, (b) the
lawful or unlawful  prohibition  of, or  restriction  upon,  Tenant's use of the
Leased Property,  or any portion thereof,  or the interference  with such use by
any Person or by reason of  eviction  by  paramount  title;  (c) any claim which
Tenant may have against Landlord by reason of any default (other than a monetary
default) or breach of any warranty by Landlord under this Agreement or any other
agreement  between  Landlord  and Tenant,  or to which  Landlord  and Tenant are
parties;   (d)  any   bankruptcy,   insolvency,   reorganization,   composition,
readjustment,   liquidation,   dissolution,  winding  up  or  other  proceedings
affecting  Landlord or any assignee or  transferee  of Landlord;  or (e) for any
other cause whether similar or dissimilar to any of the foregoing  (other than a
monetary default by Landlord);  provided,  however, that the foregoing shall not
apply or be  construed  to restrict  Tenant's  rights in the event of any act or
omission by Landlord  constituting  negligence or willful misconduct.  Except as
otherwise  specifically  provided in this  Agreement,  Tenant  hereby waives all
rights  arising from any  occurrence  whatsoever,  which may now or hereafter be
conferred upon it by law (a) to modify, surrender or terminate this Agreement or
quit or surrender the Leased Property or any portion thereof, or (b) which would
entitle Tenant to any abatement,  reduction, suspension or deferment of the Rent
or other sums payable or other  obligations to be performed by Tenant hereunder.
The obligations of Tenant hereunder shall be separate and independent  covenants
and  agreements,  and the Rent and all other sums  payable  by Tenant  hereunder
shall  continue to be payable in all events  unless the  obligations  to pay the
same shall be terminated  pursuant to the express  provisions of this Agreement.
In any instance  where,  after the  occurrence of an Event of Default,  Landlord
retains funds which,  but for the occurrence of such Event of Default,  would be
payable to Tenant,  Landlord shall refund such funds to

                                      -30-
<PAGE>

Tenant to the  extent  the  amount  thereof  exceeds  the  amount  necessary  to
compensate  Landlord for any cost,  loss or damage  incurred in connection  with
such Event of Default.

         3.5 Retained  Funds.  Pursuant to the Purchase  Documents,  Landlord is
holding  the  Retained  Funds  as  security  for  the  faithful  observance  and
performance  by  Tenant  of all the  terms,  covenants  and  conditions  of this
Agreement by Tenant to be observed and  performed.  The Retained Funds shall not
be mortgaged,  assigned, transferred or otherwise encumbered by Tenant or any of
its  Affiliated  Persons  without the prior written  consent of Landlord and any
such act on the part of Tenant or any of its  Affiliated  Persons  without first
having obtained  Landlord's  consent shall be without force and effect and shall
not be binding upon Landlord.

         If an Event of Default shall occur and be continuing,  Landlord may, at
its option and without  prejudice to any other remedy which Landlord may have on
account  thereof,  appropriate  and apply the entire  Retained  Funds or so much
thereof as may be necessary to compensate Landlord toward the payment of Rent or
other sums or loss or damage  sustained  by  Landlord  due to such breach on the
part of Tenant.  It is understood  and agreed that the Retained Funds are not to
be considered as prepaid rent, nor shall damages be limited to the amount of the
Retained  Funds.  Provided  no Event  of  Default  shall  have  occurred  and be
continuing,  any unapplied balance of the Retained Funds shall be paid to Tenant
or its  Affiliated  Persons at the end of the Term or, in the event of any early
termination of this Agreement with respect to any Property, such portion thereof
as is allocable to such Property (as  reasonably  determined  by Landlord)  upon
such  termination.  Landlord  shall have no  obligation  to pay  interest on the
Retained  Funds and shall have the right to commingle  the same with  Landlord's
other funds. If Landlord conveys Landlord's  interest under this Agreement,  the
Retained Funds, or any part thereof not previously applied, shall be turned over
by Landlord to  Landlord's  grantee,  and, if so turned over,  Tenant shall look
solely  to  such  grantee  for  proper  application  of the  Retained  Funds  in
accordance  with  the  terms  of this  Section  3.5 and the  return  thereof  in
accordance herewith; provided, however, that Landlord shall not be released from
liability  with respect to any Retained Funds so turned over unless such grantee
shall have a Net Worth equal to or greater than the lesser of (i) ten (10) times
the amount of such  Retained  Funds so turned over or (ii) One  Hundred  Million
Dollars  ($100,000,000).  If

                                      -31-
<PAGE>

such grantee  shall not satisfy the aforesaid  Net Worth  requirement,  Landlord
shall,  in a guaranty in form and substance  reasonably  satisfactory to Tenant,
guarantee  payment  of the  amount  of the  Retained  Funds  so  turned  over in
accordance  with this  Agreement  and the  Purchase  Documents.  The holder of a
mortgage  on the  Leased  Property  shall not be  responsible  to Tenant for the
return or application of the Retained  Funds,  if it succeeds to the position of
Landlord  hereunder,  unless the Retained Funds shall have been received in hand
by such holder.

         In the event of bankruptcy or other creditor-debtor proceedings against
Tenant, the Retained Funds shall be deemed to be applied first to the payment of
Rent and other  charges due Landlord for all periods prior to the filing of such
proceedings.

                                   ARTICLE 4

                           USE OF THE LEASED PROPERTY

         4.1 Permitted Use.

             4.1.1  Permitted  Use.  (a) Tenant  shall,  at all times during the
Term,  subject to temporary  periods for the repair of damage caused by casualty
or Condemnation,  continuously use and operate each Property as an extended stay
hotel and any uses incidental thereto. Tenant shall not use or permit to be used
any Property or any portion  thereof for any other use without the prior written
consent of Landlord, which approval shall not be unreasonably withheld,  delayed
or  conditioned.  Tenant  shall  not  change  the  brand of the  Hotels  without
Landlord's  prior  written  consent,  which  consent  shall not be  unreasonably
withheld,  delayed or  conditioned,  it being agreed that,  on the  Commencement
Date, the Hotels shall be operated under the  "Candlewood  Hotel" brand.  No use
shall be made or  permitted to be made of any Property and no acts shall be done
thereon which will cause the  cancellation of any insurance policy covering such
Property or any part thereof that is required hereunder (unless another adequate
policy is available), nor shall Tenant sell or otherwise provide or permit to be
kept,  used or sold in or about any Property any article which may be prohibited
by law or by  the  standard  form  of  fire  insurance  policies,  or any  other
insurance policies required to be carried hereunder, or

                                      -32-
<PAGE>

fire underwriter's regulations.  Tenant shall, at its sole cost, comply with all
Insurance Requirements.

                  (b) In the event  that,  in the  reasonable  determination  of
         Tenant,  it shall no longer be  economically  practical  to operate any
         Property as a  Candlewood  hotel,  Tenant  shall give  Landlord  Notice
         thereof,  which Notice shall set forth in reasonable detail the reasons
         therefor. Thereafter, Landlord and Tenant shall negotiate in good faith
         to  agree  on an  alternative  use for the  Property  or a  replacement
         property  therefor  (in which  event  the  affected  Property  shall be
         transferred  to  Tenant's  designee),  appropriate  adjustments  to the
         Additional Rent and other related  matters;  provided,  however,  in no
         such event shall the Minimum Rent be reduced or abated.

             4.1.2  Necessary  Approvals.  Tenant  shall  proceed  with  all due
diligence and exercise  reasonable  efforts to obtain and maintain all approvals
necessary to use and operate, for its Permitted Use, each Property and the Hotel
located thereon under applicable law.

             4.1.3 Lawful Use, Etc. Tenant shall not use or suffer or permit the
use of the Leased  Property  or  Tenant's  Personal  Property,  if any,  for any
unlawful purpose.  Tenant shall not, and shall direct the Manager not to, commit
or suffer to be committed any waste on any Property,  or in any Hotel, nor shall
Tenant cause or permit any unlawful  nuisance  thereon or therein.  Tenant shall
not, and shall direct the Manager not to, suffer nor permit the Leased Property,
or any portion  thereof,  to be used in such a manner as (i) may  materially and
adversely impair Landlord's title thereto or to any portion thereof, or (ii) may
reasonably  allow a claim or claims for adverse  usage or adverse  possession by
the public,  as such,  or of implied  dedication  of the Leased  Property or any
portion thereof.

         4.2 Compliance with Legal/Insurance  Requirements,  Etc. Subject to the
provisions of Article 8 and Section 5.1.3(b), Tenant, at its sole expense, shall
(i) comply with all material Legal  Requirements  and Insurance  Requirements in
respect of the use, operation,  maintenance,  repair, alteration and restoration
of the  Leased  Property  and with the  terms  and  conditions  of any  sublease
affecting  the Leased  Property,  (ii) perform all  obligations  of the landlord
under any sublease affecting the Leased Property and (iii) procure, maintain and
comply with all  material  licenses,  and other  authorizations  and  agreements

                                      -33-
<PAGE>

required for any use of the Leased Property and Tenant's Personal  Property,  if
any, then being made, and for the proper erection,  installation,  operation and
maintenance of the Leased Property or any part thereof.

         4.3 Environmental Matters.

             4.3.1  Restriction on Use, Etc.  During the Term and any other time
that Tenant  shall be in  possession  of the Leased  Property,  Tenant shall not
store,  spill upon,  dispose of or transfer to or from the Leased  Property  any
Hazardous  Substance,  except in compliance with all Applicable Laws. During the
Term and any  other  time  that  Tenant  shall be in  possession  of the  Leased
Property,  Tenant shall  maintain (and shall direct the Manager to maintain) the
Leased  Property  at all  times  free  of any  Hazardous  Substance  (except  in
compliance with all Applicable Laws). Tenant shall promptly: (a) upon receipt of
notice or  knowledge  and shall  direct the  Manager  upon  receipt of notice or
knowledge  promptly to, notify Landlord in writing of any material change in the
nature or extent of Hazardous Substances at the Leased Property, (b) transmit to
Landlord a copy of any report  which is required to be filed with respect to the
Leased  Property  pursuant to SARA Title III or any other  Applicable  Law,  (c)
transmit  to  Landlord  copies  of  any  citations,  orders,  notices  or  other
governmental  communications received by Tenant or its agents or representatives
with respect thereto (collectively, "Environmental Notice"), which Environmental
Notice  requires a written  response  or any  action to be taken  and/or if such
Environmental  Notice  gives  notice of and/or  presents a material  risk of any
material  violation of any Applicable Law and/or presents a material risk of any
material cost,  expense,  loss or damage (an "Environmental  Obligation"),  (d),
subject to the  provisions of Article 8, observe and comply with all  Applicable
Laws relating to the use,  maintenance and disposal of Hazardous  Substances and
all  orders or  directives  from any  official,  court or  agency  of  competent
jurisdiction  relating  to the use or  maintenance  or  requiring  the  removal,
treatment,  containment  or other  disposition  thereof,  and (e) subject to the
provisions  of  Article  8, pay or  otherwise  dispose  of any  fine,  charge or
Imposition related thereto.

         If, at any time prior to the termination of this  Agreement,  Hazardous
Substances  (other than those maintained in accordance with Applicable Laws) are
discovered on the Leased Property, subject to Tenant's right to contest the same
in  accordance  with  Article 8, Tenant shall take all actions and incur any and
all
<PAGE>

expenses, as are required by any Government Agency and by Applicable Law, (i) to
clean up and remove from and about the Leased Property all Hazardous  Substances
thereon, (ii) to contain and prevent any further release or threat of release of
Hazardous Substances on or about the Leased Property and (iii) to use good faith
efforts to  eliminate  any  further  release  or threat of release of  Hazardous
Substances on or about the Leased Property.

             4.3.2 Indemnification of Landlord. Tenant shall protect,  indemnify
and hold harmless Landlord and each Hotel Mortgagee,  their trustees,  officers,
agents,  employees and beneficiaries,  and any of their respective successors or
assigns with respect to this Agreement  (collectively,  the  "Indemnitees"  and,
individually,  an "Indemnitee") for, from and against any and all debts,  liens,
claims,  causes of  action,  administrative  orders or  notices,  costs,  fines,
penalties or expenses (including, without limitation, reasonable attorney's fees
and  expenses)  imposed  upon,  incurred by or asserted  against any  Indemnitee
resulting from, either directly or indirectly,  the presence during the Term (or
any other time Tenant shall be in possession of the Leased Property) in, upon or
under  the  soil or  ground  water  of the  Leased  Property  or any  properties
surrounding the Leased Property of any Hazardous  Substances in violation of any
Applicable  Law,  provided  that any of the  foregoing  arises  by reason of any
failure by Tenant or any Person  claiming by, through or under Tenant to perform
or comply with any of the terms of this  Section  4.3,  except to the extent the
same arise from the acts or  omissions  of Landlord or any other  Indemnitee  or
during any period that Landlord or a Person  designated by Landlord  (other than
Tenant) is in possession of the Leased Property.  Tenant's duty herein includes,
but is not limited to, costs  associated with personal injury or property damage
claims as a result of the presence prior to the expiration or sooner termination
of the Term and the  surrender of the Leased  Property to Landlord in accordance
with the terms of this  Agreement of Hazardous  Substances in, upon or under the
soil or ground water of the Leased  Property in violation of any Applicable Law.
Upon  Notice  from  Landlord  and any  other of the  Indemnitees,  Tenant  shall
undertake the defense, at Tenant's sole cost and expense, of any indemnification
duties set forth herein, in which event,  Tenant shall not be liable for payment
of any duplicative attorneys' fees incurred by any Indemnitee.

                                      -35-
<PAGE>

         Tenant shall, upon demand,  pay to Landlord,  as an Additional  Charge,
any cost, expense,  loss or damage (including,  without  limitation,  reasonable
attorneys' fees)  reasonably  incurred by Landlord and arising from a failure of
Tenant to observe  and perform  the  requirements  of this  Section  4.3,  which
amounts  shall bear  interest from the date ten (10) Business Days after written
demand  therefor  is given to Tenant  until  paid by Tenant to  Landlord  at the
Overdue Rate.

             4.3.3  Survival.  The  provisions of this Section 4.3 shall survive
the expiration or sooner termination of this Agreement.

                                      -36-
<PAGE>

                                   ARTICLE 5

                            MAINTENANCE AND REPAIRS

         5.1 Maintenance and Repair.

             5.1.1 Tenant's General Obligations.  Tenant shall, at its sole cost
and expense (except as expressly provided in Section 5.1.3(b)),  keep the Leased
Property and all private roadways,  sidewalks and curbs appurtenant thereto (and
Tenant's Personal  Property) in good order and repair,  reasonable wear and tear
excepted  (whether  or not the need  for  such  repairs  occurs  as a result  of
Tenant's  use, any prior use, the elements or the age of the Leased  Property or
Tenant's Personal Property or any portion thereof),  and shall promptly make all
necessary and  appropriate  repairs and  replacements  thereto of every kind and
nature, whether interior or exterior,  structural or nonstructural,  ordinary or
extraordinary,  foreseen  or  unforeseen  or  arising  by reason of a  condition
existing prior to the  commencement  of the Term  (concealed or otherwise).  All
repairs shall be made in a good,  workmanlike  manner,  consistent with industry
standards for like hotels in like locales,  in  accordance  with all  applicable
federal,  state and local  statutes,  ordinances,  codes,  rules and regulations
relating to any such work. Tenant shall not take or omit to take any action, the
taking or omission of which would  materially and adversely  impair the value or
the  usefulness  of the Leased  Property or any  material  part  thereof for its
Permitted Use. Tenant's obligations under this Section 5.1.1 shall be limited in
the event of any casualty or Condemnation as set forth in Sections 10.2 and 11.2
and also as set forth in Section 5.1.3(b) and Tenant's  obligations with respect
to Hazardous Substances are as set forth in Section 4.3.

             5.1.2 FF&E Reserve.

                  (a) Upon execution of this Agreement, Tenant has established a
         reserve account (the "FF&E Reserve") in a bank designated by Tenant and
         approved by  Landlord.  The purpose of the FF&E Reserve is to cover the
         cost of:

         (i)      Replacements and renewals to any Hotel's furnishings, fixtures
                  and equipment;

         (ii)     Certain  routine repairs and maintenance to any Hotel building
                  which are normally capitalized under GAAP

                                      -37-
<PAGE>

                  such as exterior and interior repainting, resurfacing building
                  walls,  floors, roofs and parking areas, and replacing folding
                  walls and the like; and

         (iii)    Major   repairs,   alterations,   improvements,   renewals  or
                  replacements  to any Hotel's  buildings'  structure,  roof, or
                  exterior facade,  or to its mechanical,  electrical,  heating,
                  ventilating,   air   conditioning,    plumbing   or   vertical
                  transportation systems.

                    Tenant agrees that it will, from time to time,  execute such
         reasonable  documentation as may be requested by Landlord and any Hotel
         Mortgagee to assist  Landlord and such Hotel  Mortgagee in establishing
         or perfecting  the Hotel  Mortgagee's  security  interest in Landlord's
         residual interest in the funds which are in the FF&E Reserve; provided,
         however,  that no such documentation  shall contain any amendment to or
         modification  of  any  of  the  provisions  of  this  Agreement.  It is
         acknowledged  and  agreed  that,  during  the  Term,  funds in the FF&E
         Reserve are the property of Tenant.

                  (b)  Throughout the Term,  Tenant shall  transfer  (within ten
         (10) Business Days after the end of each  Accounting  Period during the
         Term)  into  the  FF&E  Reserve  an  amount  equal  to  the  Applicable
         Percentage of Total Hotel Sales for such  Accounting  Period.  Together
         with  the  documentation  provided  to  Landlord  pursuant  to  Section
         3.1.2(c),  Tenant shall  deliver to Landlord an  Officer's  Certificate
         setting  forth the total  amount of deposits  made to and  expenditures
         from the FF&E Reserve for the  preceding  Fiscal Year,  together with a
         reconciliation of such expenditures with the applicable FF&E Estimate.

                  (c) With respect to each Lease Year,  Tenant shall  prepare an
         estimate (the "FF&E Estimate") of FF&E Reserve  expenditures  necessary
         during the ensuing  Fiscal Year, and shall submit such FF&E Estimate to
         Landlord,  on or before December 1 of the preceding Lease Year, for its
         review and approval, which approval shall not be unreasonably withheld,
         delayed  or  conditioned.  In the event  that  Landlord  shall  fail to
         respond  within  thirty (30) days after  receipt of the FF&E  Estimate,
         such  FF&E  Estimate  shall  be  deemed   approved  by  Landlord.   All
         expenditures  from the FF&E Reserve  shall be (as to both the amount of

                                      -38-
<PAGE>

         each such  expenditure  and the timing  thereof)  both  reasonable  and
         necessary,  given the objective  that the Hotels will be maintained and
         operated to a standard  comparable to competitive  hotels.  All amounts
         from the FF&E Reserve  shall be paid to Persons who are not  Affiliated
         Persons of Tenant without mark-up or allocated internal costs by Tenant
         or its Affiliated Persons.

                  (d) Tenant shall,  consistent with the FF&E Estimate  approved
         by Landlord,  from time to time make expenditures from the FF&E Reserve
         as it deems necessary provided that Tenant shall not materially deviate
         from the FF&E Estimate  approved by Landlord without the prior approval
         of Landlord, which approval shall not be unreasonably withheld, delayed
         or conditioned,  except in the case of emergency where immediate action
         is necessary to prevent imminent harm to person or property.

                  (e)  Upon  the  expiration  or  sooner   termination  of  this
         Agreement,  funds in the FF&E Reserve and all property  purchased  with
         funds from the FF&E Reserve during the Term shall be paid,  granted and
         assigned to Landlord as Additional Charges.

                  (f) Notwithstanding anything to the contrary set forth in this
         Agreement,  no portion of the FF&E Reserve may be used for "punch-list"
         or other  initial  construction  items,  the cost of which shall be the
         sole responsibility of Tenant and its Affiliated Persons.

             5.1.3 Landlord's Obligations.

                  (a) Except as otherwise  expressly provided in this Agreement,
         Landlord  shall not, under any  circumstances,  be required to build or
         rebuild any improvement on the Leased Property, or to make any repairs,
         replacements,  alterations,  restorations  or renewals of any nature or
         description to the Leased Property,  whether ordinary or extraordinary,
         structural or  nonstructural,  foreseen or  unforeseen,  or to make any
         expenditure  whatsoever with respect thereto, or to maintain the Leased
         Property in any way.  Except as  otherwise  expressly  provided in this
         Agreement,  Tenant hereby waives,  to the maximum  extent  permitted by
         law, the right to make  repairs at the expense of Landlord  pursuant to
         any law in effect on the date  hereof or  hereafter  enacted.  Landlord
         shall have the right

                                      -39-
<PAGE>

         to give, record and post, as appropriate,  notices of nonresponsibility
         under any mechanic's lien laws now or hereafter existing.

                  (b) If,  at any  time,  funds  in the  FF&E  Reserve  shall be
         insufficient  for  necessary  and  permitted  expenditures  thereof or,
         pursuant to the terms of this Agreement, Tenant is required to make any
         expenditures in connection  with any repair,  maintenance or renovation
         with   respect  to  the  Leased   Property   and  the  amount  of  such
         disbursements or expenditures exceeds the amount on deposit in the FF&E
         Reserve or such repair,  maintenance  or  renovation is not a permitted
         expenditure from the FF&E Reserve as described in Section  5.1.2(a)(i),
         (ii) and (iii),  Tenant  may, at its  election,  give  Landlord  Notice
         thereof, which Notice shall set forth, in reasonable detail, the nature
         of the required repair,  renovation or replacement,  the estimated cost
         thereof and such other information with respect thereto as Landlord may
         reasonably  require.  Provided  that no Event  of  Default  shall  have
         occurred and be continuing and Tenant shall  otherwise  comply with the
         applicable  provisions  of Article 6, Landlord  shall,  within ten (10)
         Business Days after such Notice,  subject to and in accordance with the
         applicable  provisions of Article 6,  disburse  such required  funds to
         Tenant (or,  if Tenant  shall so elect,  directly  to any other  Person
         performing the required work) and, upon such disbursement,  the Minimum
         Rent shall be  adjusted  as  provided  in Section  3.1.1(b);  provided,
         however,  that, in the event that Landlord  shall elect not to disburse
         any funds  pursuant to this Section  5.1.3(b),  Tenant's  sole recourse
         shall be to elect not to make the  applicable  repair,  maintenance  or
         renovation,  and such failure  shall,  except as otherwise  provided in
         Section 5.1.2(f),  not be deemed a Default or Event of Default.  Tenant
         shall  include a good faith  projection of funds  required  pursuant to
         this Section 5.1.3(b) in the FF&E Estimate.

             5.1.4   Nonresponsibility   of  Landlord,   Etc.  All  materialmen,
contractors, artisans, mechanics and laborers and other persons contracting with
Tenant with  respect to the Leased  Property,  or any part  thereof,  are hereby
charged with notice that liens on the Leased Property or on Landlord's  interest
therein  are  expressly  prohibited  and that they must look solely to Tenant to
secure payment for any work done or material

                                      -40-
<PAGE>

furnished by Tenant or for any other purpose during the term of this Agreement.

         Nothing contained in this Agreement shall be deemed or construed in any
way as constituting the consent or request of Landlord,  express or implied,  by
inference or otherwise, to any contractor, subcontractor, laborer or materialmen
for the  performance  of any labor or the  furnishing  of any  materials for any
alteration,  addition,  improvement or repair to the Leased Property or any part
thereof or as giving  Tenant any right,  power or  authority  to contract for or
permit the rendering of any services or the  furnishing  of any  materials  that
would give rise to the filing of any lien  against  the Leased  Property  or any
part thereof nor to subject Landlord's estate in the Leased Property or any part
thereof to liability  under any mechanic's  lien law of any State in any way, it
being expressly  understood  Landlord's  estate shall not be subject to any such
liability.

         5.2  Tenant's  Personal  Property.  Tenant  shall  provide and maintain
throughout the Term all such Tenant's Personal Property as shall be necessary in
order to operate in compliance with applicable  material Legal  Requirements and
Insurance  Requirements  and otherwise in accordance with customary  practice in
the industry for the Permitted Use, and all of such Tenant's  Personal  Property
shall, upon the expiration or earlier termination of this Agreement,  become the
property of Landlord.  If, from and after the Commencement Date, Tenant acquires
an  interest  in any  item of  tangible  personal  property  (other  than  motor
vehicles) on, or in connection with, the Leased Property which belongs to anyone
other than Tenant,  Tenant shall require the agreements  permitting  such use to
provide that Landlord or its designee may assume Tenant's rights and obligations
under such agreement  upon the  termination of this Agreement and the assumption
of management or operation of the Hotel by Landlord or its designee.

         5.3  Yield  Up.  Upon the  expiration  or  sooner  termination  of this
Agreement,  Tenant shall vacate and surrender the Leased Property to Landlord in
substantially  the same  condition  in which the Leased  Property  was in on the
Commencement Date, except as repaired, rebuilt, restored, altered or added to as
permitted or required by the provisions of this  Agreement,  reasonable wear and
tear  excepted  (and casualty  damage and  Condemnation,  in the event that this
Agreement is terminated  following a casualty or Condemnation in accordance with
Article

                                      -41-
<PAGE>

10 or Article 11  excepted),  and except for repairs  Tenant  elects not to make
pursuant to Section 5.1.3(b).

         In  addition,  upon  the  expiration  or  earlier  termination  of this
Agreement, Tenant shall, at Landlord's sole cost and expense, use its good faith
efforts to transfer to and  cooperate  with  Landlord or  Landlord's  nominee in
connection  with the  processing of all  applications  for  licenses,  operating
permits  and other  governmental  authorizations  and all  contracts,  including
contracts  with  governmental  or  quasi-governmental   Entities  which  may  be
necessary for the use and operation of the Hotel as then operated.  If requested
by  Landlord,  Tenant  will direct the  Manager to  continue,  or if there is no
Manager,  Tenant  shall  continue to manage one or more of the Hotels  after the
expiration  of the Term and for up to one (1)  year,  on such  reasonable  terms
(which  shall  include a market  rate  management  fee,  customary  royalty  for
non-exclusive  license  to use the  trademarks  then  being  used at the  Leased
Property and an agreement  to reimburse  the Manager or Tenant,  as the case may
be,  for  its  reasonable  out-of-pocket  costs  and  expenses,  and  reasonable
administrative costs), as Landlord shall reasonably request.

         5.4 Management  Agreement.  Tenant shall not, without  Landlord's prior
written  consent (which consent shall not be unreasonably  withheld,  delayed or
conditioned),  enter into, or amend or modify the  provisions of any  Management
Agreement.  Any Management  Agreement shall be subordinate to this Agreement and
shall provide, inter alia, that all amounts due from Tenant to the Manager shall
be  subordinate  to all amounts due from Tenant to Landlord  (provided  that, as
long as no Event of Default has occurred and is  continuing,  Tenant may pay all
amounts due to a Manager pursuant to a Management Agreement) and for termination
thereof,  at Landlord's option,  upon the termination of this Agreement.  Tenant
shall not take any  action,  grant any  consent or permit  any action  under any
Management  Agreement  which might have a material  adverse  effect on Landlord,
without  the prior  written  consent of  Landlord,  which  consent  shall not be
unreasonably withheld, delayed or conditioned.

                                   ARTICLE 6

                               IMPROVEMENTS, ETC.

         6.1  Improvements  to the  Leased  Property.  Tenant  shall  not  make,
construct or install any Capital  Additions (other than

                                      -42-
<PAGE>

Capital Additions of the type described in Section 5.1.2(a)(ii) or 5.1.2(a)(iii)
and approved pursuant to Section 5.1.2(c)) without, in each instance,  obtaining
Landlord's  prior  written  consent,  which  consent  shall not be  unreasonably
withheld,  delayed or conditioned provided that (a) construction or installation
of the same would not adversely affect or violate any material Legal Requirement
or  Insurance  Requirement  applicable  to the Leased  Property and (b) Landlord
shall have received an Officer's  Certificate  certifying as to the satisfaction
of the conditions set out in clause (a) above;  provided,  however, that no such
consent shall be required in the event  immediate  action is required to prevent
imminent  harm to person or property.  Prior to commencing  construction  of any
Capital  Addition,  Tenant  shall  submit to  Landlord,  in writing,  a proposal
setting forth,  in reasonable  detail,  any such proposed  improvement and shall
provide to Landlord such plans and specifications,  and such permits,  licenses,
contracts  and  such  other  information  concerning  the same as  Landlord  may
reasonably request. Landlord shall have thirty (30) days to review all materials
submitted to Landlord in connection with any such proposal.  Failure of Landlord
to respond to  Tenant's  proposal  within  such  30-day  period  shall be deemed
approval  thereof.  Without  limiting  the  generality  of the  foregoing,  such
proposal shall indicate the  approximate  projected  cost of  constructing  such
proposed  improvement  and the use or uses to which it will be put.  No  Capital
Addition  shall be made which  would tie in or connect  any Leased  Improvements
with any other improvements on property adjacent to the Leased Property (and not
part of the Land) including,  without limitation,  tie-ins of buildings or other
structures or utilities.  Except as permitted  herein,  Tenant shall not finance
the cost of any construction of such improvement by the granting of a lien on or
security  interest  in the Leased  Property  or such  improvement,  or  Tenant's
interest therein,  without the prior written consent of Landlord,  which consent
may be withheld by Landlord in Landlord's sole discretion. Any such improvements
shall,  upon the expiration or sooner  termination of this Agreement,  remain or
pass to and become the property of Landlord,  free and clear of all encumbrances
other than Permitted Encumbrances.

         6.2 Salvage.  All materials which are scrapped or removed in connection
with the making of either Capital Additions or non-Capital  Additions or repairs
required by Article 5 shall be or become the property of the party that paid for
such work.

                                      -43-
<PAGE>
                                   ARTICLE 7

                                     LIENS

         7.1  Liens.  Subject  to  Article 8,  Tenant  shall  not,  directly  or
indirectly,  create or allow to  remain  and shall  promptly  discharge,  at its
expense, any lien, encumbrance,  attachment,  title retention agreement or claim
upon  the  Leased  Property  or  Tenant's  leasehold  interest  therein  or  any
attachment,  levy,  claim or encumbrance in respect of the Rent,  other than (a)
Permitted Encumbrances, (b) restrictions, liens and other encumbrances which are
consented to in writing by Landlord, (c) liens for those taxes of Landlord which
Tenant is not required to pay hereunder,  (d) subleases permitted by Article 16,
(e) liens for  Impositions or for sums resulting from  noncompliance  with Legal
Requirements  so long as (i) the same are not yet due and  payable,  or (ii) are
being contested in accordance with Article 8, (f) liens of mechanics,  laborers,
materialmen,  suppliers or vendors  incurred in the ordinary  course of business
that are not yet due and  payable  or are for sums that are being  contested  in
accordance  with Article 8, (g) any Hotel Mortgages or other liens which are the
responsibility  of  Landlord  pursuant to the  provisions  of Article 20 and (h)
Landlord Liens and any other voluntary liens created by Landlord.

         7.2 Landlord's  Lien. In addition to any statutory  landlord's lien and
in order to secure  payment of the Rent and all other sums payable  hereunder by
Tenant,  and to secure  payment of any loss,  cost or damage which  Landlord may
suffer by reason of Tenant's breach of this Agreement, Tenant hereby grants unto
Landlord, to the maximum extent permitted by Applicable Law, a security interest
in and an express contractual lien upon Tenant's Personal Property (except motor
vehicles and liquor licenses and permits),  and Tenant's  interest in all ledger
sheets,  files,   records,   documents  and  instruments   (including,   without
limitation,  computer  programs,  tapes and related  electronic data processing)
relating  to the  operation  of the  Hotels  (the  "Records")  and all  proceeds
therefrom,  subject to any Permitted  Encumbrances;  and such Tenant's  Personal
Property shall not be removed from the Leased Property at any time when an Event
of Default has occurred and is continuing.

         Upon Landlord's request, Tenant shall execute and deliver any financing
statements  necessary to perfect the  security  interest of Landlord in Tenant's
Personal  Property and the

                                      -44-
<PAGE>

proceeds thereof in accordance with the provisions of the applicable laws of the
State.  During the  continuance  of an Event of Default,  Tenant  hereby  grants
Landlord an irrevocable limited power of attorney,  coupled with an interest, to
execute all such  financing  statements in Tenant's name,  place and stead.  The
security  interest  herein  granted is in addition to any statutory lien for the
Rent.

                                   ARTICLE 8

                               PERMITTED CONTESTS

         Tenant  shall have the right to contest  the amount or  validity of any
Imposition, Legal Requirement, Insurance Requirement,  Environmental Obligation,
lien, attachment, levy, encumbrance, charge or claim (collectively, "Claims") as
to the Leased  Property,  by appropriate  legal  proceedings,  conducted in good
faith and with due diligence, provided that (a) the foregoing shall in no way be
construed as relieving,  modifying or extending  Tenant's  obligation to pay any
Claims as finally  determined,  (b) such  contest  shall not cause  Landlord  or
Tenant to be in default  under any  mortgage  or deed of trust  encumbering  the
Leased Property (Landlord agreeing that any such mortgage or deed of trust shall
permit Tenant to exercise the rights granted  pursuant to this Article 8) or any
interest  therein or result in or  reasonably  be  expected  to result in a lien
attaching to the Leased  Property  (unless Tenant shall provide  Landlord with a
bond or other  assurance  reasonably  acceptable to Landlord with respect to any
such lien),  (c) no part of the Leased  Property nor any Rent therefrom shall be
in any immediate danger of sale, forfeiture,  attachment or loss, and (d) Tenant
shall  indemnify  and hold harmless  Landlord from and against any cost,  claim,
damage,  penalty or reasonable expense,  including  reasonable  attorneys' fees,
incurred by Landlord in connection  therewith or as a result  thereof.  Landlord
agrees to join in any such  proceedings  if required  legally to prosecute  such
contest,  provided that Landlord shall not thereby be subjected to any liability
therefor  (including,  without  limitation,  for the  payment  of any  costs  or
expenses in connection  therewith) unless Tenant agrees by agreement in form and
substance reasonably  satisfactory to Landlord, to assume and indemnify Landlord
with  respect to the same.  Tenant shall be entitled to any refund of any Claims
and such  charges  and  penalties  or interest  thereon  which have been paid by
Tenant or paid by Landlord to the extent that Landlord has been fully reimbursed
by Tenant.  If Tenant

                                      -45-
<PAGE>

shall fail (x) to pay or cause to be paid any Claims  when  finally  determined,
(y) to provide  reasonable  security therefor or (z) to prosecute or cause to be
prosecuted  any such contest  diligently  and in good faith,  Landlord may, upon
reasonable  notice to Tenant  (which  notice  shall not be  required if Landlord
shall reasonably determine that the same is not practicable),  pay such charges,
together with interest and penalties due with respect thereto,  and Tenant shall
reimburse Landlord therefor, upon demand, as Additional Charges.

                                   ARTICLE 9

                         INSURANCE AND INDEMNIFICATION

         9.1 General Insurance  Requirements.  Tenant shall, at all times during
the Term and at any other  time  Tenant  shall be in  possession  of the  Leased
Property,  keep the Leased Property and all property located therein or thereon,
insured against the risks and in the amounts as follows and shall maintain, with
respect to each Property, the following insurance:

                  (a) "All-risk" property insurance, including insurance against
         loss or damage by fire,  vandalism and malicious mischief,  earthquake,
         explosion  of  steam  boilers,   pressure   vessels  or  other  similar
         apparatus,  now or  hereafter  installed  in the Hotel  located at such
         Property,  with the usual extended coverage endorsements,  in an amount
         equal to one hundred percent (100%) of the then full  Replacement  Cost
         thereof (as defined in Section 9.2);

                  (b)  Business  interruption  insurance  covering  risk of loss
         during the lesser of the first twelve (12) months of  reconstruction or
         the actual  reconstruction period necessitated by the occurrence of any
         of the hazards  described in subparagraph (a) above, in such amounts as
         may be customary for comparable properties in the area and in an amount
         sufficient to prevent Landlord or Tenant from becoming a co-insurer;

                  (c)  Comprehensive  general  liability  insurance,   including
         bodily injury and property damage in a form reasonably  satisfactory to
         Landlord (and including,  without  limitation,  broad form  contractual
         liability,  independent  contractor's  hazard and completed  operations
         coverage) in an amount not less than One Million  Dollars  ($1,000,000)
         per occurrence,  Two Million Dollars  ($2,000,000) in the

                                      -46-
<PAGE>

         aggregate  and  umbrella  coverage  of all such claims in an amount not
         less than Seventy-Five Million Dollars ($75,000,000);

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

                  (e) Worker's  compensation  insurance  coverage if required by
         applicable law for all persons employed by Tenant on such Property with
         statutory  limits  and  otherwise  with  limits  of and  provisions  in
         accordance with the requirements of applicable local, State and federal
         law, and employer's  liability  insurance as is customarily  carried by
         similar employers; and

                  (f) Such additional  insurance as may be reasonably  required,
         from time to time,  by  Landlord  or any Hotel  Mortgagee  and which is
         customarily carried by comparable lodging properties in the area.

         9.2 Replacement Cost. "Replacement Cost" as used herein, shall mean the
estimated  replacement cost of the property,  including  estimated  increases in
construction  costs as  determined  annually by Landlord  and Tenant,  requiring
replacement from time to time, less exclusions  provided in the standard form of
fire  insurance  policy.  In the event either party  believes that the then full
Replacement  Cost has  increased or decreased at any time during the Term,  such
party, at its own cost,  shall have the right to have such full Replacement Cost
redetermined by an independent accredited appraiser approved by the other, which
approval shall not be  unreasonably  withheld or delayed.  The party desiring to
have the full  Replacement Cost so redetermined  shall forthwith,  on receipt of
such  determination  by such  appraiser,  give Notice thereof to the other.  The
determination of such appraiser shall be final and binding on the parties hereto
until any  subsequent  determination  under this  Section  9.2, and Tenant shall
forthwith  conform  the  amount  of  the  insurance  carried  to the  amount  so
determined by the appraiser.

                                      -47-
<PAGE>

         9.3 Waiver of  Subrogation.  Landlord and Tenant agree that (insofar as
and to the extent that such agreement may be effective  without  invalidating or
making it impossible to secure  insurance  coverage from  responsible  insurance
companies  doing  business in any State) with respect to any property loss which
is covered by insurance then being carried by Landlord or Tenant,  respectively,
the party  carrying such insurance and suffering said loss releases the other of
and from any and all claims with respect to such loss;  and they  further  agree
that their  respective  insurance  companies  shall have no right of subrogation
against  the other on account  thereof,  even  though  extra  premium may result
therefrom.  In the event that any extra premium is payable by Tenant as a result
of this provision,  Landlord shall not be liable for reimbursement to Tenant for
such extra premium.

         9.4 Form  Satisfactory,  Etc. All insurance  policies and  endorsements
required  pursuant to this Article 9 shall be fully paid for,  nonassessable and
be issued by insurance carriers authorized to do business in the State, having a
general policy  holder's rating of no less than A in Best's latest rating guide.
All such  policies  described in Sections  9.1(a)  through (d) shall  include no
deductible in excess of Two Hundred Fifty Thousand Dollars  ($250,000) (with the
exception  of  insurance  described  in Section  9.1(a)  providing  coverage for
windstorm  which may have a deductible  not  exceeding  five percent (5%) of the
policy  amount  for such  insurance  or such  lesser  amount as may be usual and
customary in the insurance industry for like properties) and, with the exception
of the insurance described in Sections 9.1(e), shall name Landlord and any Hotel
Mortgagee  as  additional  insureds,  as their  interests  may appear.  All loss
adjustments shall be payable as provided in Article 10, except that losses under
Sections 9.1(c) and (e) shall be payable directly to the party entitled thereto.
Tenant shall cause all insurance  premiums to be paid and shall deliver policies
or  certificates  thereof to Landlord prior to their  effective date (and,  with
respect to any renewal policy,  prior to the expiration of the existing policy).
All such policies shall provide Landlord (and any Hotel Mortgagee if required by
the same)  thirty  (30) days  prior  written  notice of any  material  change or
cancellation  of such  policy.  In the event  Tenant  shall fail to effect  such
insurance as herein  required,  to pay the premiums  therefor or to deliver such
policies  or  certificates  to  Landlord  or any  Hotel  Mortgagee  at the times
required,  Landlord  shall have the right,  upon  Notice to Tenant,

                                      -48-
<PAGE>

but not the obligation, to acquire such insurance and pay the premiums therefor,
which amounts shall be payable to Landlord,  upon demand, as Additional Charges,
together  with interest  accrued  thereon at the Overdue Rate from the date such
payment is made until (but excluding) the date repaid.

         9.5 Blanket Policy.  Notwithstanding anything to the contrary contained
in this Article 9, Tenant's obligation to maintain the insurance herein required
may be brought within the coverage of a so-called  blanket policy or policies of
insurance  carried and  maintained  by Tenant,  provided,  that (a) the coverage
thereby  afforded will not be reduced or diminished  from that which would exist
under a separate policy meeting all other  requirements  of this Agreement,  and
(b) the requirements of this Article 9 are otherwise satisfied. Without limiting
the  foregoing,  the amounts of  insurance  that are  required to be  maintained
pursuant  to Section  9.1 shall be on a Hotel by Hotel  basis,  and shall not be
subject  to an  aggregate  limit,  except  for flood,  earthquake  and  umbrella
coverages.

         9.6  No  Separate  Insurance.   Tenant  shall  not  take  out  separate
insurance,  concurrent  in form or  contributing  in the event of loss with that
required by this Article 9, or increase the amount of any existing  insurance by
securing an additional policy or additional policies,  unless all parties having
an  insurable  interest  in the  subject  matter  of such  insurance,  including
Landlord and all Hotel Mortgagees,  are included therein as additional  insureds
and the loss is payable  under such  insurance  in the same manner as losses are
payable  under  this  Agreement.  In the event  Tenant  shall  take out any such
separate  insurance  or  increase  any  of the  amounts  of  the  then  existing
insurance, Tenant shall give Landlord prompt Notice thereof.

         9.7  Indemnification of Landlord.  Notwithstanding the existence of any
insurance  provided  for herein and without  regard to the policy  limits of any
such insurance,  Tenant shall protect, indemnify and hold harmless Landlord for,
from and against  all  liabilities,  obligations,  claims,  damages,  penalties,
causes of action, costs and reasonable expenses (including,  without limitation,
reasonable  attorneys'  fees), to the maximum extent  permitted by law,  imposed
upon or  incurred by or asserted  against  Landlord by reason of the  following,
except to the extent caused by Landlord's  negligence on willful misconduct or a
Landlord Default: (a) any accident,  injury to or death of persons or loss of or
damage to  property  occurring

                                      -49-
<PAGE>

on or about the Leased Property or adjoining sidewalks or rights of way, (b) any
past, present or future use, misuse, non-use, condition, management, maintenance
or repair by Tenant or anyone  claiming  under Tenant of the Leased  Property or
Tenant's   Personal   Property  or  any  litigation,   proceeding  or  claim  by
governmental  entities or other third parties to which  Landlord is made a party
or participant  relating to the Leased Property or Tenant's Personal Property or
such use, misuse, non-use, condition, management, maintenance, or repair thereof
including,  failure to perform obligations (other than Condemnation proceedings)
to which Landlord is made a party,  (c) any Impositions that are the obligations
of Tenant to pay pursuant to the applicable  provisions of this  Agreement,  and
(d) any failure on the part of Tenant or anyone claiming under Tenant to perform
or comply with any of the terms of this Agreement. Tenant, at its expense, shall
contest,  resist and defend any such  claim,  action or  proceeding  asserted or
instituted  against  Landlord (and shall not be responsible  for any duplicative
attorneys' fees incurred by Landlord) or may compromise or otherwise  dispose of
the same,  with  Landlord's  prior  written  consent  (which  consent may not be
unreasonably withheld, delayed or conditioned).  The obligations of Tenant under
this Section 9.7 are in addition to the obligations set forth in Section 4.3 and
shall survive the termination of this Agreement.

                                      -50-
<PAGE>

                                   ARTICLE 10

                                    CASUALTY

         10.1 Insurance Proceeds.  Except as provided in the last clause of this
sentence,  all proceeds payable by reason of any loss or damage to any Property,
or any portion  thereof,  and insured under any policy of insurance  required by
Article 9 (other than the proceeds of any business interruption insurance) shall
be paid directly to Landlord (subject to the provisions of Section 10.2) and all
loss  adjustments  with respect to losses  payable to Landlord shall require the
prior  written  consent of Landlord,  which  consent  shall not be  unreasonably
withheld, delayed or conditioned;  provided,  however, that, so long as no Event
of Default shall have occurred and be continuing, all such proceeds less than or
equal to Five Hundred  Thousand  Dollars  ($500,000)  shall be paid  directly to
Tenant and such losses may be adjusted without Landlord's  consent. If Tenant is
required to reconstruct or repair any Property as provided herein, such proceeds
shall be paid out by  Landlord  from  time to time for the  reasonable  costs of
reconstruction  or  repair  of such  Property  necessitated  by such  damage  or
destruction, subject to and in accordance with the provisions of Section 10.2.4.
Provided  no Default or Event of Default has  occurred  and is  continuing,  any
excess  proceeds of insurance  remaining after the completion of the restoration
shall be paid to Tenant.  In the event that the provisions of Section 10.2.1 are
applicable,  the  insurance  proceeds  shall be retained  by the party  entitled
thereto pursuant to Section 10.2.1.

         10.2 Damage or Destruction.

         10.2.1 Damage or Destruction of Leased  Property.  If, during the Term,
any  Property  shall be totally or  partially  destroyed  and the Hotel  located
thereon is thereby rendered Unsuitable for Its Permitted Use, Tenant may, by the
giving of Notice thereof to Landlord,  within ninety (90) days after the date of
casualty,  terminate  this  Agreement  with respect to such  Property,  in which
event,  Landlord shall be entitled to retain the insurance  proceeds  payable on
account  of such  damage,  except  that  Landlord  shall pay to  Tenant  any net
proceeds in excess of the replacement cost of such Property reasonably allocable
to the value of  Tenant's  leasehold,  Tenant's  Personal  Property  and Capital
Additions paid for by Tenant.

                                      -51-
<PAGE>

         10.2.2 Partial Damage or Destruction. If, during the Term, any Property
shall be totally or partially destroyed but the Hotel is not rendered Unsuitable
for Its Permitted Use,  Tenant shall promptly  restore such Hotel as provided in
Section  10.2.4 unless this Agreement is terminated as to such Hotel as provided
in Section 10.2.3.

         10.2.3  Insufficient  Insurance  Proceeds.  If  this  Agreement  is not
otherwise  terminated  pursuant to this Article 10 and the cost of the repair or
restoration of the applicable  Property exceeds the amount of insurance proceeds
received  by  Landlord  and Tenant  pursuant to Section  9(a),  (c),  (d) or, if
applicable,  (f),  Tenant shall give Landlord  Notice thereof which notice shall
set forth in reasonable  detail the nature of such deficiency and whether Tenant
shall pay and assume the amount of such deficiency  (Tenant having no obligation
to do so, except that, if Tenant shall elect to make such funds  available,  the
same  shall  become  an  irrevocable  obligation  of  Tenant  pursuant  to  this
Agreement).  In the event Tenant shall elect not to pay and assume the amount of
such  deficiency,  Landlord  shall  have the  right  (but  not the  obligation),
exercisable at Landlord's sole election by Notice to Tenant,  given within sixty
(60) days after Tenant's  notice of the  deficiency,  to elect to make available
for  application  to the  cost of  repair  or  restoration  the  amount  of such
deficiency;  provided, however, in such event, upon any disbursement by Landlord
thereof, the Minimum Rent shall be adjusted as provided in Section 3.1.1(b).  In
the event that neither  Landlord nor Tenant shall elect to make such  deficiency
available  for  restoration,  either  Landlord  or  Tenant  may  terminate  this
Agreement  with  respect  to the  affected  Property  by  Notice  to the  other,
whereupon,  this  Agreement  shall  terminate  and insurance  proceeds  shall be
distributed  as provided  in Section  10.2.1.  It is  expressly  understood  and
agreed,  however,  that,  notwithstanding  anything  in  this  Agreement  to the
contrary,  Tenant shall be strictly liable and solely responsible for the amount
of any  deductible  and shall,  upon any insurable  loss, pay over the amount of
such  deductible to Landlord at the time and in the manner  herein  provided for
payment of the applicable proceeds to Landlord.

         10.2.4  Disbursement  of  Proceeds.  In the event Tenant is required to
restore  any  Property  pursuant  to  Section  10.2  and this  Agreement  is not
terminated  as to such  Property  pursuant  to this  Article  10,  Tenant  shall
commence promptly and continue  diligently to perform the repair and restoration
of

                                      -52-
<PAGE>

such Property (hereinafter called the "Work"), so as to restore such Property in
material  compliance with all Legal Requirements and so that such Property shall
be, to the extent  practicable,  substantially  equivalent  in value and general
utility to its  general  utility and value  immediately  prior to such damage or
destruction.  Subject to the terms hereof,  Landlord shall advance the insurance
proceeds  and any  additional  amounts  payable by Landlord  pursuant to Section
10.2.3 or  otherwise  deposited  with  Landlord to Tenant  regularly  during the
repair and  restoration  period so as to permit payment for the cost of any such
restoration  and repair.  Any such advances  shall be made not more than monthly
within  ten (10)  Business  Days  after  Tenant  submits  to  Landlord a written
requisition and  substantiation  therefor on AIA Forms G702 and G703 (or on such
other form or forms as may be reasonably acceptable to Landlord).  Landlord may,
at its  option,  condition  advancement  of such  insurance  proceeds  and other
amounts on (i) the absence of any Event of Default,  (ii) its  approval of plans
and  specifications  of an architect  satisfactory  to Landlord  (which approval
shall not be  unreasonably  withheld,  delayed or  conditioned),  (iii)  general
contractors'  estimates,  (iv)  architect's  certificates,  (v) conditional lien
waivers of general contractors,  if available,  (vi) evidence of approval by all
governmental authorities and other regulatory bodies whose approval is required,
(vii),  if Tenant has elected to advance  deficiency  funds  pursuant to Section
10.2.3, Tenant depositing the amount thereof with Landlord and (viii) such other
certificates as Landlord may, from time to time, reasonably require.

         Landlord's obligation to disburse insurance proceeds under this Article
10 during the last two (2) years of the Term  (including any automatic  renewals
thereof) shall be subject to the release of such proceeds by any Hotel Mortgagee
to Landlord.  If any Hotel  Mortgagee  shall be unwilling to disburse  insurance
proceeds in accordance with the terms of this  Agreement,  Tenant shall have the
right, by the giving of Notice thereof to Landlord within ten (10) Business Days
after Tenant  learns of such  unwillingness,  to treat such Property as rendered
Unsuitable  for its  Permitted  Use for  purposes  of Section  10.2.1.  Tenant's
obligation to restore the applicable  Property pursuant to this Article 10 shall
be subject to the release of  available  insurance  proceeds  by the  applicable
Hotel Mortgagee to Landlord or directly to Tenant.

                                      -53-
<PAGE>

         10.3 Damage Near End of Term. Notwithstanding any provisions of Section
10.1 or 10.2 to the contrary, if damage to or destruction of any Property occurs
during  the last two (2) years of the Term  (including  any  automatic  Extended
Terms) and if such damage or  destruction  cannot  reasonably  be expected to be
fully  repaired and restored  prior to the date that is twelve (12) months prior
to the end of the Term,  the provisions of Section 10.2.1 shall apply as if such
Property had been totally or partially  destroyed and the Hotel thereon rendered
Unsuitable for its Permitted Use.

         10.4 Tenant's Property. All insurance proceeds payable by reason of any
loss of or damage to any of Tenant's  Personal  Property shall be paid to Tenant
and, to the extent necessary to repair or replace Tenant's  Personal Property in
accordance  with Section  10.5,  Tenant shall hold such proceeds in trust to pay
the cost of repairing or replacing damaged Tenant's Personal Property.

         10.5 Restoration of Tenant's Property. If Tenant is required to restore
any Property as hereinabove  provided and this Agreement is not terminated as to
such  Property  pursuant to the terms of Article  10,  Tenant  shall  either (a)
restore all alterations and  improvements  made by Tenant and Tenant's  Personal
Property, or (b) replace such alterations and improvements and Tenant's Personal
Property with improvements or items of the same or better quality and utility in
the  operation of such  Property.  If Tenant is not required to restore and does
not, in fact, restore,  Tenant shall pay over to Landlord the amount, if any, of
insurance  proceeds  received by Tenant with respect to any of Tenant's Personal
Property which was purchased with funds from the FF&E Reserve.

         10.6 No Abatement of Rent.  Except as expressly  provided herein,  this
Agreement shall remain in full force and effect and Tenant's  obligation to make
all  payments of Rent and to pay all other  charges as and when  required  under
this Agreement shall remain unabated during the Term  notwithstanding any damage
involving the Leased Property  (provided that Landlord shall credit against such
payments any amounts paid to Landlord as a consequence  of such damage under any
business interruption insurance obtained by Tenant hereunder). The provisions of
this Article 10 shall be considered an express agreement  governing any cause of
damage  or  destruction  to the  Leased  Property  and,  to the  maximum  extent
permitted  by law,  no  local or  State  statute,  laws,  rules,  regulation  or
ordinance in effect during

                                      -54-
<PAGE>

the Term which provide for such a contingency shall have any application in such
case.

         10.7 Waiver.  Tenant hereby waives any statutory  rights of termination
which may arise by reason of any damage or destruction  of the Leased  Property,
or any portion thereof.

                                   ARTICLE 11

                                  CONDEMNATION

         11.1 Total  Condemnation,  Etc. If either (i) the whole of any Property
shall be taken by  Condemnation or (ii) a Condemnation of less than the whole of
any  Property  renders any  Property  Unsuitable  for Its  Permitted  Use,  this
Agreement  shall  terminate with respect to such  Property,  Tenant and Landlord
shall seek the Award for their interests in the applicable  Property as provided
in Section 11.6 and, as the effective  date of taking,  the Minimum Rent payable
hereunder  shall be reduced by such  Property's  allocable  share thereof as set
forth in Exhibit C.

         11.2 Partial Condemnation.  In the event of a Condemnation of less than
the whole of any  Property  such that such  Property is still  suitable  for its
Permitted Use, Tenant shall commence promptly and continue diligently to restore
the untaken  portion of the applicable  Leased  Improvements so that such Leased
Improvements shall constitute a complete  architectural unit of the same general
character and condition (as nearly as may be possible  under the  circumstances)
as such Leased Improvements existing immediately prior to such Condemnation,  in
material  compliance  with all Legal  Requirements,  subject to and unless  this
Agreement is terminated  pursuant to the provisions of this Section 11.2. If the
cost of the repair or restoration of the affected Property exceeds the amount of
the Award,  Tenant shall give  Landlord  Notice  thereof  which notice shall set
forth in  reasonable  detail the nature of such  deficiency  and whether  Tenant
shall pay and assume the amount of such deficiency  (Tenant having no obligation
to do so,  except that if Tenant shall elect to make such funds  available,  the
same  shall  become  an  irrevocable  obligation  of  Tenant  pursuant  to  this
Agreement).  In the event Tenant shall elect not to pay and assume the amount of
such  deficiency,  Landlord  shall  have the  right  (but  not the  obligation),
exercisable  at Landlord's  sole election by Notice to Tenant given within sixty
(60) days after Tenant's  Notice of the  deficiency,  to elect to make available
for  application  to

                                      -55-
<PAGE>

the cost of repair or  restoration  the  amount  of such  deficiency;  provided,
however,  in such event, upon any disbursement by Landlord thereof,  the Minimum
Rent  shall be  adjusted  as  provided  in Section  3.1.1(b).  In the event that
neither  Landlord nor Tenant shall elect to make such  deficiency  available for
restoration, either Landlord or Tenant may terminate this Agreement with respect
to the affected Property and the entire Award shall be allocated as set forth in
Section 11.6.

         Subject to the terms hereof,  Landlord shall  contribute to the cost of
restoration  that  part of the  Award  necessary  to  complete  such  repair  or
restoration,  together with  severance  and other damages  awarded for the taken
Leased Improvements and any other amounts deposited with or payable by Landlord,
to Tenant  regularly  during the restoration  period so as to permit payment for
the cost of such repair or restoration.  Landlord may, at its option,  condition
advancement  of such Award and other  amounts on (i) the absence of any Event of
Default,  (ii)  its  approval  of  plans  and  specifications  of  an  architect
satisfactory to Landlord  (which  approval shall not be  unreasonably  withheld,
delayed or conditioned),  (iii) general contractors' estimates, (iv) architect's
certificates, (v) conditional lien waivers of general contractors, if available,
(vi) evidence of approval by all  governmental  authorities and other regulatory
bodies  whose  approval  is  required,  (vii),  if Tenant has elected to advance
deficiency  funds  pursuant to the preceding  paragraph,  Tenant  depositing the
amount thereof with Landlord and (viii) such other certificates as Landlord may,
from time to time, reasonably require.  Landlord's obligation under this Section
11.2 to disburse  the Award and such other  amounts  shall be subject to (x) the
collection thereof by Landlord and (y) during the last two (2) years of the Term
(including  any exercised  renewals  thereof),  the release of such Award by the
applicable  Hotel  Mortgagee.  If any  Hotel  Mortgagee  shall be  unwilling  to
disburse Award proceeds in accordance with the terms of this  Agreement,  Tenant
shall have the right,  by the giving of Notice  thereof to  Landlord  within ten
(10)  Business  Days after Tenant  learns of such  unwillingness,  to treat such
Property as rendered  Unsuitable  for its  Permitted Use for purposes of Section
11.1. Tenant's obligation to restore the Leased Property shall be subject to the
release of the Award by the applicable  Hotel  Mortgagee to Landlord or directly
to Tenant.

                                      -56-
<PAGE>

         11.3  Abatement of Rent.  Other than as  specifically  provided in this
Agreement,  this  Agreement  shall  remain in full force and effect and Tenant's
obligation to make all payments of Rent and to pay all other charges as and when
required  under  this   Agreement   shall  remain   unabated   during  the  Term
notwithstanding any Condemnation  involving the Leased Property,  or any portion
thereof.  The  provisions  of this  Article  11 shall be  considered  an express
agreement  governing any Condemnation  involving the Leased Property and, to the
maximum  extent  permitted  by law,  no  local  or  State  statute,  law,  rule,
regulation  or  ordinance  in effect  during the Term which  provides for such a
contingency shall have any application in such case.

         11.4 Temporary Condemnation. In the event of any temporary Condemnation
of any Property or Tenant's interest  therein,  this Agreement shall continue in
full force and effect and Tenant shall continue to pay, in the manner and on the
terms herein  specified,  the full amount of the Rent.  Tenant shall continue to
perform and observe all of the other terms and  conditions of this  Agreement on
the part of the  Tenant  to be  performed  and  observed.  Provided  no Event of
Default has occurred and is continuing,  the entire amount of any Award made for
such  temporary  Condemnation  allocable  to the  Term,  whether  paid by way of
damages, rent or otherwise, shall be paid to Tenant. Tenant shall, promptly upon
the termination of any such period of temporary  Condemnation,  at its sole cost
and  expense,  restore  the  Leased  Property  to  the  condition  that  existed
immediately  prior  to  such  Condemnation,  in  material  compliance  with  all
applicable  Legal  Requirements,  unless such period of  temporary  Condemnation
shall extend beyond the  expiration of the Term, in which event Tenant shall not
be required to make such restoration.

         11.5 Condemnation Near End of Term.  Notwithstanding  any provisions of
Sections 11.2 or 11.3 to the contrary,  if  Condemnation  of any Property occurs
during  the last two (2) years of the Term  (including  any  automatic  Extended
Terms) and if restoration cannot reasonably be expected to be completed prior to
the date that is twelve (12) months prior to the end of the Term, the provisions
of Section  11.1 shall apply as if such  Property  had been totally or partially
taken and the Hotel thereon rendered Unsuitable for its Permitted Use.

         11.6  Allocation  of Award.  Except as provided in Section 11.4 and the
second  sentence  of this  Section  11.6,  the total  Award  shall be solely the
property  of and  payable  to  Landlord.

                                      -57-
<PAGE>

Any portion of the Award made for the taking of Tenant's  leasehold  interest in
the Leased  Property,  loss of business  during the  remainder of the Term,  the
taking of Tenant's  Personal  Property  (other than any such property  purchased
with the FF&E Reserve),  the taking of Capital  Additions paid for by Tenant and
Tenant's  removal  and  relocation  expenses  shall be the sole  property of and
payable to Tenant.  In any Condemnation  proceedings,  Landlord and Tenant shall
each seek its own Award in conformity herewith, at its own expense.

                                   ARTICLE 12

                             DEFAULTS AND REMEDIES

         12.1  Events  of  Default.  The  occurrence  of any  one or more of the
following events shall constitute an "Event of Default" hereunder:

                  (a) should  Tenant fail to make any payment of the Rent or any
         other sum (including,  but not limited to, funding of the FF&E Reserve)
         payable hereunder when due; or

                  (b) should  Tenant  fail to  continuously  use and operate any
         Property as an  extended  stay hotel in  accordance  with the terms and
         conditions of Article 4 for (i) thirty (30) or more consecutive days or
         (ii) ninety (90) or more days in any twelve (12) month period; or

                  (c) should  Tenant fail to maintain  the  insurance  coverages
         required  under Article 9 and such failure shall  continue for ten (10)
         Business  Days after  Notice  thereof  (except  that no Notice shall be
         required if any such insurance coverages shall have lapsed); or

                  (d) should Tenant default in the due observance or performance
         of any of the terms,  covenants or  agreements  contained  herein to be
         performed or observed by it (other than as specified in clauses (a) and
         (b) above) and such default shall  continue for a period of thirty (30)
         days after Notice thereof from Landlord to Tenant;  provided,  however,
         that if such  default is  susceptible  of cure but such cure  cannot be
         accomplished  with due diligence  within such period of time and if, in
         addition,  Tenant  commences  to cure or cause to be cured such default
         within  thirty  (30)  days  after  Notice  thereof  from  Landlord  and
         thereafter   prosecutes  the  curing  of  such  default  with  all  due

                                      -58-
<PAGE>

         diligence, such period of time shall be extended to such period of time
         (not to exceed an additional  ninety (90) days in the aggregate) as may
         be necessary to cure such default with all due diligence; or

                  (e)  should  any  obligation  of  Tenant  in  respect  of  any
         Indebtedness  for  money  borrowed  or for  any  material  property  or
         services, or any guaranty relating thereto, be declared to be or become
         due and payable prior to the stated maturity  thereof,  or should there
         occur and be continuing with respect to any such Indebtedness any event
         of default under any instrument or agreement evidencing or securing the
         same,  the  effect of which is to permit  the holder or holders of such
         instrument or agreement or a trustee,  agent or other representative on
         behalf of such holder or holders, to cause such any such obligations to
         become due prior to its stated maturity; or

                  (f) should an event of default by  Candlewood or Tenant or any
         Affiliated  Person as to  Candlewood  or Tenant occur and be continuing
         beyond the  expiration of any  applicable  cure period under any of the
         Incidental  Documents or by the Candlewood Parties (as defined therein)
         under the Purchase Documents,  including,  without limitation, an event
         of default under Section 3.6 of the Guaranty; or

                  (g) should any  material  representation  or warranty  made by
         Tenant or the Candlewood Parties (as defined in the Purchase Documents)
         under or in connection  with this Agreement or any Incidental  Document
         or the Purchase Documents, or in any document, certificate or agreement
         delivered in connection herewith or therewith, prove to have been false
         or misleading  in any material  respect on the date when made or deemed
         made and the same  shall  continue  for five (5)  Business  Days  after
         Notice thereof from Landlord; or

                  (h) should  Tenant  generally  not be paying its debts as they
         become due or should Tenant make a general  assignment  for the benefit
         of creditors; or

                  (i) should any  petition be filed by or against  Tenant  under
         the  Federal  bankruptcy  laws,  or  should  any  other  proceeding  be
         instituted by or against Tenant seeking to adjudicate Tenant a bankrupt
         or  insolvent,  or seeking

                                      -59-
<PAGE>

         liquidation, reorganization,  arrangement, adjustment or composition of
         Tenant's  debts under any law  relating to  bankruptcy,  insolvency  or
         reorganization  or relief of debtors,  or seeking the entry of an order
         for relief or the  appointment  of a receiver,  trustee,  custodian  or
         other similar  official for Tenant or for any  substantial  part of the
         property  of Tenant and such  proceeding  is not  dismissed  within one
         hundred eighty (180) days after institution thereof; or

                  (j) should  Tenant cause or institute any  proceeding  for its
         dissolution or termination; or

                  (k)  should  the  estate or  interest  of Tenant in the Leased
         Property  or any  part  thereof  be  levied  upon  or  attached  in any
         proceeding  and the same shall not be vacated or discharged  within the
         later of (x) ninety (90) days after  commencement  thereof,  unless the
         amount in dispute is less than  $250,000,  in which case  Tenant  shall
         give  notice to  Landlord  of the  dispute but Tenant may defend in any
         suitable  way, and (y) two hundred  seventy (270) days after receipt by
         Tenant  of  Notice  thereof  from  Landlord  (unless  Tenant  shall  be
         contesting  such lien or attachment  in good faith in  accordance  with
         Article 8); or

                  (l)  should  Tenant  at any time  cease to be a wholly  owned,
         direct or indirect, Subsidiary of Candlewood; or

                  (m)  should  there  occur  any  Change in  Control,  except as
         otherwise permitted by Article 16;

then,  and in any such  event,  Landlord,  in  addition  to all  other  remedies
available to it, may terminate  this Agreement with respect to any or all of the
Leased  Property by giving Notice  thereof to Tenant and upon the  expiration of
the time, if any,  fixed in such Notice,  this  Agreement  shall  terminate with
respect to all or the designated  portion of the Leased  Property and all rights
of Tenant under this Agreement with respect thereto shall cease.  Landlord shall
have and may exercise all rights and remedies  available at law and in equity to
Landlord as a result of Tenant's breach of this Agreement.

         Upon the  occurrence of an Event of Default,  Landlord may, in addition
to any other remedies  provided  herein,  enter upon the Leased  Property or any
portion  thereof  and  take  possession  of any  and  all of  Tenant's  Personal
Property, if any, and the

                                      -60-
<PAGE>

Records, without liability for trespass or conversion (Tenant hereby waiving any
right to notice or hearing  prior to such taking of  possession by Landlord) and
sell the same at public or private sale, after giving Tenant  reasonable  Notice
of the time and place of any public or private  sale,  at which sale Landlord or
its assigns may purchase all or any portion of Tenant's  Personal  Property,  if
any, unless otherwise  prohibited by law. Unless  otherwise  provided by law and
without  intending  to  exclude  any other  manner of giving  Tenant  reasonable
notice,  the  requirement  of  reasonable  Notice shall be met if such Notice is
given at least ten (10) days before the date of sale. The proceeds from any such
disposition,  less all  expenses  incurred  in  connection  with the  taking  of
possession,  holding  and  selling  of  such  property  (including,   reasonable
attorneys' fees) shall be applied as a credit against the indebtedness  which is
secured by the security  interest  granted in Section 7.2. Any surplus  shall be
paid to  Tenant  or as  otherwise  required  by law  and  Tenant  shall  pay any
deficiency to Landlord, as Additional Charges, upon demand.

         12.2 Remedies.  None of (a) the termination of this Agreement  pursuant
to Section  12.1,  (b) the  repossession  of the Leased  Property or any portion
thereof,  (c) the  failure of  Landlord  to re-let the  Leased  Property  or any
portion  thereof,  nor (d) the  reletting of all or any of portion of the Leased
Property,  shall relieve Tenant of its liability and obligations hereunder,  all
of which shall survive any such termination,  repossession or re-letting. In the
event of any such  termination,  Tenant shall forthwith pay to Landlord all Rent
due and payable with respect to the Leased  Property  through and  including the
date of such termination.  Thereafter,  Tenant, until the end of what would have
been the Term of this Agreement in the absence of such termination,  and whether
or not the Leased Property or any portion thereof shall have been re-let,  shall
be liable to Landlord for, and shall pay to Landlord,  as current  damages,  the
Rent  (Additional  Rent  to  be  reasonably  calculated  by  Landlord  based  on
historical Total Hotel Sales) and other charges which would be payable hereunder
for the remainder of the Term had such  termination  not occurred,  less the net
proceeds, if any, of any re-letting of the Leased Property,  after deducting all
reasonable  expenses  in  connection  with such  reletting,  including,  without
limitation,  all  repossession  costs,  brokerage  commissions,  legal expenses,
attorneys'  fees,  advertising,  expenses  of  employees,  alteration  costs and
expenses  of  preparation  for such  reletting.  Tenant

                                      -61-
<PAGE>

shall pay such  current  damages  to  Landlord  monthly on the days on which the
Minimum Rent would have been payable hereunder if this Agreement had not been so
terminated with respect to such of the Leased Property.

         At any time after such termination,  whether or not Landlord shall have
collected any such current damages,  as liquidated final damages beyond the date
of such  termination,  at Landlord's  election,  Tenant shall pay to Landlord an
amount  equal to the present  value  (discounted  at the  Interest  Rate) of the
excess,  if any, of the Rent and other charges which would be payable  hereunder
from the date of such  termination  (assuming  that,  for the  purposes  of this
paragraph,  annual  payments by Tenant on account of Impositions  and Additional
Rent would be the same as payments required for the immediately preceding twelve
calendar  months,  or if less than twelve calendar months have expired since the
Commencement  Date, the payments required for such lesser period projected to an
annual  amount) for what would be the then  unexpired  term of this Agreement if
the same  remained in effect,  over the fair market  rental for the same period.
Nothing contained in this Agreement shall, however, limit or prejudice the right
of Landlord to prove and obtain in  proceedings  for bankruptcy or insolvency an
amount  equal to the maximum  allowed by any statute or rule of law in effect at
the time when,  and governing the  proceedings  in which,  the damages are to be
proved,  whether or not the amount be greater  than,  equal to, or less than the
amount of the loss or damages referred to above.

         In case of any Event of Default, re-entry, expiration and dispossession
by summary proceedings or otherwise,  Landlord may (a) relet the Leased Property
or any part or parts thereof, either in the name of Landlord or otherwise, for a
term or terms which may at Landlord's  option,  be equal to, less than or exceed
the period which would  otherwise have  constituted  the balance of the Term and
may  grant  concessions  or free  rent to the  extent  that  Landlord  considers
advisable  and  necessary  to relet the same,  and (b) may make such  reasonable
alterations,  repairs  and  decorations  in the Leased  Property  or any portion
thereof as Landlord,  in its sole and absolute  discretion,  considers advisable
and necessary for the purpose of reletting the Leased  Property;  and the making
of such  alterations,  repairs and decorations shall not operate or be construed
to release  Tenant from  liability  hereunder as aforesaid.  Subject to the last
sentence of this  paragraph and as long as Landlord uses

                                      -62-
<PAGE>

reasonable  efforts to  mitigate  its  damages  as  provided  in such  sentence,
Landlord  shall in no event be liable in any way  whatsoever  for any failure to
relet all or any  portion  of the  Leased  Property,  or, in the event  that the
Leased Property is relet,  for failure to collect the rent under such reletting.
To the maximum extent  permitted by law, Tenant hereby  expressly waives any and
all rights of  redemption  granted under any present or future laws in the event
of Tenant being evicted or dispossessed,  or in the event of Landlord  obtaining
possession of the Leased Property,  by reason of the occurrence and continuation
of an Event of Default hereunder. Landlord covenants and agrees, in the event of
any  termination  of this  Agreement as a result of an Event of Default,  to use
reasonable efforts to mitigate its damages.

         12.3  Tenant's  Waiver.  IF THIS  AGREEMENT IS  TERMINATED  PURSUANT TO
SECTION 12.1 OR 12.2,  TENANT WAIVES,  TO THE EXTENT PERMITTED BY LAW, ANY RIGHT
TO A TRIAL BY JURY IN THE EVENT OF SUMMARY  PROCEEDINGS  TO ENFORCE THE REMEDIES
SET FORTH IN THIS  ARTICLE 12, AND THE BENEFIT OF ANY LAWS NOW OR  HEREAFTER  IN
FORCE EXEMPTING PROPERTY FROM LIABILITY FOR RENT OR FOR DEBT.

         12.4 Application of Funds. Any payments  received by Landlord under any
of the provisions of this  Agreement  during the existence or continuance of any
Event of Default (and any payment made to Landlord rather than Tenant due to the
existence of any Event of Default) shall be applied to Tenant's current and past
due obligations  under this Agreement in such order as Landlord may determine or
as may be  prescribed  by the laws of the State.  Any  balance  shall be paid to
Tenant.

         12.5 Landlord's Right to Cure Tenant's Default.  If an Event of Default
shall have occurred and be continuing,  Landlord,  after Notice to Tenant (which
Notice shall not be required if Landlord shall  reasonably  determine  immediate
action is necessary to protect person or property), without waiving or releasing
any obligation of Tenant and without  waiving or releasing any Event of Default,
may (but shall not be obligated to), at any time  thereafter,  make such payment
or perform  such act for the account  and at the expense of Tenant,  and may, to
the  maximum  extent  permitted  by law,  enter upon the Leased  Property or any
portion  thereof  for such  purpose  and take all such  action  thereon  as,  in
Landlord's  sole  and  absolute  discretion,  may be  necessary  or  appropriate
therefor.  No such entry shall be deemed an eviction of Tenant.  All  reasonable
costs and expenses (including,  without limitation,  reasonable

                                      -63-
<PAGE>

attorneys'  fees)  incurred by Landlord in connection  therewith,  together with
interest  thereon (to the extent  permitted by law) at the Overdue Rate from the
date such sums are paid by  Landlord  until  repaid,  shall be paid by Tenant to
Landlord, on demand.

                                   ARTICLE 13

                                  HOLDING OVER

         Any holding over by Tenant after the  expiration or sooner  termination
of this  Agreement  shall be treated as a daily  tenancy at sufferance at a rate
equal to two (2)  times  the  Minimum  Rent and other  charges  herein  provided
(prorated  on a daily  basis).  Tenant  shall also pay to  Landlord  all damages
(direct or indirect)  sustained by reason of any such holding  over.  Otherwise,
such  holding  over  shall be on the  terms  and  conditions  set  forth in this
Agreement,  to the extent applicable.  Nothing contained herein shall constitute
the consent, express or implied, of Landlord to the holding over of Tenant after
the expiration or earlier termination of this Agreement.

                                   ARTICLE 14

                LANDLORD'S NOTICE OBLIGATIONS; LANDLORD DEFAULT

         14.1  Landlord  Notice  Obligation.  Notwithstanding  anything  to  the
contrary  contained  herein,  Landlord shall give prompt Notice to Tenant of any
matters  affecting the Leased Property of which Landlord receives written notice
or actual  knowledge and, to the extent Tenant otherwise has no notice or actual
knowledge thereof, Landlord shall be liable for any liabilities arising from the
failure to deliver such Notice to Tenant.

         14.2 Landlord's  Default.  If Landlord shall default in the performance
or observance of any of its covenants or obligations set forth in this Agreement
or any obligation of Landlord,  if any, under any agreement affecting the Leased
Property,  the performance of which is not Tenant's  obligation pursuant to this
Agreement, and any such default shall continue for a period of five (5) Business
Days after  Notice  thereof  with  respect to monetary  defaults and twenty (20)
Business Days after Notice  thereof with respect to  non-monetary  defaults from
Tenant to Landlord and any applicable Hotel Mortgagee, or such additional period
as may be  reasonably  required  to  correct  the  same,  provided  Landlord  is
proceeding  with due  diligence  to correct

                                      -64-
<PAGE>

the same, Tenant may declare the occurrence of a "Landlord  Default" by a second
Notice to Landlord and to such Hotel Mortgagee. Thereafter, Tenant may forthwith
cure the same and, subject to the provisions of the following paragraph, invoice
Landlord for costs and expenses (including  reasonable attorneys' fees and court
costs) incurred by Tenant in curing the same, together with interest thereon (to
the extent  permitted by law) from the date Landlord  receives  Tenant's invoice
until paid, at the Overdue Rate,  and/or offset such amounts against  Additional
Rent due and payable  hereunder;  provided,  however,  that,  from and after the
bankruptcy  of  Landlord,  Tenant may offset such amounts  against  Minimum Rent
and/or  Additional  Rent  payable  hereunder.  Tenant  shall  have no  right  to
terminate this Agreement for any default by Landlord hereunder and no right, for
any such default,  to offset or  counterclaim  against any Rent or other charges
due hereunder, as set forth in the preceding sentence.

         If Landlord  shall in good faith dispute the occurrence of any Landlord
Default and Landlord, before the expiration of the applicable cure period, shall
give Notice thereof to Tenant,  setting forth, in reasonable  detail,  the basis
therefor,  no Landlord  Default  shall be deemed to have  occurred  and Landlord
shall have no obligation with respect thereto until final adverse  determination
thereof; provided, however, that in the event of any such adverse determination,
Landlord  shall pay to Tenant  interest on any  disputed  funds at the  Interest
Rate,  from the date demand for such funds was made by Tenant  until the date of
final adverse determination and, thereafter,  at the Overdue Rate until paid. If
Tenant and  Landlord  shall  fail,  in good faith,  to resolve any such  dispute
within ten (10) days after Landlord's  Notice of dispute,  either may submit the
matter for resolution to a court of competent jurisdiction.

         14.3  Indemnification of Tenant.  Notwithstanding  the existence of any
insurance  provided  for herein and without  regard to the policy  limits of any
such insurance,  Landlord shall protect, indemnify and hold harmless Tenant for,
from and against  all  liabilities,  obligations,  claims,  damages,  penalties,
causes of action, costs and reasonable expenses (including,  without limitation,
reasonable  attorneys'  fees), to the maximum extent  permitted by law,  imposed
upon or  incurred  by or  asserted  against  Tenant by reason of the  following,
except to the  extent  caused by  Tenant's  negligence,  willful  misconduct  or
Default:  (a) any  Impositions  that  are the  obligations  of

                                      -65-
<PAGE>

Landlord to pay pursuant to the applicable provisions of this Agreement, and (b)
any failure on the part of Landlord or anyone claiming under Landlord to perform
or comply with any of the terms of this  Agreement.  Landlord,  at its  expense,
shall contest,  resist and defend any such claim,  action or proceeding asserted
or instituted  against Tenant (and shall not be responsible  for any duplicative
attorneys'  fees incurred by Tenant) or may  compromise or otherwise  dispose of
the  same,  with  Tenant's  prior  written  consent  (which  consent  may not be
unreasonably  withheld,  delayed or  conditioned).  The  obligations of Landlord
under this Section 14.3 shall survive termination of this Agreement.

                                   ARTICLE 15

                                PURCHASE RIGHTS

         Landlord shall have the option to purchase Tenant's Personal  Property,
at the expiration or termination of this  Agreement,  for an amount equal to the
then net  market  value  thereof  (current  replacement  cost as  determined  by
agreement  of the  parties  or, in the  absence of such  agreement,  appraisal),
subject to, and with appropriate  price  adjustments for, all equipment  leases,
conditional sale contracts, UCC-1 financing statements and other encumbrances to
which such Personal Property is subject (except that any such property purchased
with the FF&E Reserve  shall be  transferred  to Landlord as provided in Section
5.1.2(e)).  Upon the expiration or sooner termination of this Agreement,  Tenant
shall use its  reasonable  efforts to  transfer  and assign to  Landlord  or its
designee,  or assist  Landlord or its  designee  in  obtaining,  any  contracts,
licenses,  and  certificates  required  for the  then  operation  of the  Leased
Property.

                                   ARTICLE 16

                           SUBLETTING AND ASSIGNMENT

         16.1  Subletting  and  Assignment.  Except as provided in Section 16.3,
Tenant shall not, without Landlord's prior written consent (which consent may be
given or withheld in Landlord's sole and absolute discretion), assign, mortgage,
pledge,  hypothecate,  encumber or otherwise transfer this Agreement or sublease
(which term shall be deemed to include the granting of concessions, licenses and
the like but  shall  not be  deemed  to  include  the  lodging  of hotel  guests
consistent  with the

                                      -66-
<PAGE>

Permitted  Use), all or any part of the Leased Property or suffer or permit this
Agreement or the leasehold  estate  created  hereby or any other rights  arising
under  this  Agreement  to  be  assigned,   transferred,   mortgaged,   pledged,
hypothecated  or  encumbered,   in  whole  or  in  part,  whether   voluntarily,
involuntarily  or by  operation  of law, or permit the use or  operation  of the
Leased  Property  by anyone  other than  Tenant,  or the Leased  Property  to be
offered or advertised for assignment or subletting;  provided,  however, that an
assignment to a wholly owned subsidiary (direct or indirect) of Candlewood shall
be permitted without the consent of, but upon Notice to, Landlord.  For purposes
of this  Section  16.1,  an  assignment  of this  Agreement  shall be  deemed to
include, without limitation,  any direct or indirect Change in Control of Tenant
or Candlewood.

         If this  Agreement  is assigned  or if the Leased  Property or any part
thereof  are  sublet  (or  occupied  by  anybody  other  than  Tenant  and their
respective  employees or hotel guests)  Landlord may collect the rents from such
assignee,  subtenant or  occupant,  as the case may be, and apply the net amount
collected to the Rent herein reserved,  but no such collection shall be deemed a
waiver of the provisions set forth in the first  paragraph of this Section 16.1,
the acceptance by Landlord of such assignee,  subtenant or occupant, as the case
may be, as a tenant,  or a release  of Tenant  from the  future  performance  by
Tenant of its covenants, agreements or obligations contained in this Agreement.

         No  subletting  or  assignment  shall in any way impair the  continuing
primary  liability of Tenant  hereunder  (unless  Landlord and Tenant  expressly
otherwise agree that Tenant shall be released from all  obligations  hereunder),
and no consent to any subletting or assignment in a particular instance shall be
deemed to be a waiver of the  prohibition  set forth in this  Section  16.1.  No
assignment,  subletting  or  occupancy  shall  affect  any  Permitted  Use.  Any
subletting,  assignment  or other  transfer  of  Tenant's  interest  under  this
Agreement in  contravention of this Section 16.1 shall be voidable at Landlord's
option.

         16.2 Required Sublease  Provisions.  Any sublease of all or any portion
of the Leased  Property  entered into on or after the date hereof shall  provide
(a) that it is subject and  subordinate  to this Agreement and to the matters to
which this  Agreement  is or shall be subject  or  subordinate;  (b) that in the
event of termination of this Agreement or reentry or  dispossession of

                                      -67-
<PAGE>

Tenant by Landlord under this Agreement,  Landlord may, at its option, terminate
such  sublease or take over all of the right,  title and interest of Tenant,  as
sublessor under such sublease,  and such subtenant shall, at Landlord's  option,
attorn to Landlord  pursuant to the then executory  provisions of such sublease,
except that neither Landlord nor any Hotel Mortgagee, as holder of a mortgage or
as Landlord under this Agreement,  if such mortgagee  succeeds to that position,
shall (i) be liable for any act or omission of Tenant under such sublease,  (ii)
be subject to any  credit,  counterclaim,  offset or defense  which  theretofore
accrued  to such  subtenant  against  Tenant,  (iii) be  bound  by any  previous
modification  of such sublease not consented to in writing by Landlord or by any
previous  prepayment  of more than one (1)  month's  rent,  (iv) be bound by any
covenant of Tenant to  undertake  or  complete  any  construction  of the Leased
Property or any  portion  thereof,  (v) be required to account for any  Retained
Funds of the  subtenant  other than any  Retained  Funds  actually  delivered to
Landlord by Tenant,  (vi) be bound by any obligation to make any payment to such
subtenant or grant any credits,  except for services,  repairs,  maintenance and
restoration provided for under the sublease that are performed after the date of
such  attornment,  (vii) be  responsible  for any monies  owing by Tenant to the
credit of such subtenant  unless  actually  delivered to Landlord by Tenant,  or
(viii) be  required  to remove any Person  occupying  any  portion of the Leased
Property;  and (c), in the event that such  subtenant  receives a written Notice
from  Landlord  or any Hotel  Mortgagee  stating  that an Event of  Default  has
occurred and is continuing,  such subtenant shall thereafter be obligated to pay
all rentals  accruing  under such  sublease  directly  to the party  giving such
Notice or as such party may direct.  All rentals received from such subtenant by
Landlord or the Hotel  Mortgagee,  as the case may be, shall be credited against
the amounts owing by Tenant under this Agreement and such sublease shall provide
that the  subtenant  thereunder  shall,  at the request of  Landlord,  execute a
suitable  instrument in  confirmation  of such agreement to attorn.  An original
counterpart of each such sublease and assignment and  assumption,  duly executed
by  Tenant  and such  subtenant  or  assignee,  as the case may be,  in form and
substance  reasonably  satisfactory to Landlord,  shall be delivered promptly to
Landlord  and (a) in the case of an  assignment,  the  assignee  shall assume in
writing and agree to keep and perform all of the terms of this  Agreement on the
part of Tenant to be kept and  performed  and shall be, and become,  jointly and
severally  liable  with  Tenant for the  performance  thereof and (b) in case of

                                      -68-
<PAGE>

either an assignment or subletting,  Tenant shall remain  primarily  liable,  as
principal rather than as surety,  for the prompt payment of the Rent and for the
performance  and  observance  of all  of  the  covenants  and  conditions  to be
performed by Tenant hereunder.

         The provisions of this Section 16.2 shall not be deemed a waiver of the
provisions set forth in the first paragraph of Section 16.1.

         16.3  Permitted  Sublease  Notwithstanding  the  foregoing,  including,
without limitation,  Section 16.2, but subject to the provisions of Section 16.4
and any other express conditions or limitations set forth herein, Tenant may, in
each  instance  after  Notice to  Landlord,  sublease  space at any Property for
newsstand,  car rental agency,  business  services  office,  gift shop,  parking
garage, health club, restaurant, bar or commissary purposes or other concessions
in furtherance of the Permitted Use, so long as such subleases do not demise, in
the aggregate, in excess of two thousand (2,000) square feet per Property or, in
the case of a restaurant or bar, four thousand (4,000) square feet per Property,
will not violate or affect any Legal Requirement or Insurance  Requirement,  and
Tenant shall  provide  such  additional  insurance  coverage  applicable  to the
activities  to be  conducted in such  subleased  space as Landlord and any Hotel
Mortgagee may reasonably require.

         16.4  Sublease  Limitation.  For so long as Landlord or any  Affiliated
Person as to Landlord shall seek to qualify as a real estate  investment  trust,
anything  contained in this  Agreement to the contrary  notwithstanding,  Tenant
shall not  sublet the  Leased  Property  on any basis such that the rental to be
paid by any sublessee thereunder would be based, in whole or in part, on the net
income or profits  derived by the business  activities  of such  sublessee,  any
other  formula  such that any  portion  of such  sublease  rental  would fail to
qualify as "rents from real  property"  within the meaning of Section  856(d) of
the Code,  or any  similar or  successor  provision  thereto or would  otherwise
disqualify Landlord for treatment as a real estate investment trust.

                                      -69-
<PAGE>
                                   ARTICLE 17

                 ESTOPPEL CERTIFICATES AND FINANCIAL STATEMENTS

         17.1 Estoppel Certificates.  At any time and from time to time, but not
more than a  reasonable  amount  of times per year,  upon not less than ten (10)
Business  Days prior Notice by either  party,  the party  receiving  such Notice
shall  furnish  to the  other an  Officer's  Certificate  certifying  that  this
Agreement is unmodified  and in full force and effect (or that this Agreement is
in full force and effect as modified and setting forth the  modifications),  the
date to which the Rent has been paid, that no Default or an Event of Default has
occurred and is continuing  or, if a Default or an Event of Default shall exist,
specifying in reasonable detail the nature thereof, and the steps being taken to
remedy the same, and such  additional  information  as the requesting  party may
reasonably request. Any such certificate furnished pursuant to this Section 17.1
may be relied upon by the  requesting  party,  its  lenders and any  prospective
purchaser or mortgagee of the Leased  Property or the leasehold  estate  created
hereby.

         17.2 Financial Statements.  Tenant shall furnish or cause Candlewood to
furnish, as applicable, the following statements to Landlord:

                  (a) within  forty-five (45) days after each of the first three
         fiscal  quarters  of any  Fiscal  Year,  the most  recent  Consolidated
         Financials, accompanied by the Financial Officer's Certificate;

                  (b) within ninety (90) days after the end of each Fiscal Year,
         the most recent  Consolidated  Financials  and financials of Tenant for
         such year,  certified by an  independent  certified  public  accountant
         reasonably  satisfactory  to Landlord  and  accompanied  by a Financial
         Officer's Certificate;

                  (c) within  forty-five  (45) days after the end of each month,
         an unaudited operating statement and statement of capital  expenditures
         prepared  on a Hotel by Hotel  basis and a  combined  basis,  including
         occupancy  percentages  and average  rate,  accompanied  by a Financial
         Officer's Certificate;

                                      -70-
<PAGE>

                  (d) at any  time  and from  time to time  upon  not less  than
         twenty (20) days Notice from Landlord or such additional  period as may
         be reasonable under the  circumstances,  any  Consolidated  Financials,
         Tenant financials or any other audited or unaudited financial reporting
         information  required to be filed by Landlord with any  securities  and
         exchange  commission,  the SEC or any  successor  agency,  or any other
         governmental authority, or required pursuant to any order issued by any
         court,  governmental authority or arbitrator in any litigation to which
         Landlord is a party,  for purposes of compliance  therewith;  provided,
         however,  that,  except as to  calculations  pertaining  to Total Hotel
         Sales,  Tenant shall not be required to provide audited financials with
         respect to individual Hotels unless Landlord shall agree to pay for the
         cost thereof; and

                  (e)   promptly,   upon  Notice  from   Landlord,   such  other
         information concerning the business, financial condition and affairs of
         Tenant and  Candlewood as Landlord  reasonably may request from time to
         time.

         Landlord  may at any  time,  and from time to time,  provide  any Hotel
Mortgagee  with copies of any of the foregoing  statements,  subject to Landlord
obtaining the agreement of such Hotel  Mortgagee to maintain such statements and
the information therein as confidential.

                                   ARTICLE 18

                          LANDLORD'S RIGHT TO INSPECT

         Tenant shall  permit  Landlord and its  authorized  representatives  to
inspect  the Leased  Property  during  usual  business  hours upon not less than
forty-eight (48) hours' notice and to make such repairs as Landlord is permitted
or required to make pursuant to the terms of this  Agreement,  provided that any
inspection or repair by Landlord or its  representatives  will not  unreasonably
interfere  with  Tenant's use and  operation of the Leased  Property and further
provided  that in the event of an  emergency,  as  determined by Landlord in its
reasonable discretion, prior Notice shall not be necessary.

                                   ARTICLE 19

                                   EASEMENTS

                                      -71-
<PAGE>

         19.1 Grant of Easements.  Provided no Event of Default has occurred and
is  continuing,  Landlord will join in granting and, if necessary,  modifying or
abandoning  such  rights-of-way,   easements  and  other  interests  as  may  be
reasonably requested by Tenant for ingress and egress, and electric,  telephone,
gas, water, sewer and other utilities so long as:

                  (a) the instrument creating,  modifying or abandoning any such
         easement,  right-of-way  or  other  interest  is  satisfactory  to  and
         approved  by  Landlord   (which  approval  shall  not  be  unreasonably
         withheld, delayed or conditioned); and

                  (b)  Landlord  receives an Officer's  Certificate  from Tenant
         stating  (i)  that  such  grant,  modification  or  abandonment  is not
         detrimental to the proper  conduct of business on such  Property,  (ii)
         the consideration,  if any, being paid for such grant,  modification or
         abandonment (which  consideration shall be paid by Tenant),  (iii) that
         such  grant,  modification  or  abandonment  does not impair the use or
         value of such  Property for the  Permitted  Use, and (iv) that,  for as
         long as this  Agreement  shall be in effect,  Tenant  will  perform all
         obligations, if any, of Landlord under any such instrument.

         19.2  Exercise of Rights by Tenant.  So long as no Event of Default has
occurred and is  continuing,  Tenant shall have the right to exercise all rights
of Landlord under the Easement Agreements and, in connection therewith, Landlord
shall  execute and  promptly  return to Tenant such  documents  as Tenant  shall
reasonably  request.  Tenant shall perform all obligations of Landlord under the
Easement Agreements.

         19.3 Permitted Encumbrances.  Any agreements entered into in accordance
with Section 19.1 shall be deemed a Permitted Encumbrance.

                                   ARTICLE 20

                                HOTEL MORTGAGES

         20.1 Landlord May Grant Liens. Without the consent of Tenant,  Landlord
may,  subject to the terms and conditions  set forth in this Section 20.1,  from
time to time,  directly or  indirectly,  create or otherwise  cause to exist any
lien,  encumbrance or title retention agreement  ("Encumbrance") upon

                                      -72-
<PAGE>

the Leased  Property,  or any portion  thereof or interest  therein,  whether to
secure any borrowing or other means of financing or refinancing. Notwithstanding
anything to the contrary set forth in Section 20.2, any such  Encumbrance  shall
include the right to prepay (whether or not subject to a prepayment penalty) and
shall  provide  (subject  to  Section  20.2) that it is subject to the rights of
Tenant under this Agreement.

         20.2  Subordination of Lease.  Subject to Section 20.1 and this Section
20.2, this Agreement and any and all rights of Tenant  hereunder,  are and shall
be subject and  subordinate  to any ground or master  lease,  and all  renewals,
extensions,  modifications  and replacements  thereof,  and to all mortgages and
deeds of trust,  which may now or  hereafter  affect the Leased  Property or any
improvements thereon and/or any of such leases, whether or not such mortgages or
deeds of trust shall also cover other lands and/or buildings  and/or leases,  to
each and every  advance made or hereafter  to be made under such  mortgages  and
deeds of trust, and to all renewals, modifications,  replacements and extensions
of such leases and such mortgages and deeds of trust and all  consolidations  of
such mortgages and deeds of trust. This section shall be  self-operative  and no
further  instrument of subordination  shall be required provided that Tenant has
received a nondisturbance and attornment  agreement from each Superior Mortgagee
(as defined  below),  consistent  with the  provisions  of this Section 20.2 and
otherwise  in  form  and  substance   reasonably   satisfactory  to  Tenant.  In
confirmation of such subordination,  Tenant shall promptly execute,  acknowledge
and deliver any instrument that Landlord, the lessor under any such lease or the
holder of any such mortgage or the trustee or  beneficiary  of any deed of trust
or any of their  respective  successors  in interest may  reasonably  request to
evidence such  subordination.  Any lease to which this Agreement is, at the time
referred to, subject and subordinate is herein called  "Superior  Lease" and the
lessor of a Superior  Lease or its successor in interest at the time referred to
is herein called "Superior  Landlord" and any mortgage or deed of trust to which
this  Agreement is, at the time referred to,  subject and  subordinate is herein
called "Superior Mortgage" and the holder,  trustee or beneficiary of a Superior
Mortgage is herein called "Superior Mortgagee".

         If any  Superior  Landlord  or  Superior  Mortgagee  or the  nominee or
designee of any Superior  Landlord or Superior  Mortgagee  shall  succeed to the
rights of Landlord under this

                                      -73-
<PAGE>

Agreement (any such person, "Successor Landlord"), whether through possession or
foreclosure  action or  delivery  of a new  lease or deed,  or  otherwise,  such
Successor  Landlord  shall  recognize  Tenant's  rights under this  Agreement as
herein provided and Tenant shall attorn to and recognize the Successor  Landlord
as Tenant's  landlord under this Agreement and Tenant shall promptly execute and
deliver any instrument  that such Successor  Landlord may reasonably  request to
evidence such attornment (provided that such instrument does not alter the terms
of this Agreement),  whereupon,  this Agreement shall continue in full force and
effect as a direct lease between the  Successor  Landlord and Tenant upon all of
the terms,  conditions and covenants as are set forth in this Agreement,  except
that the Successor  Landlord  (unless formerly the landlord under this Agreement
or its nominee or designee) shall not be (a) liable in any way to Tenant for any
act or omission, neglect or default on the part of any prior Landlord under this
Agreement,  (b) responsible for any monies owing by or on deposit with any prior
Landlord  to the  credit  of  Tenant  (except  to the  extent  actually  paid or
delivered to the Successor Landlord),  (c) subject to any counterclaim or setoff
which theretofore accrued to Tenant against any prior Landlord, (d) bound by any
modification of this Agreement subsequent to such Superior Lease or Mortgage, or
by any previous prepayment of Rent for more than one (1) month in advance of the
date due hereunder,  which was not approved in writing by the Superior  Landlord
or the Superior  Mortgagee  thereto,  (e) liable to Tenant  beyond the Successor
Landlord's  interest in the Leased  Property  and the rents,  income,  receipts,
revenues,  issues and profits issuing from the Leased Property,  (f) responsible
for the  performance of any work to be done by the Landlord under this Agreement
to render the Leased Property ready for occupancy by Tenant,  or (g) required to
remove any Person  occupying the Leased Property or any part thereof,  except if
such person claims by, through or under the Successor Landlord. Tenant agrees at
any time and from time to time to execute a suitable  instrument in confirmation
of Tenant's  agreement to attorn,  as aforesaid  and Landlord  agrees to provide
Tenant  with an  instrument  of  nondisturbance  and  attornment  from each such
Superior  Mortgagee  and  Superior  Landlord  in form and  substance  reasonably
satisfactory  to Tenant.  Nothing  contained in this Section 20.2 shall  relieve
Landlord  from any  liability  to Tenant  under  this  Agreement  following  the
exercise of remedies by a Superior Mortgagee.

                                      -74-
<PAGE>

         20.3 Notice to  Mortgagee  and  Superior  Landlord.  Subsequent  to the
receipt  by Tenant of  Notice  from  Landlord  as to the  identity  of any Hotel
Mortgagee or Superior  Landlord under a lease with  Landlord,  as ground lessee,
which  includes  the Leased  Property as part of the demised  premises and which
complies with Section 20.1 and 20.2 (which Notice shall be accompanied by a copy
of the applicable  mortgage or lease), no Notice from Tenant to Landlord as to a
default by Landlord  under this  Agreement  shall be effective with respect to a
Hotel  Mortgagee  or  Superior  Landlord  unless and until a copy of the same is
given to such Hotel  Mortgagee or Superior  Landlord at the address set forth in
the above described Notice, and the curing of any of Landlord's  defaults within
the  applicable  notice and cure periods set forth in Section 14.2 by such Hotel
Mortgagee or Superior Landlord shall be treated as performance by Landlord.

                                   ARTICLE 21

                         ADDITIONAL COVENANTS OF TENANT

         21.1 Prompt Payment of  Indebtedness.  Tenant shall (a) pay or cause to
be paid when due all  payments  of  principal  of and  premium  and  interest on
Tenant's Indebtedness for money borrowed and shall not permit or suffer any such
Indebtedness to become or remain in default beyond any applicable  grace or cure
period,  (b) pay or cause to be paid when due all  lawful  claims  for labor and
rents with respect to the Leased Property,  (c) pay or cause to be paid when due
all  trade  payables  and (d) pay or  cause  to be paid  when  due all  other of
Tenant's  Indebtedness  upon which it is or becomes  obligated,  except, in each
case,  other than that referred to in clause (a), to the extent payment is being
contested in good faith by appropriate  proceedings in accordance with Article 8
and if Tenant shall have set aside on its books  adequate  reserves with respect
thereto  in  accordance  with  GAAP,  if   appropriate,   or  unless  and  until
foreclosure,  distraint  sale or  other  similar  proceedings  shall  have  been
commenced.

         21.2 Conduct of Business. Tenant shall not engage in any business other
than the leasing and operation of the Leased Property  (including any incidental
or  ancillary  business  relating  thereto) and shall do or cause to be done all
things  necessary  to  preserve,  renew and keep in full force and effect and in
good standing its corporate  existence and its rights and licenses  necessary to
conduct such business.

                                      -75-
<PAGE>

         21.3  Maintenance  of  Accounts  and  Records.  Tenant  shall keep true
records and books of account of Tenant in which full,  true and correct  entries
will be made of  dealings  and  transactions  in relation  to the  business  and
affairs  of Tenant in  accordance  with  GAAP.  Tenant  shall  apply  accounting
principles in the  preparation of the financial  statements of Tenant which,  in
the judgment of and the opinion of its independent  public  accountants,  are in
accordance  with GAAP,  where  applicable,  except for changes  approved by such
independent  public  accountants.  Tenant shall provide to Landlord  either in a
footnote to the financial  statements  delivered under Section 17.2 which relate
to the period in which such  change  occurs,  or in separate  schedules  to such
financial  statements,  information  sufficient  to show the  effect of any such
changes on such financial statements.

         21.4 Notice of  Litigation,  Etc.  Tenant  shall give prompt  Notice to
Landlord of any  litigation  or any  administrative  proceeding  to which it may
hereafter  become a party of which Tenant has notice or actual  knowledge  which
involves a  potential  liability  equal to or  greater  than Two  Hundred  Fifty
Thousand  Dollars  ($250,000)  or which may  otherwise  result  in any  material
adverse  change in the business,  operations,  property,  prospects,  results of
operation or condition,  financial or other,  of Tenant.  Forthwith  upon Tenant
obtaining knowledge of any Default,  Event of Default or any default or event of
default under any agreement  relating to  Indebtedness  for money borrowed in an
aggregate amount exceeding,  at any one time, Two Hundred Fifty Thousand Dollars
($250,000),  or any event or condition that would be required to be disclosed in
a current report filed by Tenant on Form 8-K or in Part II of a quarterly report
on Form 10-Q if Tenant were required to file such reports  under the  Securities
Exchange  Act of 1934,  as  amended,  Tenant  shall  furnish  Notice  thereof to
Landlord  specifying the nature and period of existence  thereof and what action
Tenant has taken or is taking or proposes to take with respect thereto.

         21.5 Notice of Discontinuance of Operation. Tenant shall give immediate
Notice to  Landlord  if Tenant  shall fail to  continuously  use and operate any
Property as an extended stay hotel in accordance  with the terms and  conditions
of Article 4 and such failure  shall  continue (i) for fifteen (15)  consecutive
days or (ii) for sixty (60) days in any twelve (12) month period.

                                      -76-
<PAGE>

         21.6 Indebtedness of Tenant.  Tenant shall not create, incur, assume or
guarantee, or permit to exist, or become or remain liable directly or indirectly
upon, any Indebtedness except the following:

                  (a) Indebtedness of Tenant to Landlord;

                  (b) Indebtedness of Tenant for Impositions, to the extent that
         payment  thereof  shall  not at the  time  be  required  to be  made in
         accordance with the provisions of Article 8;

                  (c)  Indebtedness  of Tenant in respect of judgments or awards
         (i) which have been in force for less than the applicable appeal period
         and in  respect  of which  execution  thereof  shall  have been  stayed
         pending  such  appeal or  review,  or (ii)  which are fully  covered by
         insurance  payable to Tenant,  or (iii)  which are for an amount not in
         excess of $250,000 in the aggregate at any one time outstanding and (x)
         which  have been in force for not  longer  than the  applicable  appeal
         period, so long as execution is not levied thereunder or (y) in respect
         of which an  appeal  or  proceedings  for  review  shall at the time be
         prosecuted in good faith in accordance  with the  provisions of Article
         8, and in respect of which  execution  thereof  shall have been  stayed
         pending such appeal or review;

                  (d) unsecured borrowings of Tenant from its Affiliated Persons
         which  are  by  their  terms  expressly   subordinate   pursuant  to  a
         Subordination  Agreement  to the  payment and  performance  of Tenant's
         obligations under this Agreement; or

                  (e)  Indebtedness  for purchase money  financing in accordance
         with Section 21.10(a) and other operating  liabilities  incurred in the
         ordinary course of Tenant's business.

         21.7 Financial Condition of Tenant.  Tenant shall at all times maintain
Net Worth (except as provided in the last clause of this  sentence) in an amount
at least equal to the aggregate of one year's  Minimum Rent payable  pursuant to
this  Agreement;  it being  expressly  understood  and agreed  that the right to
receive the  Retained  Funds,  if assigned  to Tenant,  may for such  purpose be
counted  as  equity at the full  amount  thereof  and that

                                      -77-
<PAGE>

accrued  and  unpaid  subordinated  amounts  due from  Tenant to its  Affiliated
Persons may be included in Net Worth.

         21.8 Distributions,  Payments to Affiliated Persons,  Etc. Tenant shall
not declare,  order, pay or make,  directly or indirectly,  any Distributions or
any  payment  to any  Affiliated  Person of Tenant  (including  payments  in the
ordinary course of business and payments pursuant to Management  Agreements with
any such Affiliated Person) or set apart any sum or property therefor,  or agree
to do so, if, at the time of such proposed action,  or immediately  after giving
effect  thereto,  any Event of Default  shall have  occurred and be  continuing.
Otherwise, as long as no Event of Default shall have occurred and be continuing,
Tenant may make  Distributions  and payments to Affiliated  Persons  (other than
from the FF&E  Reserve  which  shall  be  governed  by  Section  5.1.2)  without
restriction.

         21.9 Prohibited Transactions. Tenant shall not permit to exist or enter
into any agreement or  arrangement  whereby it engages in a  transaction  of any
kind with any  Affiliated  Person as to Tenant,  except on terms and  conditions
which are commercially reasonable.

         21.10 Liens and  Encumbrances.  Except as  permitted by Section 7.1 and
Section  21.6,  Tenant  shall not  create or incur or  suffer to be  created  or
incurred  or to exist  any Lien on this  Agreement  or any of  Tenant's  assets,
properties, rights or income, or any of its interest therein, now or at any time
hereafter owned, other than:

                  (a)  Security   interests   securing  the  purchase  price  of
         equipment or personal  property  whether  acquired  before or after the
         Commencement Date; provided,  however,  that (i) such Lien shall at all
         times  be  confined  solely  to the  asset  in  question  and  (ii) the
         aggregate  principal  amount of  Indebtedness  secured by any such Lien
         shall  not  exceed  the  cost of  acquisition  or  construction  of the
         property subject thereto;

                  (b) Permitted Encumbrances; and

                  (c) As permitted pursuant to Section 21.6.

         21.11 Assets and Personal  Property.  Without  Landlord's prior written
consent (which consent may be given or withheld in Landlord's sole  discretion),
Tenant  shall not (i)  lease  (as

                                      -78-
<PAGE>

lessor or sublessor),  transfer, convey or otherwise dispose of, or abandon, all
or a  majority  of its  assets or (ii)  sell,  lease (as  lessor or  sublessor),
transfer or otherwise dispose of, or abandon,  any personal property or fixtures
or any real property; provided, however, that, notwithstanding the provisions of
clause (ii)  preceding,  Tenant may dispose of equipment or fixtures  which have
become inadequate,  obsolete, worn-out, unsuitable,  undesirable or unnecessary,
provided  substitute  equipment or fixtures  having  equal or greater  value and
utility (but not necessarily having the same function) have been provided.

                                   ARTICLE 22

                                 MISCELLANEOUS

         22.1 Limitation on Payment of Rent. All agreements between Landlord and
Tenant herein are hereby  expressly  limited so that in no  contingency or event
whatsoever,  whether by reason of acceleration of Rent, or otherwise,  shall the
Rent or any other amounts  payable to Landlord under this  Agreement  exceed the
maximum  permissible  under applicable law, the benefit of which may be asserted
by Tenant as a defense, and if, from any circumstance whatsoever, fulfillment of
any provision of this Agreement, at the time performance of such provision shall
be due, shall involve  transcending the limit of validity  prescribed by law, or
if from any  circumstances  Landlord  should ever receive as fulfillment of such
provision such an excessive amount,  then, ipso facto, the amount which would be
excessive  shall be applied to the  reduction of the  installment(s)  of Minimum
Rent next due and not to the payment of such  excessive  amount.  This provision
shall control every other  provision of this Agreement and any other  agreements
between Landlord and Tenant.

         22.2 No Waiver.  No failure by  Landlord  or Tenant to insist  upon the
strict  performance of any term hereof or to exercise any right, power or remedy
consequent upon a breach  thereof,  and no acceptance of full or partial payment
of Rent during the continuance of any such breach,  shall constitute a waiver of
any such breach or of any such term. To the maximum extent  permitted by law, no
waiver of any breach shall affect or alter this Agreement,  which shall continue
in full force and effect with respect to any other then  existing or  subsequent
breach.

                                      -79-
<PAGE>

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

         22.4  Severability.   Any  clause,  sentence,   paragraph,  section  or
provision  of this  Agreement  held by a court of competent  jurisdiction  to be
invalid,  illegal or  ineffective  shall not impair,  invalidate  or nullify the
remainder of this Agreement,  but rather the effect thereof shall be confined to
the clause,  sentence,  paragraph,  section or  provision so held to be invalid,
illegal  or  ineffective,  and  this  Agreement  shall be  construed  as if such
invalid, illegal or ineffective provisions had never been contained therein.

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

         22.6 No Merger of Title. It is expressly  acknowledged  and agreed that
it is the intent of the parties that there shall be no merger of this  Agreement
or of the leasehold  estate  created  hereby by reason of the fact that the same
Person may acquire,  own or hold,  directly or indirectly  this Agreement or the
leasehold estate created hereby and the fee estate or ground landlord's interest
in the Leased Property.

         22.7 Conveyance by Landlord.  If Landlord or any successor owner of all
or any  portion of the Leased  Property  shall  convey all or any portion of the
Leased Property in accordance with the terms hereof other than as security for a
debt,  and the  grantee  or  transferee  of such of the  Leased  Property  shall
expressly assume all obligations of Landlord  hereunder arising or accruing from
and after the date of such  conveyance or transfer,  Landlord or such  successor
owner,  as the  case  may be,  shall  thereupon  be  released  from  all  future
liabilities  and  obligations  of Landlord

                                      -80-
<PAGE>

under this  Agreement  with  respect to such of the Leased  Property  arising or
accruing from and after the date of such  conveyance  or other  transfer and all
such future  liabilities and obligations shall thereupon be binding upon the new
owner;  provided,  however,  that Landlord  shall not be released from liability
with  respect  to any  Retained  Funds  transferred  in  connection  with such a
conveyance unless such successor shall have a Net Worth equal to or greater than
the lesser of (i) ten (10) times the amount of the Retained Funds so transferred
or (ii) One Hundred Million Dollars ($100,000,000).  If such successor shall not
satisfy the aforesaid Net Worth  requirement,  Landlord  shall, in a guaranty in
form and substance  reasonably  satisfactory to Tenant,  guaranty payment of the
amount of the Retained Funds so  transferred  in accordance  with this Agreement
and the Purchase Documents.

         22.8 Quiet Enjoyment. Tenant shall peaceably and quietly have, hold and
enjoy the Leased  Property for the Term,  free of hindrance  or  molestation  by
Landlord or anyone  claiming by, through or under  Landlord,  but subject to (a)
any Encumbrance  permitted under Article 20 or otherwise permitted to be created
by Landlord  hereunder  provided that the holder of such Encumbrance has, to the
extent appropriate, executed a nondisturbance agreement pursuant to Section 20.2
or a  subordination  agreement in form and  substance  reasonably  acceptable to
Tenant, (b) all Permitted Encumbrances,  (c) liens as to obligations of Landlord
that are  either not yet due or which are being  contested  in good faith and by
proper proceedings,  provided the same do not materially interfere with Tenant's
ability to operate  the  Hotels  and (d) liens  that have been  consented  to in
writing by Tenant. Except as otherwise provided in this Agreement, no failure by
Landlord to comply with the  foregoing  covenant  shall give Tenant any right to
cancel or terminate this Agreement or abate,  reduce or make a deduction from or
offset against the Rent or any other sum payable under this Agreement (except as
expressly  provided in Section 14.2), or to fail to perform any other obligation
of Tenant hereunder.

         22.9 Memorandum of Lease. Neither Landlord nor Tenant shall record this
Agreement.  However, Landlord and Tenant shall promptly, upon the request of the
other,  enter into a short form memorandum of this  Agreement,  in form suitable
for recording  under the laws of the State in which reference to this Agreement,
and all options contained herein,  shall be made.

                                      -81-
<PAGE>

Tenant shall pay all costs and expenses of recording such memorandum.

         22.10 Notices.

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

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

                  (c) All such notices shall be addressed,

         if to Landlord:

                    c/o Hospitality Properties Trust
                    400 Centre Street
                    Newton, Massachusetts  02458
                    Attn:  Mr. John G. Murray
                    [Telecopier No. (617) 969-5730]

         with a copy to:

                    Sullivan & Worcester LLP
                    One Post Office Square
                    Boston, Massachusetts  02109
                    Attn:  Nancy S. Grodberg, Esq.
                    [Telecopier No. (617) 338-2880]

                                      -82-
<PAGE>

         if to Tenant to:

                    Candlewood Leasing Number 1, Inc.
                    8621 E. 21st Street North, Suite 200
                    Wichita, Kansas  67206
                    Attn:  Mr. Tim Johnson
                    [Telecopier No. (316) 631-1382]

         with a copy to:

                    Latham & Watkins
                    233 South Wacker Drive, Suite 5800
                    Chicago, Illinois 60606
                    Attn:  Kenneth Crews, Esq.
                    [Telecopier No. (312) 993-9767]

                  (d) By notice given as herein provided, the parties hereto and
         their respective  successors and assigns shall have the right from time
         to time and at any time  during  the term of this  Agreement  to change
         their respective  addresses effective upon receipt by the other parties
         of such  notice and each shall have the right to specify as its address
         any other address within the United States of America.

         22.11  Trade  Area  Restriction.  With  respect  to the HPT CW I Leased
Property and the New Leased  Property,  neither  Tenant,  Candlewood  nor any of
their Affiliated Persons shall own, build, franchise,  manage or operate a hotel
of the same brand as the Hotels within the designated  areas on Exhibit B-1 (the
"Designated Areas One"), at any time during the Term.

         With respect to the HPT CW II Leased Property and the Additional Leased
Property,  during the period  expiring on the Burn-Off Date (as defined  below),
none of Tenant,  Candlewood or any of their Affiliated Persons shall own, build,
franchise,  manage or operate a hotel of the same brand as the Hotels within the
designated areas on Exhibit B-2 (the "Designated Areas Two").

         Notwithstanding  the foregoing,  after the Burn-Off  Date,  provided no
Default or Event of Default shall have occurred and be continuing, Candlewood or
any  Affiliated  Persons of  Candlewood  may own,  build,  franchise,  manage or
operate a hotel of the same brand as the Hotels  within a  Designated  Area Two,
provided that Candlewood shall give Landlord prior written notice thereof, which
notice  shall  set  forth  in  reasonable

                                      -83-
<PAGE>

detail the location and aggregate  acquisition  costs of the proposed hotel (the
"Proposed  Hotel")  and  address  such other  matters  with  respect  thereto as
Landlord may reasonably  request.  Landlord or its Affiliated Persons shall have
the right, by notice given,  within forty-five (45) days after Landlord receives
all  requested  information  with  respect to the  Proposed  Hotel,  to elect to
acquire the Proposed Hotel on terms substantially  similar to those set forth in
the  Purchase  Agreement  and to lease the same to Tenant or another  Affiliated
Person of Candlewood on terms  substantially  similar to those set forth in this
Agreement  (and, if Landlord shall so elect,  this Agreement shall be amended to
include the Proposed Hotel among the properties demised hereunder).  If Landlord
or any of its  Affiliated  Persons  shall fail to give such  notice of  election
prior to the  expiration of such 45-day  period and,  provided the Burn-Off Date
shall have  occurred and no Default or Event of Default  shall have occurred and
be continuing, Candlewood or its Affiliated Persons may build, franchise, manage
or operate the Proposed Hotel on substantially  the same terms and conditions as
set forth in the information with respect thereto provided to Landlord.

         For purposes of this Section  22.11,  the Burn-Off  Date shall mean the
later to occur of (i) with  respect to a  Property,  the date which is the fifth
anniversary  of the  Commencement  Date of such Property and (ii) the date as of
which (x)  Candlewood  has one hundred (100) or more hotels of the same brand as
the Hotels under  management or (y) Cash Flow (as defined below) on a cumulative
basis for a period  of twelve  (12) full  consecutive  Accounting  Periods  with
respect to the Hotel in which Designated Area Two the Proposed Hotel is situated
equals  or  exceeds  Minimum  Rent by one  hundred  percent  (100%) or more with
respect to such period,  and Landlord  shall receive a schedule  evidencing  the
foregoing, in form and substance reasonably satisfactory to Landlord prepared by
a,  so-called,  "Big-Five"  accounting  firm  or  such  other  certified  public
accountants as are approved by Landlord  (such  approval not to be  unreasonably
withheld, delayed or conditioned).

         As used herein,  "Cash Flow" shall mean the net income  before  federal
and state income tax (or loss) of Tenant in connection with the operation of the
applicable Hotel,  calculated in accordance with GAAP for the applicable period,
adjusted by adding back (a) all  extraordinary  expense items,  (b) depreciation
and  amortization,  (c) interest  expense on

                                      -84-
<PAGE>

Indebtedness  permitted  under this  Agreement,  (d) Minimum Rent and Additional
Rent, (e) base management  fees,  incentive  management  fees,  trade name fees,
franchise fees,  royalty fees and central  marketing fees paid to the Manager to
the extent  subordinate  to payment of rent pursuant to this  Agreement from and
after the occurrence of an Event of Default,  and further  adjusted by deducting
(f) required  contributions to the FF&E Reserve and (g) all extraordinary income
items.

         22.12  Construction.  Anything  contained  in  this  Agreement  to  the
contrary  notwithstanding,  all claims  against,  and  liabilities of, Tenant or
Landlord  arising  prior  to any  date  of  termination  or  expiration  of this
Agreement with respect to the Leased Property shall survive such  termination or
expiration.  In no event shall Landlord be liable for any consequential  damages
suffered  by Tenant as the  result of a breach of this  Agreement  by  Landlord.
Neither  this  Agreement  nor  any  provision  hereof  may be  changed,  waived,
discharged or terminated  except by an instrument in writing signed by the party
to be charged.  All the terms and provisions of this Agreement  shall be binding
upon and  inure to the  benefit  of the  parties  hereto  and  their  respective
successors and assigns. Each term or provision of this Agreement to be performed
by Tenant shall be construed as an independent  covenant and condition.  Time is
of the essence  with  respect to the  provisions  of this  Agreement.  Except as
otherwise set forth in this  Agreement,  any  obligations  of Tenant  (including
without limitation,  any monetary,  repair and indemnification  obligations) and
Landlord shall survive the expiration or sooner termination of this Agreement.

         22.13 Counterparts;  Headings. This Agreement may be executed in two or
more counterparts,  each of which shall constitute an original,  but which, when
taken together,  shall  constitute but one instrument and shall become effective
as of the date hereof when copies hereof,  which, when taken together,  bear the
signatures  of each of the parties  hereto shall have been  signed.  Headings in
this  Agreement are for purposes of reference only and shall not limit or affect
the meaning of the provisions hereof.

         22.14  Applicable  Law,  Etc.  This  Agreement  shall  be  interpreted,
construed,  applied and enforced in accordance with the laws of The Commonwealth
of  Massachusetts  applicable to contracts  between  residents of  Massachusetts
which are to be performed entirely within Massachusetts, regardless of (i) where
this  Agreement  is  executed or  delivered;  or (ii) where any

                                      -85-
<PAGE>

payment or other  performance  required by this Agreement is made or required to
be made; or (iii) where any breach of any provision of this Agreement occurs, or
any  cause of  action  otherwise  accrues;  or (iv)  where  any  action or other
proceeding  is  instituted  or  pending;  or (v) the  nationality,  citizenship,
domicile,  principal  place of business,  or  jurisdiction  of  organization  or
domestication  of any party; or (vi) whether the laws of the forum  jurisdiction
otherwise would apply the laws of a jurisdiction  other than  Massachusetts;  or
(vii) any combination of the foregoing.  Notwithstanding the foregoing, the laws
of the State shall apply to the  perfection  and  priority of liens upon and the
disposition of any Property.

         To the  maximum  extent  permitted  by  applicable  law,  any action to
enforce,  arising out of, or relating  in any way to, any of the  provisions  of
this  Agreement may be brought and prosecuted in such court or courts located in
The Commonwealth of Massachusetts as is provided by law; and the parties consent
to the  jurisdiction  of said court or courts  located in  Massachusetts  and to
service of process by registered mail, return receipt requested, or by any other
manner provided by law.

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

         22.16  Attorneys'  Fees. If any lawsuit or  arbitration  or other legal
proceeding  arises in connection with the  interpretation or enforcement of this
Agreement,  the  prevailing  party therein shall be entitled to receive from the
other party the  prevailing  party's  costs and expenses,  including  reasonable
attorneys' fees incurred in connection therewith, in preparation

                                      -86-
<PAGE>

therefor  and on  appeal  therefrom,  which  amounts  shall be  included  in any
judgment therein.

         22.17  Nonrecourse.  Nothing  contained  in  this  Agreement  shall  be
construed to impose any  liabilities or  obligations  on Tenant's  shareholders,
officers,  directors,  agents  or  employees  (or  any  shareholders,  officers,
directors,  agents or employees of any of the foregoing) for the  performance of
the obligations of Landlord or Tenant hereunder.

         22.18  Nonliability of Trustees.  THE DECLARATION OF TRUST ESTABLISHING
LANDLORD,   A  COPY  OF  WHICH,   TOGETHER  WITH  ALL  AMENDMENTS  THERETO  (THE
"DECLARATION"), IS DULY FILED WITH THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF
THE STATE OF MARYLAND,  PROVIDES THAT THE NAME "HPT CW PROPERTIES  TRUST" REFERS
TO THE  TRUSTEES  UNDER  THE  DECLARATION  COLLECTIVELY  AS  TRUSTEES,  BUT  NOT
INDIVIDUALLY OR PERSONALLY, AND THAT NO TRUSTEE, OFFICER, SHAREHOLDER,  EMPLOYEE
OR AGENT  OF  LANDLORD  SHALL  BE HELD TO ANY  PERSONAL  LIABILITY,  JOINTLY  OR
SEVERALLY,  FOR ANY  OBLIGATION  OF, OR CLAIM  AGAINST,  LANDLORD.  ALL  PERSONS
DEALING WITH LANDLORD, IN ANY WAY, SHALL LOOK ONLY TO THE ASSETS OF LANDLORD FOR
THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

         23.19 Amendment and Restatement.  This Agreement  amends,  restates and
replaces in its entirety  that certain  Amended and  Restated  Lease  Agreement,
dated as of August  10,  2001,  as the same may have been  amended  from time to
time, by and between Landlord and Tenant.

                                      -87-
<PAGE>

         IN WITNESS  WHEREOF,  the parties  have  executed  this  Agreement as a
sealed instrument as of the date above first written.

                                     LANDLORD:

                                     HPT CW PROPERTIES TRUST, a
                                     Maryland real estate investment
                                     trust

                                     By: /s/ John G. Murray
                                         John G. Murray
                                         President

                                     TENANT:

                                     CANDLEWOOD LEASING NO. 1, INC., a
                                     Delaware corporation

                                     By: /s/ Tim Johnson
                                         Its: Vice President Treasurer

Candlewood Hotel Company, Inc. hereby acknowledges and agrees to be bound by the
provisions of Section 22.11 of the foregoing  Second  Amended and Restated Lease
Agreement.

                                     CANDLEWOOD HOTEL COMPANY, INC.,
                                     a Delaware corporation

                                     By: /s/ Tim Johnson
                                         Its: Vice President Treasurer

                                     Date: April 12, 2002

<PAGE>

                                OMITTED EXHIBITS

The following exhibits to the Second Amended and Restated Master Lease have been
omitted:

Exhibit Letter                              Exhibit Title
A-1 through A-56                            The Land
B-1                                         Designated Areas One
B-2                                         Designated Areas Two
C                                           Allocable Rents

The Registrant agrees to furnish  supplementally a copy of the foregoing omitted
exhibits to the Securities and Exchange Commission upon request.

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