Document:

EXHIBIT 10.1

                              TERMINATION AGREEMENT

         Termination Agreement (this "Agreement") dated October 27, 2003 among
HPT CW Properties Trust ("HPT CW"), John G. Murray, Trustee of HPT CW MA Realty
Trust ("HPT CW MA"), HH HPTCW II Properties LLC ("HPTCW II" and collectively
with HPT CW and HPT CW MA, the "Landlord"), Hospitality Properties Trust ("HPT"
and together with Landlord, the "Guaranteed Parties"), Candlewood Hotel Company,
Inc. ("Guarantor") and Candlewood Leasing No. 1, Inc. ("Tenant").

                                    RECITALS

         Pursuant to an Agreement to Lease dated as of November 19, 1997, HPT CW
and Tenant entered into a Second Amended and Restated Lease Agreement dated as
of April 12, 2002, as amended by a First Amendment to Second Amended and
Restated Lease Agreement dated as of July 21, 2003, between the Landlord and the
Tenant (as amended, the "Second Amended Lease") with respect to the real
property, related improvements and personal property described therein.
Capitalized terms not defined in this Agreement shall have the meanings given
therefor in the Second Amended Lease.

         As a condition precedent to Landlord entering into the Second Amended
Lease, the Guarantor guaranteed all payment and performance obligations of the
Tenant with respect to the Second Amended Lease to the Guaranteed Parties
pursuant to a Third Amended and Restated Guaranty Agreement dated July 21, 2003
(the "Guaranty").

         Guarantor desires to be relieved of its obligations under the Guaranty,
which the Guaranteed Parties are willing to do on the terms and conditions set
forth in this Agreement.

         Contemporaneously with the execution of this Agreement, Guarantor and
certain of its Subsidiaries and HPT are entering into that certain Purchase and
Sale Agreement (the "HPT Purchase Agreement") and Six Continents Hotels, Inc.
("SCH"), Guarantor and Candlewood Hotel Company, L.L.C. are entering into an
Asset Purchase Agreement (the "SCH Purchase Agreement").

         NOW, THEREFORE, it is agreed:

         1. Termination of the Guaranty. The Guaranteed Parties hereby
acknowledge termination of the Guaranty at 11:59 pm on the Effective Date
(hereafter defined) and release the Guarantor from any and all of its
obligations set forth therein arising thereafter; provided the conditions set
forth in Section 6 below are satisfied and further provided Guarantor's
obligations under the proviso in Section 10 of the Guaranty shall not be
terminated with respect to and Guarantor shall remain liable to the Guaranteed
Parties thereunder with respect to, payments made prior to 11:59 pm on the
Effective Date.

         2. Termination of the Second Amended Lease. Landlord and Tenant hereby
agree that the term of the Second Amended Lease shall terminate at 11:59 pm on
the Effective Date provided the conditions set forth in Section 6 below are
satisfied and further provided the consideration described in Section 4, below,
is paid.

         3. Surrender of Leased Property and Tenant's Personal Property. Tenant
agrees that, on the Effective Date, Tenant shall surrender the Leased Property
to the
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Landlord in substantially the same condition as the Leased Property is in
on the date of this Agreement except as repaired, rebuilt, restored, altered or
added to as permitted or required by the Second Amended Lease, reasonable wear
and tear excepted (and casualty damage and Condemnation excepted if the Second
Amended Lease is terminated following such casualty or Condemnation as provided
therein). Upon the occurrence of the Effective Date and the satisfaction of the
conditions in Section 6 below, Tenant shall be conclusively deemed to have
satisfied its obligations under the immediately preceding sentence and under
Section 5.3 of the Second Amended Lease, and Landlord shall have no right to
bring any claim for monetary damages or other relief against Tenant or Guarantor
for any alleged violation of any such obligations. For purposes of Articles 10
and 11 of the Second Amended Lease, any casualty, destruction or Condemnation of
the Leased Property after the date of this Agreement and prior to the Effective
Date shall be treated as if it had occurred during the last two (2) years of the
Term. In addition, Tenant acknowledges that, in accordance with the terms of
Section 5.2 of the Second Amended Lease, all of Tenant's Personal Property shall
become the property of Landlord on the Effective Date, and, in connection
therewith, Tenant agrees to execute and deliver a bill of sale in substantially
the form attached as Exhibit A, conveying Tenant's Personal Property to Landlord
or its designee as of the Effective Date.

         4. Consideration to Landlord. In consideration for Landlord's execution
and performance of this Agreement, Tenant hereby agrees that on the Effective
Date Tenant shall cause the FF&E Reserves to be paid to Landlord by wire
transfer and that Landlord may retain the Retained Funds less $2,500,000, which
amount shall be released by Landlord to Tenant and paid by wire transfer on the
Effective Date.

         5. Termination of Security Agreements and Certain Prior Agreements.
Provided the conditions set forth in Section 6 below are satisfied, on the
Effective Date, without further action by Landlord, Tenant or Guarantor: (a) the
Stock Pledge Agreement, (b) the Security Agreement, (c) the FF&E Pledge and (d)
those agreements listed in Exhibit B (collectively the "Prior Agreements") shall
be terminated without recourse to Tenant or Guarantor, and Landlord shall return
the certificate evidencing the stock of Tenant to Guarantor.

         6. Compliance with Second Amended Lease. It is a condition to this
Agreement becoming effective that on the Effective Date, no Event of Default
arising from the failure to pay Rent or any other sum due under the Second
Amended Lease shall exist.

         7. Timing of Rent Payments. Anything contained in the Second Amended
Lease to the contrary notwithstanding, Landlord and Tenant hereby agree that
payments of Minimum Rent and Additional Rent, if any, due pursuant to the Second
Amended Lease for each of the November, 2003, December, 2003 and January, 2004
Accounting Periods shall be paid on the 15th day of such Accounting Period.
Notwithstanding the foregoing, if payment of Rent for any such Accounting Period
is not made as provided in this Section 7, then such non-payment shall
constitute an Event of Default under the Second Amended Lease.

         8. Assets and Trade Payables; Impositions.

              (a) From and after the Effective Date, Landlord or its designee
shall be solely responsible for collecting all current assets ("Current Assets")
and for paying all current trade payables which are disclosed to Landlord
pursuant to the good faith estimate

                                      -2-
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and/or the Final Calculation which Tenant is required to prepare in accordance
this Section 8 ("Current Trade Payables") that arose in connection with Tenant's
(or its affiliates) operation of the Leased Property prior to the Effective
Date. On or before the date that is ten (10) days prior to the Effective Date,
Tenant shall provide Landlord with a good faith estimate of what the total
Current Assets and Current Trade Payables will be on the Closing Date. Such
estimate shall be provided to Landlord for information purposes only. Within
thirty (30) days after the Effective Date, Tenant shall provide Landlord with a
calculation of the actual amount of the Current Assets and the Current Trade
Payables as of the Effective Date (the "Final Calculation"). The Final
Calculation shall be made on an accrual basis in accordance with GAAP and shall
provide for reasonable allowances for uncollectible Current Assets in accordance
with GAAP. Landlord shall have five (5) Business Days after its receipt of the
Final Calculation to approve or reject the same. If Landlord does not approve or
reject the Final Calculation within such five (5) Business Day period, Landlord
shall be deemed to have approved the Final Calculation. Within three (3)
Business Days after Landlord's approval of the Final Calculation, (i) if the
amount of the Current Assets determined therein exceeds the amount of the
Current Trade Payables determined therein, then Landlord or its designee shall
pay such excess amount to Tenant in immediately available funds and (ii) if the
amount of the Current Trade Payables determined therein exceeds the amount of
the Current Assets determined therein, then Guarantor and Tenant shall pay such
excess amount to Landlord or its designee in immediately available funds. Such
payment shall be a final settlement of the Current Assets and the Current Trade
Payables. If Landlord and Tenant are not able to reach agreement on the Final
Calculation within five (5) Business Days after Landlord's rejection of the
same, then a certified public accountant reasonably acceptable to the parties
hereto shall determine any portion of the Final Calculation that shall not
theretofore have been agreed to by the parties hereto. The charges for such
accountant shall be borne equally by the parties to such disputed amount. Tenant
and Guarantor hereby acknowledge and agree that nothing contained in this
Section 8 shall construed so as to relieve Tenant of any of its obligations to
make any payments required to be made by it under the Lease, including, without
limitation, any Minimum Rent, Additional Rent or Additional Charges (except to
the extent that such Additional Charges constitute Current Trade Payables).

              (b) On the Effective Date, a fair and reasonable estimated
accounting of all Impositions with respect to the Leased Property shall be
performed and agreed to by Landlord and Tenant. All Impositions imposed upon the
Leased Property for all periods prior to and including the Effective Date shall
be for the account of Tenant and all Impositions imposed upon the Leased
Property for all periods after the Effective Date shall be for the account of
Landlord. All adjustments to be made as a result of such accounting shall be
paid to the party entitled thereto in immediately available funds on the
Effective Date. All Impositions for which current bills are not available as of
the Closing Date or the date of the Final Calculation, if applicable, including,
without limitation, real estate and personal property taxes, shall be
apportioned based on 100% of the most recent actual bill available.
Notwithstanding anything contained herein to the contrary, the Impositions with
respect to each Leased Property shall be calculated and allocated in accordance
with the local custom and practice for such Leased Property as determined by
Chicago Title Insurance Company.

         9. Representations.

              (a) Each of Guarantor and Tenant, jointly and severally, represent
and warranty to the Guaranteed Parties that:

                                      -3-
<PAGE>

                  (i) to their knowledge, there is no Event of Default or
         Default by either the Landlord or Tenant under the Second Amended
         Lease; and

                  (ii) the execution and delivery of this Agreement, the HPT
         Purchase Agreement and the SCH Purchase Agreement and the transactions
         contemplated hereby and thereby were duly approved by the boards of
         directors of Guarantor and the Guarantor's Subsidiaries party thereto
         at meetings duly held on October 26, 2003.

              (b) The Guaranteed Parties, jointly and severally represent and
warrant to the Guarantor and Tenant that to their knowledge, there is no Event
of Default or Default by either the Landlord or Tenant under the Second Amended
Lease.

         10. Release. On the Effective Date and provided the conditions set
forth in Section 6 above have been satisfied, the Guaranteed Parties hereby
waive, release, and discharge to the fullest extent permitted by law any and all
claims, causes of action, demands, suits, costs, expenses and damages existing
on or before 11:59 pm on the Effective Date in any way related to or connected
with Tenant or Guarantor or their respective affiliates that the Guaranteed
Parties may have, of whatsoever nature and kind whether arising at law or at
equity (whether based in contract, tort, or any other theory) against Tenant,
Guarantor or their respective affiliates and their respective shareholders,
officers, directors, members, employees, agents, attorneys or other
representatives based in whole or in part on the Second Amended Lease, the
Guaranty, the Stock Pledge Agreement, the Security Agreement, the FF&E Pledge,
the Prior Agreements and/or any other document executed and delivered in
connection therewith or on facts known or knowable to the Guaranteed Parties on
the Effective Date, provided nothing in this Section 10 shall release or
discharge Guarantor from its obligations to the Guaranteed Parties under the
proviso in Section 10 of the Guaranty as set forth in Section 1 above or
otherwise under this Agreement.

         11. Effective Date. The term "Effective Date" shall mean the date on
which all conditions for closing under each of the HPT Purchase Agreement and
the SCH Purchase Agreement shall have been satisfied and the closings under each
have occurred.

         12. Cooperation; Access. To facilitate Landlord's acceptance of
Tenant's surrender of the Leased Property, following the date of this Agreement
upon reasonable notice, Guarantor will and will cause Tenant to permit the
Guaranteed Parties and their respective representatives to inspect, during
Guarantor's normal business hours, the Leased Property, to examine the books,
records and other information of Guarantor and Tenant related to the Leased
Property, and to consult with the employees of Guarantor and Tenant at such
reasonable times as the Guaranteed Parties and or their respective
representatives may reasonably request by notice to Guarantor (which notice may
be oral). Guarantor agrees to provide to the Guaranteed Parties with such
information, from time to time, as the Guaranteed Parties may reasonably
request, (a) regarding the Leased Properties and the condition and operation
thereof, (b) relating to the values of the Fixtures and Leased Personal Property
and (c) required to determine results of operations of the Leased Property
through the Effective Date. In addition, promptly upon HPT's request and at
HPT's sole cost and expense, such audited and unaudited financial and other
information and certifications required by HPT in connection with its reporting
obligations under the Securities Exchange Act of 1934, and if required or
requested, to permit HPT to incorporate any information included in filings made
by Guarantor with the Securities

                                      -4-
<PAGE>

Exchange Commission. The Guaranteed Parties shall indemnify, defend and hold
harmless Guarantor and Tenant from and against any and all expense, loss or
damage which they incur as a result of any act or omission of the Guaranteed
Parties or their respective representatives in connection with such inspection
and examination, other than to the extent that any expense, loss or damage
arises from any negligence or misconduct of Guarantor or Tenant.

         13. Termination. This Agreement may be terminated, and the transactions
contemplated hereby may be abandoned, at any time prior to the Effective Date,
by action taken or authorized by the Board of Directors of the terminating party
or parties, whether before or after Stockholder Approval:

              (a) by mutual written consent of HPT and Guarantor;

              (b) by either HPT or Guarantor if the Transactions shall not have
been consummated prior to February 28, 2004 (the "Outside Date"); provided
however that the right to terminate this Agreement under this Section 13 (b)
shall not be available to any party whose failure to fulfill any obligation
under this Agreement has been the cause of, or resulted in, the failure of the
Transactions to occur on or before the Outside Date;

              (c) by either HPT or Guarantor if "Stockholder Approval" (as
defined in the HPT Purchase Agreement) is not obtained by reason of the failure
to obtain the required vote at a duly held meeting of Guarantor's stockholders
or at any adjournment thereof;

              (d) by either HPT or Guarantor if either the HPT Purchase
Agreement or the SCH Purchase Agreement has been terminated; or

              (e) by HPT if the conditions set forth in Section 6 are not
satisfied on the Effective Date.

         14. Effect of Termination. In the event of termination of this
Agreement by either HPT or Guarantor as provided in Section 13, this Agreement
shall forthwith become void and there shall be no liability or obligation on the
part of HPT or Guarantor or their respective Subsidiaries, officers or directors
except with respect to any liabilities or damages incurred or suffered by a
party as a result of the willful and material breach by the other party of any
of its covenants or other agreements set forth in this Agreement and except as
otherwise provided in the HPT Purchase Agreement.

         15. Governing Law. 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 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.

                                      -5-
<PAGE>

         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.

         EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE
UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF OR RELATING TO THIS AGREEMENT AND ANY OF THE AGREEMENTS DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH
PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY
OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER
PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE EITHER OF SUCH
WAIVERS, (B) IT UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF SUCH WAIVERS,
(C) IT MAKES SUCH WAIVERS VOLUNTARILY, AND (D) IT HAS BEEN INDUCED TO ENTER INTO
THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 15.

         16. Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but such counterparts, when taken
together, shall constitute one agreement.

         17. Binding Effect. This Agreement shall inure to the benefit of, and
shall be binding upon, the parties hereto and their respective legal
representatives, successors and assigns.

         18. Further Assurances. The parties hereby agree to execute such
further documents or instruments as may be necessary or appropriate to carry out
the intention of this Agreement, including, without limitation, on the Effective
Date and provided the conditions set forth in Section 6 above have been
satisfied, upon request of Guarantor, HPT will deliver a certificate confirming
the termination of the Guaranty, the Second Amended Lease, the Stock Pledge
Agreement, the FF&E Pledge and the Prior Agreements, and that the release in
Section 10 above has become effective, all in accordance with the terms of this
Agreement.

         19. Entire Agreement; Waiver. This Agreement contains the entire
agreement between the parties hereto and shall be binding upon and inure to the
benefit of their respective heirs, representatives, successors and permitted
assigns. Any agreement hereinafter made shall be ineffective to change, modify,
waive, release, discharge, terminate or effect an abandonment hereto, in whole
or in part, unless such agreement is in writing and signed by the parties
hereto.

         20. Interpretation. The parties have participated jointly in the
negotiation and drafting of this Agreement. If an ambiguity or question of
intent or interpretation arises, this Agreement shall be construed as if drafted
jointly by the parties, and no presumption or

                                      -6-
<PAGE>

burden of proof shall arise favoring or disfavoring a party by virtue of the
authorship of any provision of this Agreement.

         21. Public Announcements. The timing and content of all announcements
regarding any aspect of this Agreement to the financial community, government
agencies, employees or the public generally shall be mutually agreed upon in
advance, unless HPT, or Guarantor is advised by counsel that any such
announcement or other disclosure not mutually agreed upon in advance is required
to be made by law, by New York Stock Exchange rule or by American Stock Exchange
rule, or Nasdaq National Market rule, in which case to the extent practicable,
the party making the announcement or disclosure will consult with the other
party and use reasonable efforts to agree on the nature, extent and form of the
announcement or disclosure. Notwithstanding anything to the contrary contained
in this Agreement, the parties (and each employee, representative, or other
agent of the parties) may disclose to any and all persons, without limitation of
any kind, the tax treatment and tax structure of the transaction, and all
materials of any kind (including opinions or other tax analyses) that are
provided to the taxpayer relating to such tax treatment and tax structure.

         22. Declaration of Trust of HPT. The Declaration of Trust of HPT, a
copy of which is duly filed with the Department of Assessments and Taxation of
the State of Maryland, provides that the name "Hospitality Properties Trust"
refers to the trustees under such Declaration of Trust collectively as trustees,
but not individually or personally, and that no trustee, officer, stockholder,
employee or agent of HPT shall be held to any personal liability, jointly or
severally, for any obligation of, or claim against, HPT. All persons dealing
with HPT in any way shall look only to the assets of HPT for the payment of any
sum or the performance of any obligation.

         23. Declaration of Trust of HPT CW. The Declaration of Trust of HPT CW,
a copy of which 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 such Declaration of Trust collectively as trustees, but
not individually or personally, and that no trustee, officer, stockholder,
employee or agent of HPT CW shall be held to any personal liability, jointly or
severally, for any obligation of, or claim against, HPT CW. All persons dealing
with HPT CW in any way shall look only to the assets of HPT CW for the payment
of any sum or the performance of any obligation.

         24. Post-Closing Agreement. Landlord hereby extends the time for Tenant
and Guarantor to fulfill all their obligations under Sections 1 and 3 of that
certain Post-Closing Agreement, dated as of July 21, 2003 among Guaranteed
Parties, Guarantor and Tenant, from the dates set forth therein to the Effective
Date.

    [Remainder of the page intentionally left blank; signatures on next page]

                                      -7-
<PAGE>

         Executed under seal as of the date first above written.

                                HPT CW PROPERTIES TRUST

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

                                HPT CW MA REALTY TRUST

                                By: /s/ John G. Murray
                                    ------------------------------------------
                                      John G. Murray,
                                      as Trustee and not individually

                                HH HPTCW II PROPERTIES LLC

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

                                HOSPITALITY PROPERTIES TRUST

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

                                CANDLEWOOD HOTEL COMPANY, INC.

                                By: /s/ Jack P. DeBoer
                                    ------------------------------------------
                                      Name:  Jack P. DeBoer
                                      Title: Chairman & Chief Executive Officer

                                CANDLEWOOD LEASING NO. 1, INC.

                                By: /s/ Jack P. DeBoer
                                    ------------------------------------------
                                      Name:  Jack P. DeBoer
                                      Title: Chairman & Chief Executive Officer

                    [Signature page to Termination Agreement]

<PAGE>
The following exhibits have been omitted and will be supplementally furnished to
the Securities and Exchange Commission upon request:

Exhibit A         Form of Bill of Sale
Exhibit B         Schedule of certain Prior AgreementsEXHIBIT 10.2

                              MANAGEMENT AGREEMENT
                                     BY AND

                                     BETWEEN

                               HPT TRS IHG-1, INC.

                                       AND

                  INTERCONTINENTAL HOTELS GROUP RESOURCES, INC.
<PAGE>

                                Table of Contents

                                                                            Page

ARTICLE 1  DEFINITIONS.........................................................1
         1.1   8.1(c) Statement................................................1
         1.2   Accounting Principles...........................................1
         1.3   Additional Hotels...............................................1
         1.4   Affiliate.......................................................1
         1.5   Agreed Upon Procedure Letter....................................2
         1.6   Arbitration.....................................................2
         1.7   Assumed Mortgage................................................2
         1.8   Authorized Mortgage.............................................3
         1.9   Award...........................................................3
         1.10  Bank Accounts...................................................3
         1.11  Base Management Fee.............................................3
         1.12  Base Year.......................................................3
         1.13  Brand...........................................................3
         1.14  Brand Standards.................................................3
         1.15  Buildings.......................................................4
         1.16  Business Day....................................................4
         1.17  Capital Replacements............................................4
         1.18  Capital Replacements Budget.....................................4
         1.19  Code............................................................4
         1.20  Collateral Agency Agreement.....................................4
         1.21  Collateral Agent................................................4
         1.22  Competitor......................................................5
         1.23  Condemnation....................................................5
         1.24  Condemnor.......................................................5
         1.25  Consolidated Financials.........................................5
         1.26  Consumer Price Index............................................5
         1.27  Controlling Interest............................................5
         1.28  Debt Service Coverage Ratio.....................................5
         1.29  Disbursement Rate...............................................6
         1.30  Effective Date..................................................6
         1.31  Environmental Laws..............................................6
         1.32  Environmental Notice............................................6
         1.33  Expiration Date.................................................6
         1.34  FF&E Reserve Commencement Month.................................6
         1.35  Fiscal Month....................................................6
         1.36  Fiscal Year.....................................................6
         1.37  First Management Fee............................................6
         1.38  First Management Fee Percentage.................................6
         1.39  Furniture, Fixtures and Equipment or FF&E.......................7
         1.40  Government Agencies.............................................7
         1.41  Gross Revenues..................................................7

                                       i
<PAGE>

                                Table of Contents
                                   (continued)
                                                                            Page

         1.42  Guarantor.......................................................8
         1.43  Guaranty........................................................8
         1.44  Hazardous Substances............................................8
         1.45  Hotel...........................................................9
         1.46  HPT.............................................................9
         1.47  HPT Group.......................................................9
         1.48  IHG.............................................................9
         1.49  Incentive Management Fee........................................9
         1.50  Initial Term...................................................10
         1.51  Initial Working Capital........................................10
         1.52  Insurance Requirements.........................................10
         1.53  Interest Rate..................................................10
         1.54  Landlords......................................................10
         1.55  Leases.........................................................10
         1.56  Legal Requirements.............................................10
         1.57  Management Fees................................................10
         1.58  Manager........................................................11
         1.59  Manager Default................................................11
         1.60  Manager Event of Default.......................................11
         1.61  Master Lease...................................................11
         1.62  Material Repair................................................11
         1.63  New Management Agreement.......................................11
         1.64  NOI............................................................11
         1.65  Officer's Certificate..........................................11
         1.66  Operating Cost(s)..............................................12
         1.67  Operating Equipment............................................13
         1.68  Operating Profit...............................................13
         1.69  Operating Standards............................................13
         1.70  Operating Supplies.............................................13
         1.71  Original Hotels................................................13
         1.72  Overland Landlord..............................................13
         1.73  Overland Lease.................................................13
         1.74  Owner..........................................................13
         1.75  Owner's First Priority.........................................13
         1.76  Owner's Fixed Priority.........................................14
         1.77  Owner's Percentage Priority....................................14
         1.78  Owner's Second Priority........................................14
         1.79  Parent.........................................................14
         1.80  Person.........................................................14
         1.81  Pledged Hotels.................................................14
         1.82  Priority Coverage Ratio........................................14
         1.83  Renewal Terms..................................................15
         1.84  Repairs........................................................15

                                       ii
<PAGE>

                                Table of Contents
                                   (continued)
                                                                            Page

         1.85  Replacement Property...........................................15
         1.86  Reservation System.............................................15
         1.87  Reserve Account................................................15
         1.88  Residual Distribution..........................................15
         1.89  Restricted Area................................................15
         1.90  Restricted Period..............................................15
         1.91  Rooms Revenue..................................................15
         1.92  SARA...........................................................15
         1.93  Second Management Fee..........................................15
         1.94  Second Management Fee Percentage...............................16
         1.95  Services Fees..................................................16
         1.96  Sites..........................................................16
         1.97  Subsidiary.....................................................16
         1.98  Substitute Tenant..............................................16
         1.99  Successor Landlord.............................................16
         1.100 System Marks...................................................16
         1.101 Term...........................................................16
         1.102 Transaction Documents..........................................16
         1.103 Ultimate Parent................................................17
         1.104 Uniform System of Accounts.....................................17
         1.105 Unsuitable for Its Permitted Use...............................17
         1.106 Working Capital................................................17
         1.107 Yearly Budget..................................................17

ARTICLE 2  SCOPE OF AGREEMENT.................................................18
         2.1   Engagement of Manager..........................................18
         2.2   Additional Services............................................20
         2.3   Use of Hotels..................................................20
         2.4   Right to Inspect...............................................21
         2.5   Right of Offset................................................21
         2.6   Condition of the Hotels........................................21

ARTICLE 3  TERM AND RENEWALS..................................................23
         3.1   Term...........................................................23
         3.2   Renewal Term...................................................23
         3.3   Owner's Termination Right at End of Term.......................24

ARTICLE 4  TITLE TO HOTEL.....................................................24
         4.1   Covenants of Title.............................................24
         4.2   Non-Disturbance................................................24
         4.3   Financing......................................................25
         4.4   Sale of a Hotel to an Affiliate................................27
         4.5   Sale of All the Hotels.........................................27

                                       iii
<PAGE>

                                Table of Contents
                                   (continued)
                                                                            Page

         4.6   The Leases.....................................................28
         4.7   Restricted Sale................................................28

ARTICLE 5  REQUIRED FUNDS.....................................................28
         5.1   Working Capital................................................28
         5.2   Reserve Account................................................29
         5.3   Additional Requirements for Reserve............................31
         5.4   Ownership of Replacements......................................31
         5.5   Manager Reserve Advances.......................................31
         5.6   No Additional Contributions....................................31

ARTICLE 6  BRAND STANDARDS AND MANAGER'S CONTROL..............................31
         6.1   Brand Standards................................................31
         6.2   Manager's Control..............................................32
         6.3   Arbitration....................................................32

ARTICLE 7  OPERATION OF THE HOTEL.............................................32
         7.1   Permits........................................................32
         7.2   Equipment and Supplies.........................................33
         7.3   Personnel......................................................33
         7.4   Sales, Marketing and Advertising...............................34
         7.5   Reservation and Communication Services.........................35
         7.6   Maintenance and Repairs........................................36
         7.7   Material Repairs...............................................36
         7.8   Liens; Credit..................................................37
         7.9   Real Estate and Personal Property Taxes........................38
         7.10  Contest........................................................38

ARTICLE 8  FISCAL MATTERS.....................................................38
         8.1   Accounting Matters.............................................38
         8.2   Yearly Budgets.................................................40
         8.3   Bank Accounts..................................................42
         8.4   Consolidated Financials........................................42

ARTICLE 9  FEES TO MANAGER....................................................43
         9.1   Management Fees................................................43
         9.2   Services Fees..................................................43

ARTICLE 10  DISBURSEMENTS.....................................................44
         10.1   Disbursement of Funds.........................................44
         10.2   Residual Distribution.........................................45
         10.3   Owner's Fixed Priority........................................46
         10.4   Owner's Percentage Priority...................................46
         10.5   No Interest...................................................47

                                       iv
<PAGE>

                                Table of Contents
                                   (continued)
                                                                            Page

         10.6   Amounts Outstanding at End of Term............................47
         10.7   Calculations..................................................47
         10.8   Survival......................................................47

ARTICLE 11  CERTAIN OTHER SERVICES............................................47
         11.1   Optional Services.............................................47
         11.2   Purchasing....................................................47

ARTICLE 12  SIGNS AND SERVICE MARKS...........................................48
         12.1   Signs.........................................................48
         12.2   System Marks..................................................48
         12.3   System Mark Litigation........................................49

ARTICLE 13  INSURANCE.........................................................50
         13.1   Insurance Coverage............................................50
         13.2   Insurance Policies............................................51
         13.3   Insurance Certificates........................................52
         13.4   Insurance Proceeds............................................53
         13.5   Manager's Insurance Program...................................53

ARTICLE 14  INDEMNIFICATION AND WAIVER OF SUBROGATION.........................53
         14.1   Indemnification...............................................53
         14.2   Waiver of Subrogation.........................................54
         14.3   Survival......................................................54

ARTICLE 15  DAMAGE TO AND DESTRUCTION OF THE HOTEL............................54
         15.1   Termination...................................................54
         15.2   Restoration...................................................55

ARTICLE 16  CONDEMNATION......................................................56
         16.1   Total Condemnation............................................56
         16.2   Partial Condemnation..........................................57
         16.3   Temporary Condemnation........................................58
         16.4   Effect of Condemnation........................................58

ARTICLE 17  DEFAULT AND TERMINATION...........................................58
         17.1   Manager Events of Default.....................................58
         17.2   Remedies for Manager Defaults.................................60
         17.3   Owner Events of Default and Remedies for Owner  Defaults......60
         17.4   Post Termination Obligations..................................61

ARTICLE 18  NOTICES 63
         18.1   Procedure.....................................................63

                                       v
<PAGE>

                                Table of Contents
                                   (continued)
                                                                            Page

ARTICLE 19  RELATIONSHIP, AUTHORITY AND FURTHER ACTIONS.......................65
         19.1   Relationship..................................................65
         19.2   Further Actions...............................................65

ARTICLE 20  APPLICABLE LAW....................................................65

ARTICLE 21  SUCCESSORS AND ASSIGNS............................................66
         21.1   Assignment....................................................66
         21.2   Binding Effect................................................67

ARTICLE 22  RECORDING.........................................................68
         22.1   Memorandum of Agreement.......................................68

ARTICLE 23  FORCE MAJEURE.....................................................68
         23.1   Operation of Hotel............................................68
         23.2   Extension of Time.............................................68

ARTICLE 24  GENERAL PROVISIONS................................................68
         24.1   Trade Area Restriction........................................69
         24.2   Environmental Matters.........................................69
         24.3   Authorization.................................................70
         24.4   Severability..................................................70
         24.5   Merger........................................................71
         24.6   Formalities...................................................71
         24.7   Consent to Jurisdiction; No Jury Trial........................71
         24.8   Performance on Business Days..................................72
         24.9   Attorneys' Fees...............................................72
         24.10  Section and Other Headings....................................72
         24.11  Documents.....................................................72
         24.12  No Consequential Damages......................................72
         24.13  No Political Contributions....................................72
         24.14  REIT Qualification............................................73
         24.15  Further Compliance with Section 856(d) of the Code............73
         24.16  Adverse Regulatory Event......................................74
         24.17  Commercial Leases.............................................75
         24.18  Nonliability of Trustees......................................75
         24.19  Arbitration...................................................76
         24.20  Estoppel Certificates.........................................77
         24.21  Confidentiality...............................................78
         24.22  Hotel Warranties..............................................79
         24.23  Effective Date................................................79
         24.24  Overland Landlord.............................................79
         24.25  Jersey City Hotel.............................................80

                                       vi
<PAGE>

                              MANAGEMENT AGREEMENT

         THIS MANAGEMENT AGREEMENT (this "Agreement") is made and entered into
as of October 27, 2003, by and between HPT TRS IHG-1, INC., a Maryland
corporation ("Owner"), and INTERCONTINENTAL HOTELS GROUP RESOURCES, INC. a
Delaware corporation ("Manager").

                               W I T N E S S E T H

         WHEREAS, on the Effective Date (this and other capitalized terms used
and not otherwise defined herein having the meanings ascribed to such terms in
ARTICLE 1), pursuant to the Leases, the Landlords are leasing to Owner the
Hotels; and

         WHEREAS, Owner wishes to engage Manager and Manager wishes to be
engaged to manage and operate the Hotels, subject to and upon the terms and
conditions set forth in this Agreement;

         NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained and other good and valuable consideration, the receipt and
sufficiency of which are herein acknowledged, Owner and Manager, intending to be
legally bound, hereby agree as follows:

                                   ARTICLE 1

                                  DEFINITIONS

         Capitalized Term used in this Agreement and not otherwise defined
herein shall have the meanings set forth below, in the Section of this Agreement
referred to below, or in such other document or agreement referred to below:

         1.1 "8.1(c) Statement" shall have the meaning given such term in
Section 8.1(c).

         1.2 "Accounting Principles" shall mean generally accepted accounting
principles, as adopted in the United States of America, consistently applied.

         1.3 "Additional Hotels" shall mean the Hotels other than the Original
Hotels, collectively.

         1.4 "Affiliate" 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
<PAGE>

company; (c) any other Person which is a Parent, or 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), and; (d) any other Person who
is an officer, director, trustee or employee of, or partner in, such Person or
any Person referred to in the preceding clauses (a), (b) and (c).

         1.5 "Agreed Upon Procedure Letter" shall mean, a letter from Ernst &
Young or another firm of independent certified public accountants (the
"auditor") selected by Manager and approved by Owner (which approval shall not
be unreasonably withheld or delayed), which letter shall, subject to the
limitations and conditions imposed by the auditor, address the following
components and such other reasonable matters as Owner and the auditor shall
reasonably agree:

         (a) That auditor has tested Manager's systems of internal controls.

         (b) That auditor has verified that the information provided was
generated from the same reporting systems as Manager uses for its regular
periodic accounting and reporting.

         (c) That auditor has verified the mathematical accuracy of the 8.1(c)
Statement.

         (d) That auditor has recomputed the annual calculation of Operating
Profit, Management Fees, Service Fees, contributions to the Reserve Account,
expenditures from the Reserve Account, Owner's Percentage Priority and the
Residual Distribution.

         (e) That auditor has confirmed the Hotels subjected to audit procedures
by Manager's internal audit department, if any, and reviewed work papers
provided in connection therewith. If auditor has performed hotel level audit
procedures at any Hotel, auditor shall identify those Hotels and list the
procedures performed and results obtained. In any event at least three Hotels
shall be subjected to audit procedures each Fiscal Year by either internal audit
or the auditor.

         1.6 "Arbitration" shall mean an arbitration conducted in accordance
with the terms of Section 24.19.

         1.7 "Assumed Mortgage" shall mean the existing mortgage encumbering the
Hotel located in Overland Park, Kansas.

                                      -2-
<PAGE>

         1.8 "Authorized Mortgage" shall mean any first mortgage, first
deed-of-trust or first deed to secure debt and other related security documents
granted in connection therewith now or hereafter granted by any Landlord to
secure a loan to, or other debt of, any Landlord or its Affiliates which is made
by an institutional lender, investment bank, publicly traded investment fund or
other similar Person regularly making loans secured by hotels or incurred in
connection with the issuance of a mortgage backed security, which loan or debt
provides for (i) level payments of interest and principal and (ii) amortization
and other terms which are commercially reasonable. The parties acknowledge that
the Assumed Mortgage is an Authorized Mortgage.

         1.9 "Award" shall have the meaning given such term in the Leases.

         1.10 "Bank Accounts" shall mean one or more bank accounts established
for the operation of the Hotels in Owner's name at a bank selected by Manager
and approved by Owner.

         1.11 "Base Management Fee" shall mean the First Management Fee and the
Second Management Fee, collectively.

         1.12 "Base Year" shall mean, for each Hotel, the 2006 Fiscal Year;
provided, however, if there shall occur a casualty, condemnation or other force
majeure event with respect to a Hotel which causes a material decline in Gross
Revenues for such Hotel for the 2006 Fiscal Year or a force majeure event
nationally or in any relevant market that results in a ten percent (10%) annual
decline in REVPAR for the Upscale Segment (or other appropriate segment) as
calculated by Smith Travel Research, nationally or in the relevant market, which
causes a material decline in Gross Revenues for any Hotel, the Base Year for
such Hotel shall be adjusted to be the first full Fiscal Year of operation of
such Hotel after the termination of any such casualty, condemnation or force
majeure event.

         1.13 "Brand" shall mean, collectively, the Candlewood Suites hotel
service marks, the Brand Standards, and all of the attributes and features
customarily associated with the Candlewood Suites hotel chain in North America
from time to time.

         1.14 "Brand Standards" shall mean the standards of operation, as
amended from time to time, in effect at substantially all hotels which are
operated under the Candlewood Suites name, which standards shall include, but
not be limited

                                      -3-
<PAGE>

to, standards of operation from time to time required of owners of similar
hotels or may be specified in manuals and other guidelines provided by the owner
of the System Marks or its Affiliates.

         1.15 "Buildings" shall mean, collectively, all buildings, structures
and improvements now or hereafter located on the Sites, and all fixtures and
equipment attached to, forming a part of and necessary for the operation of such
buildings, structures and improvements as a hotel (including, without
limitation, heating, lighting, sanitary, air-conditioning, laundry,
refrigeration, kitchen, elevator and similar items) having guest sleeping rooms,
each with bath, and such (i) restaurants, bars, banquet, meeting and other
public areas; (ii) commercial space, including concessions and shops; (iii)
parking facilities and areas; (iv) storage and service areas; (v) recreational
facilities and areas; (vi) permanently affixed signage; (vii) public grounds and
gardens; and (viii) other facilities and appurtenances, as may hereafter be
attached to and form a part of such building, structures and improvements in
accordance with this Agreement.

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

         1.17 "Capital Replacements" shall mean, collectively, replacements and
renewals to the FF&E and Repairs which are normally capitalized under the
Accounting Principles.

         1.18 "Capital Replacements Budget" shall mean the annual budget for
Capital Replacements at the Hotels, covering a Fiscal Year, as prepared by
Manager and approved by Owner as part of a Yearly Budget. References to Yearly
Budget shall be deemed to incorporate the Capital Replacement Budget unless
specifically excluded.

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

         1.20 "Collateral Agency Agreement" shall have the meaning given such
term in the Guaranty.

         1.21 "Collateral Agent" shall have the meaning given such term in the
Guaranty.

                                      -4-
<PAGE>

         1.22 "Competitor" shall mean any Person which owns directly or through
an Affiliate a hotel brand, trade name, system, or chain having at least fifteen
(15) hotels (excluding a mere franchisee or mere passive investor).

         1.23 "Condemnation" shall have the meaning given such term in the
Leases.

         1.24 "Condemnor" shall have the meaning given such term in the Leases.

         1.25 "Consolidated Financials" shall mean for any fiscal year or any
interim period of any Person, annual or interim financial statements of such
Person prepared on a consolidated basis, including such Person'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 the Accounting Principles throughout the periods reflected or
if such Person's principal place of business is the United Kingdom, in
accordance with generally accepted accounting principles, as adopted in the
United Kingdom, consistently applied throughout the periods reflected provided
that any such financial statement which is audited shall contain a
reconciliation of any differences between such accounting principles and
Accounting Principles.

         1.26 "Consumer Price Index" shall mean the Consumer Price Index for all
Urban Consumers, U.S. City Average, published by the United States Bureau of
Labor Statistics.

         1.27 "Controlling Interest" shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the business,
management or policies of such Person.

         1.28 "Debt Service Coverage Ratio" shall mean, with respect to any loan
or other debt secured by an Authorized Mortgage, the quotient obtained by
dividing (a) the NOI of the properties securing such loan or other debt for the
twelve (12) months ending on the date on which such Authorized Mortgage is
granted by (b) regularly scheduled interest and principal payments projected to
be paid thereunder during the first (1st) twelve (12) months after the first day
of the month next after the date on which such Authorized Mortgage is granted.

                                      -5-
<PAGE>

         1.29 "Disbursement Rate" shall mean a per annum rate equal to the
greater of (i) the sum of the per annum rate for twenty (20) year U.S. Treasury
Obligations as published in The Wall Street Journal, plus three hundred (300)
basis points and (ii) ten percent (10%).

         1.30 "Effective Date" shall mean the date on which (i) the Landlords
(or their Affiliates) shall acquire the Additional Hotels pursuant to that
certain Purchase and Sale Agreement of or about the date hereof between HPT and
Candlewood Hotel Company, Inc. and certain of its affiliates, (ii) Manager or
its Affiliate shall acquire the Brand from Candlewood Hotel Company, Inc. and
(iii) the lease to Candlewood Leasing No. 1, Inc. of the Original Hotels shall
have been terminated.

         1.31 "Environmental Laws" shall have the meaning given such term in
Section 24.2(b).

         1.32 "Environmental Notice" shall have the meaning given such terms in
Section 24.2(a).

         1.33 "Expiration Date" shall mean the date on which the Term shall
expire.

         1.34 "FF&E Reserve Commencement Month" shall have the meaning given
such term in Section 5.2(a).

         1.35 "Fiscal Month" shall mean each calendar month in the Term or each
partial calendar month in the Term.

         1.36 "Fiscal Year" shall mean each calendar year in the Term or each
partial calendar year in the Term.

         1.37 "First Management Fee" shall mean an amount equal to the
applicable First Management Fee Percentage of the aggregate Gross Revenues at
the Hotels in each Fiscal Year during the Term.

         1.38 "First Management Fee Percentage" shall mean with respect to the
following periods, the following percentages:

            Period                     First Management Fee Percentage
-----------------------------------------------------------------------
  Effective Date - 12/31/2006                         4%
             2007                                     5%
             2008                                     6%
      2009 and thereafter                             7%

                                      -6-
<PAGE>

         1.39 "Furniture, Fixtures and Equipment" or "FF&E" shall mean,
collectively, all furniture, furnishings and equipment (except Operating
Equipment and real property fixtures) now or hereafter located and installed in
or about the Hotels which are used in the operation thereof as hotels in
accordance with the standards set forth in this Agreement, including, without
limitation (i) office furnishings and equipment; (ii) specialized hotel
equipment necessary for the operation of any portion of the Building as a
Candlewood Suites hotel, including equipment for kitchens, laundries, dry
cleaning facilities, bars, restaurants, public rooms, commercial space, parking
areas, and recreational facilities; and (iii) all other furnishings and
equipment hereafter located and installed in or about the Buildings which are
used in the operation of the Buildings as a Candlewood Suites hotel in
accordance with the standards set forth in this Agreement.

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

         1.41 "Gross Revenues" shall mean for any period with respect to each
Hotel, all revenues and income of any nature derived directly or indirectly from
such Hotel or from the use or operation thereof, including without limitation
room sales; food and beverage sales (regardless of whether Owner, Manager or any
of their Affiliates own the items being sold); telephone, telegraph, fax and
internet revenues; rental or other payments from lessees, subleases,
concessionaires and others occupying or using space or rendering services at
such Hotel (but not the gross receipts of such lessees, subleases or
concessionaires); and the actual cash proceeds of business interruption, use,
occupancy or similar insurance); provided, however, that Gross Revenues shall
not include the following (and there shall be appropriate deductions made in
determining Gross Revenues for): gratuities or service charges in the nature of
a gratuity added to a customer's bill; federal, state or municipal excise, sales
or use taxes or any other taxes collected directly from patrons or guests or
included as part of the sales price of any goods or services; interest received
or accrued with respect to the funds in the Reserve Account or (other than for
purposes of calculating the Incentive Management Fee and the Residual

                                      -7-
<PAGE>
Distribution) the other operating accounts of the Hotels; any refunds, rebates,
discounts and credits of a similar nature, given, paid or returned in the course
of obtaining Gross Revenues or components thereof; insurance proceeds (other
than proceeds from business interruption or other loss of income insurance);
condemnation proceeds (other than for a temporary taking); credits or refunds
made to customers, guests or patrons; sums and credits received by Owner for
lost or damaged merchandise; proceeds from the sale or other disposition of a
Hotel, any part thereof, of FF&E or any other assets of the Hotels; or proceeds
of any financing or re-financing; the Initial Working Capital and any other
matters specifically excluded from Gross Revenues pursuant to this Agreement.

         1.42 "Guarantor" shall mean the Guarantor under the Guaranty.

         1.43 "Guaranty" shall mean the Guaranty Agreement of even date herewith
made by IHG for the benefit of, inter alia, Owner, as the same may be amended,
supplemented or replaced from time to time.

         1.44 "Hazardous Substances" shall mean any substance:

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

         (b) which is or becomes defined as a "hazardous waste," "hazardous
material" or "hazardous substance" or "pollutant" or "contaminant" under any
present or future federal, state or local statute, regulation, rule or ordinance
or amendments thereto including, without limitation, the Comprehensive
Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601
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 by any governmental authority, agency, department, commission, board,
agency or instrumentality of the United States, any state of the United States,
or any political subdivision thereof; or

                                      -8-
<PAGE>

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

         (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, or any applicable laws promulgated by any Government Agencies.

         1.45 "Hotel" shall mean each Hotel located at a Site including all of
the Owner's interest in such Site, the Building there, the Furniture, Fixtures
and Equipment there, the Operating Equipment there, the Operating Supplies there
and all interest of Owner in any tangible or intangible personal property
acquired by Owner in connection with its acquisition of the Hotels and the
termination of the lease to Candlewood Leasing No. 1, Inc.; provided, however,
upon the termination of the Agreement with respect to less than all of the
Hotels, pursuant to the terms hereof or otherwise, the term "Hotel" shall, with
respect to the obligation of the parties thereafter accruing, only refer to a
Hotel with respect to which this Agreement is in full force and effect.

         1.46 "HPT" shall mean Hospitality Properties Trust, a Maryland real
estate investment trust, together with its successors and permitted assigns.

         1.47 "HPT Group" shall mean HPT, Owner, the Landlords and their
Affiliates, collectively.

         1.48 "IHG" shall mean InterContinental Hotels Group PLC, its successors
and assigns.

         1.49 "Incentive Management Fee" shall mean for any Fiscal Year, twenty
percent (20%) of the excess, if any, of Gross

                                      -9-
<PAGE>

Revenues from all of the Hotels in excess of the applications thereof made
pursuant to Sections 10.1 other than pursuant to Section 10.1(q).

         1.50 "Initial Term" shall mean the period commencing on the Effective
Date and ending on the last day of the month in which occurs the day that is
twenty-five (25) years after the Effective Date.

         1.51 "Initial Working Capital" shall have the meaning given to such
term in Section 5.1.

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

         1.53 "Interest Rate" shall mean a rate, not to exceed the maximum legal
interest rate, equal to the greater of (i) twelve (12%) percent per annum and
(ii) two percent (2%) per annum in excess of the Disbursement Rate determined as
of the first day that interest accrues on any amount to which such Interest Rate
is to be applied.

         1.54 "Landlords" shall mean the landlords under the Leases,
collectively.

         1.55 "Leases" shall mean the Master Lease and the Overland Lease,
collectively.

         1.56 "Legal Requirements" shall mean all federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
ordinances, judgments, decrees, injunctions and requirements affecting Owner
(excluding any requirements which affect Owner's status as a real estate
investment trust), a Hotel or the maintenance, construction, alteration,
management 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 a Hotel, (b)
all covenants, agreements, restrictions and encumbrances, (c) all Environmental
Laws and (d) the outcome of any Arbitration.

         1.57 "Management Fees" shall mean, collectively, the Base Management
Fee and the Incentive Management Fee.

                                      -10-
<PAGE>

         1.58 "Manager" shall have the meaning given such term in the preamble
to this Agreement.

         1.59 "Manager Default" shall mean a Manager Event of Default or any
other circumstances with which the giving of notice, the passage of time or both
would constitute a Manager Event of Default or otherwise entitle Owner to
terminate this Agreement in its entirety pursuant to the terms hereof.

         1.60 "Manager Event of Default" shall have the meaning given such term
in Section 17.1.

         1.61 "Master Landlord" shall mean the landlord under the Master Lease.

         1.62 "Master Lease" shall mean the Lease Agreement dated as of the
Effective Date, by and between HPT CW Properties Trust, John G. Murray, Trustee
of HPT CW MA Realty Trust, HH HPTCW II Properties LLC and Owner, as the same may
be amended from time to time in accordance with the terms of this Agreement.

         1.63 "Material Repair" shall mean a Repair the cost which exceeds
$250,000; provided, however, on January 1 of each year starting in 2005 said
$250,000 shall be adjusted to reflect the percentage change in the Consumer
Price Index since the prior January 1.

         1.64 "New Management Agreement" shall have the meaning given such term
in Section 4.4.

         1.65 "NOI" shall mean, with respect to any property, for any period,
the Gross Operating Profit (as defined in the Uniform System of Accounts) of
such property for such period net of, for such period and such property, real
and personal property taxes and casualty and liability insurance premiums, an
imputed reserve for capital replacements equal to five percent (5%) of gross
revenues, an imputed management fee equal to three percent (3%) of gross
revenues and an imputed royalty fee of five percent (5%) of room revenues.

         1.66 "Officer's Certificate" shall mean as to any Person, a certificate
of the chief executive officer, chief financial officer or chief accounting
officer of such Person, duly authorized, accompanying the financial statements
required to be delivered by such Person pursuant to Sections 8.1, 8.4 and 17.4,
in which such officer shall certify to such officer's best knowledge (a) that
such statements have been properly prepared

                                      -11-
<PAGE>

in accordance with the Accounting Principles, (b) in the event that the
certifying party is an officer of IHG or another Guarantor, that such statements
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
that there is no default on the part of the Guarantor under the Guaranty, and
(c) in the event that the certifying party is an officer of Manager and the
certificate is being given in such capacity, that such statements fairly present
the financial operation of the Hotels.

         1.67 "Operating Cost(s)" shall mean, collectively, all costs and
expenses of the Hotels (regardless of whether the same is incurred by Owner, the
Landlords or Manager) that are normally charged as an operating expense under
Accounting Principles, including, without limitation:

                  (i) the cost of Operating Supplies, wages, salaries and
         employee fringe benefits, advertising and promotional expenses, the
         cost of personnel training programs, utility and energy costs,
         operating licenses and permits, maintenance costs, and equipment
         rentals;

                  (ii) all expenditures made for maintenance and repairs to keep
         the Hotel in good condition and repair (other than Capital
         Replacements);

                  (iii) premiums for insurance required hereunder;

                  (iv) the Services Fees;

                  (v) real estate and personal property taxes and expenses
         except to the extent expressly specified otherwise herein;

                  (vi) audit, legal and accounting fees and expenses except to
         the extent expressly specified otherwise herein; and

                  (vii) rent or lease payment for equipment used at the Hotels
         in the operation thereof.

Notwithstanding anything contained herein to the contrary, Operating Costs shall
exclude: (a) the Base Management Fee and the Incentive Management Fee; (b) items
expressly excluded from Operating Costs pursuant to the terms hereof; (c) items
for which Manager or its Affiliates are to indemnify any Landlord or

                                      -12-
<PAGE>

Owner; (d) items for which Owner or its Affiliates are to indemnify Manager (e)
items for which Manager or its Affiliates has expressly agreed under the
Transaction Documents to be liable at its own cost and expense; (f) amounts
payable to Owner or its Affiliates under the Transaction Documents or for
periods not included in the Term; (g) any reimbursement of advances made by
Manager or Owner; (h) the cost of Capital Replacements; (i) the Minimum Rent and
the Additional Rent under the Leases; (j) debt service on any loan or other debt
secured by an Authorized Mortgage or other financing obtained by any Landlord,
Owner or Manager other than equipment financing permitted hereunder; and (k)
except as provided in Sections 2.2, 6.1 or 11.1, the cost of providing any
services by the Manager or its Affiliates using their own personnel to the
Hotels which are not performed at the Hotels.

         1.68 "Operating Equipment" shall have the meaning given to the term
"Property and Equipment" under the Uniform System of Accounts.

         1.69 "Operating Profit" shall mean for any period, the excess, if any,
of Gross Revenues for all of the Hotels for such period over the sum of
Operating Costs for such Period. 1.70 "Operating Standards" shall have the
meaning given such term in Section 2.1.

         1.71 "Operating Supplies" shall have the meaning given to the term
"Inventories" under the Uniform System of Accounts.

         1.72 "Original Hotels" shall mean each Hotel located on a Site
described in Exhibits A-1 through and including A-64.

         1.73 "Overland Landlord" shall mean the landlord under the Overland
Lease.

         1.74 "Overland Lease" shall mean the Lease Agreement dated as of the
Effective Date by and between a member of the HPT Group and Owner, as the same
may be amended from time to time in accordance with the terms of this Agreement.

         1.75 "Owner" shall have the meaning given such term in the preamble to
this Agreement and shall include its successors and assigns.

         1.76 "Owner's First Priority" shall mean an annual amount equal to the
sum of (a) Fifty Million Dollars ($50,000,000) per annum plus, (b) effective on
the date of each disbursement by

                                      -13-
<PAGE>

any Landlord or Owner pursuant to Sections 5.2 (c), 15.2 (in excess of net
insurance proceeds) or 16.2 (in excess of the Award) hereof, an amount equal to
the amount so disbursed multiplied by the Disbursement Rate (determined as of
the dates on which such sums are advanced). Owner's First Priority shall be
subject to further adjustment as provided in Section 15.1(c).

         1.77 "Owner's Fixed Priority" shall mean Owner's First Priority and
Owner's Second Priority, collectively.

         1.78 "Owner's Percentage Priority" shall mean, for each Fiscal Year
after the 2006 Fiscal Year, an amount, not less than zero ($0), equal to the
aggregate of the sum of seven and one-half percent (7.5%) of (a) the Gross
Revenues of each Hotel for such Fiscal Year in excess of (b) the Gross Revenues
for such Hotel for its Base Year.

         1.79 "Owner's Second Priority" shall mean an annual amount equal to Ten
Million Dollars ($10,000,000).

         1.80 "Parent" shall mean with respect to any Person, any Person who
owns directly, or indirectly through one or more Subsidiaries or Affiliates,
greater than fifty percent (50%) 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.

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

         1.82 "Pledged Hotels" shall mean, with respect to any loan or other
debt secured by an Authorized Mortgage, collectively, the Hotels which secure
such loan or other debt.

         1.83 "Priority Coverage Ratio" shall mean for any period, for any Hotel
or group of Hotels, the quotient of (a) the excess of Gross Revenue for such
Hotel or group of Hotels for such period over amounts distributed or applied (or
required to be distributed or applied) for such period pursuant to Sections
10.1(a), 10.1(b), 10.1(e), 10.1(f), 10.1(g) and 10.1(i) of this Agreement
allocated to such Hotel or group of Hotels (as applicable), divided by (b) the
Owner's First Priority allocated to such Hotel or group of Hotels (as
applicable)for such period. For purposes of calculating the Priority Coverage
Ratio, the

                                      -14-
<PAGE>

FF&E Reserve Commencement Month shall be deemed to be the month next after the
month in which the Effective Date shall occur.

         1.84 "Renewal Terms" shall mean any period of years extending the Term
of this Agreement, commencing upon the expiration of the Initial Term or any
extensions thereto, as provided in ARTICLE 3.

         1.85 "Repairs" shall have the meaning given such term in Section 7.6.

         1.86 "Replacement Property" shall mean a Candlewood Suite hotel or
other type of hotel mutually acceptable to the parties acquired by a Landlord in
substitution for a Hotel with respect to which this Agreement was terminated
pursuant to Section 16.1.

         1.87 "Reservation System" shall mean a computerized network of high
speed terrestrial and satellite-linked hardware and data lines connecting
hotels, central reservation centers, data processing centers and travel agencies
which provides reservation services to the Candlewood Suites hotel chain in
North America.

         1.88 "Reserve Account" shall mean an interest-bearing account
established for funds to be held in reserve for Capital Replacements in the
Landlords' name at a bank selected by the Landlords.

         1.89 "Residual Distribution" shall mean amounts to be distributed to
Owner pursuant to Section 10.2.

         1.90 "Restricted Area" shall mean, for any Hotel, an area within a
radius of three (3) miles of such Hotel.

         1.91 "Restricted Period" shall mean, for each Hotel, the period ending
on the second (2nd) anniversary of the Effective Date.

         1.92 "Rooms Revenue" shall mean all revenue derived from the rental of
guest rooms in a Hotel determined in accordance with the Accounting Principles.

         1.93 "SARA" shall mean the Superfund Amendments and Reauthorization Act
of 1986.

         1.94 "Second Management Fee" shall mean an amount equal to the
applicable Second Management Fee Percentage of the

                                      -15-
<PAGE>

aggregate Gross Revenues at the Hotels in each Fiscal Year during the Term.

         1.95 "Second Management Fee Percentage" shall mean with respect to the
following periods, the following percentages:

              Period                       Second Management Fee Percentage
              ------                       --------------------------------
    Effective Date - 12/31/2006                           3%
               2007                                       2%
               2008                                       1%
        2009 and thereafter                               0%

         1.96 "Services Fees" shall mean the fees specified in Section 9.2.

         1.97 "Sites" shall mean the parcels of real estate more particularly
described in Exhibits A-1 through and including A-76, collectively.

         1.98 "Subsidiary" shall mean with respect to any Person, any entity (a)
in which such Person owns directly, or indirectly, greater than twenty percent
(20%) 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).

         1.99 "Substitute Tenant" shall have the meaning given such term in
Section 4.2.

         1.100 "Successor Landlord" shall have the meaning give such term in
Section 4.3

         1.101 "System Marks" shall mean all service marks, trademarks,
copyrights, trade names, logo types, commercial symbols, patents or other
similar rights or registrations now or hereafter held, applied for or licensed
by Manager or any Affiliate of Manager in connection with the Candlewood Suites
brand of hotels.

         1.102 "Term" shall mean the term of this Agreement as it may be
extended or terminated.

         1.103 "Transaction Documents" shall mean, collectively, this Agreement,
the Guaranty, the Collateral Agency Agreement and any other agreement,
instrument, indemnity

                                      -16-
<PAGE>

or undertaking executed and delivered by Manager, IHG or any of their Affiliates
in connection herewith or therewith.

         1.104 "Ultimate Parent" shall mean, with respect to any Person, each
Parent of such Person who in turn has no Parent.

         1.105 "Uniform System of Accounts" shall mean the Uniform System of
Accounts for the Lodging Industry, Ninth Revised Edition, 1996, as published by
the Educational Institute of the American Hotel and Motel Association, as it may
be amended from time to time.

         1.106 "Unsuitable for Its Permitted Use" shall mean with respect to a
Hotel, a state or condition of such Hotel such that (a) following any damage or
destruction involving such Hotel, such Hotel cannot be operated in the good
faith judgment of Manager or Owner on a commercially practicable basis and it
cannot reasonably be expected to be restored to substantially the same condition
as existed immediately before such damage or destruction and otherwise as
required under ARTICLE 15 hereof, using only the net proceeds of insurance
obtained in connection therewith and other funds that Owner or Manager elect to
provide pursuant to the terms of ARTICLE 15 hereof 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 amounts payable to Owner
hereunder and other costs related to the Hotel following such damage or
destruction, or (b) as the result of a partial taking by Condemnation, such
Hotel cannot be operated, in the good faith judgment of Manager or Owner, on a
commercially practicable basis in light of then existing circumstances.

         1.107 "Working Capital" shall mean funds that are used (or held for
use) in the day-to-day operation of the business of the Hotels, including,
without limitation, change and petty cash funds, amounts deposited in operating
bank accounts, receivables, amounts deposited in payroll accounts, prepaid
expenses and funds required to maintain Operating Supplies, less accounts
payable and accrued current liabilities, exclusive of any funds in the Reserve
Account.

         1.108 "Yearly Budget" shall mean, with respect to each Hotel, the
annual operating budget of such Hotel, covering a Fiscal Year, as prepared by
Manager in accordance with the Accounting Principles and approved by Owner. Such
budget shall include an operating budget, a business plan and a Capital

                                      -17-
<PAGE>

Replacement Budget. Without limiting the generality of the foregoing, the Yearly
Budget shall include a projection of the estimated financial results of the
operation of each Hotel for the Fiscal Year. Such projection shall project the
estimated Gross Revenues, departmental profits, Operating Costs and Operating
Profit for the Fiscal Year for each Hotel.

                                   ARTICLE 2

                               SCOPE OF AGREEMENT

         2.1 Engagement of Manager. Subject to the terms of this Agreement,
Owner hereby grants to Manager the sole and exclusive right to supervise and
direct the management and operation of the Hotels for the Term. Manager hereby
accepts such grant and agrees that it will control, supervise and direct the
management and operation of the Hotels, in an efficient and economical manner
consistent with standards prevailing in well managed hotels similar to the
Hotels, including all activities in connection therewith which are customary and
usual to such an operation (all of the foregoing, collectively, the "Operating
Standards"). Owner shall request the current operator(s) of the Hotels to
cooperate with Manager in the transition of management to Manager, including
making all books and records of the Hotels available to Manager on the date
Manager assumes responsibility for operating under this Agreement. Subject to
the terms and conditions of this Agreement, the Operating Standards and the
Brand Standards, Manager shall have the right to determine operating policy,
standards of operation, quality of service and any other matters affecting
customer relations or management and operation of the Hotels. Without limiting
the generality of the foregoing, and in addition to the other functions to be
performed by Manager pursuant to this Agreement, Manager shall, in connection
with the Hotels and in accordance with the Brand Standards, the Operating
Standards and the terms of this Agreement, perform each of the following
functions, provided, however, except as otherwise set forth in this Agreement,
the costs and expenses of performing the following functions shall be Operating
Costs:

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

                                      -18-
<PAGE>

         (b) Manage expenditures to replenish Operating Supplies and Operating
Equipment, make payments on accounts payable and collect accounts receivable.

         (c) Arrange for and supervise public relations and advertising and
prepare marketing plans.

         (d) Procure all Operating Supplies and replacement Operating Equipment.

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

         (f) Reasonably cooperate (provided that except as herein expressly
provided Manager shall not be obligated to enter into any amendments of this
Agreement or, unless Owner agrees to reimburse Manager therefor, to incur any
material expense including any internal expenses) in any attempt(s) to: (i)
effectuate a sale or other transfer of a Hotel subject to the terms of Sections
4.4 and 4.5 of this Agreement; or (ii) to obtain any Authorized Mortgage.

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

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

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

         (j) Make representatives available to consult with and advise Owner or
Owner's designee at Owner's reasonable request

                                      -19-
<PAGE>

concerning policies and procedures affecting the conduct of the business of the
Hotels.

         (k) Collect and account for and remit to governmental authorities all
applicable excise, sales, occupancy and use taxes or similar governmental
charges collected by or at the Hotels directly from guests, members or other
patrons, or as part of the sales price of any goods, services or displays, such
as gross receipts, admission or similar or equivalent taxes, duties, levies or
charges (it being understood that any such item is not an Operating Cost except
to the extent that such item was included in Gross Revenues).

         (l) Keep Owner advised of events which might reasonably be expected to
have a material effect on the financial performance or value of any Hotel.

         (m) To the extent in Manager's control, obtain and maintain all
approvals necessary to use and operate the Hotels in accordance with the Brand
Standards, Operating Standards and Legal Requirements.

         (n) Perform such other tasks with respect to the Hotels as are
generally performed by managers of similar hotels consistent with the Operating
Standards and the Brand Standards.

         2.2 Additional Services. Any fees for services not included in the
Management Fees for the Hotels shall be consistent with fees established for
similar types of hotels managed by Manager or its Affiliates. Any disputes under
this Section 2.2 shall be resolved by Arbitration.

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

                                      -20-
<PAGE>

the public, as such, or of implied dedication of the Hotels or any portion
thereof.

         2.4 Right to Inspect. Manager shall permit Owner and its authorized
representatives to inspect or show the Hotels during usual business hours upon
not less than twenty four (24) hours' notice, provided that any inspection by
Owner or its representatives shall not unreasonably interfere with the use and
operation of the Hotels and further provided that in the event of an emergency
as determined by Owner in its reasonable discretion, prior notice shall not be
required.

         2.5 Right of Offset. Manager shall not offset against any amounts owed
to Owner; provided, however, Manager may offset amounts which Owner has failed
to fund in violation of Section 5.2(c) against the amounts owed to Owner
hereunder provided that after giving effect to such offset there shall still be
paid to Owner an amount sufficient to pay regularly scheduled payments of
interest and principal under any loan or other debt secured by an Authorized
Mortgage and attributable to the Pledged Hotels.

         2.6 Condition of the Hotels.

         (a) As of the Effective Date, subject to the terms of Sections 2.6(b)
and 2.6(c), Manager acknowledges receipt and delivery of possession of each
Hotel, and Manager accepts each Hotel in its "as is" condition as of the
Effective Date, subject to the rights of parties in possession, the existing
title, including all covenants, conditions, restrictions, reservations, mineral
leases, easements and other matters of record or that are visible or apparent on
the Hotels, all applicable Legal Requirements, and such other matters which
would be disclosed by an inspection of the Hotels and the record title thereto
or by an accurate survey thereof. MANAGER REPRESENTS THAT: IT HAS INSPECTED THE
HOTELS INCLUDING THE FF&E AND ALL OF THE FOREGOING AND HAS FOUND THE CONDITION
THEREOF SATISFACTORY AND IN COMPLIANCE WITH THE BRAND STANDARDS IN ALL MATERIAL
RESPECTS; EXCEPT FOR CAPITAL REPLACEMENT TO BE MADE FROM TIME TO TIME USING
FUNDS TO BE DEPOSITED IN THE RESERVE ACCOUNT PURSUANT TO SECTION 5.2(a), MANAGER
CURRENTLY DOES NOT ANTICIPATE THE NEED TO MAKE CAPITAL REPLACEMENTS DURING THE
FIRST FIVE YEARS OF THE TERM (PROVIDED, HOWEVER, SUCH REPRESENTATION IS NOT A
GUARANTY OR WARRANTY THAT NO SUCH CAPITAL REPLACEMENT WILL BE REQUIRED); AND,
EXCEPT AS PROVIDED IN SECTIONS 2.6(b) and 2.6(c) IT IS NOT RELYING ON ANY
REPRESENTATION OR WARRANTY OF OWNER, ANY LANDLORD OR ANY OF THEIR AGENTS OR
EMPLOYEES WITH RESPECT TO ANY OF THE

                                      -21-
<PAGE>

MATTERS SET FORTH IN THIS SECTION. EXCEPT AS PROVIDED IN SAID SECTIONS, MANAGER
WAIVES ANY CLAIM OR ACTION AGAINST OWNER OR THE LANDLORDS WITH RESPECT TO THE
CONDITION OF THE HOTELS. EXCEPT AS PROVIDED IN SAID SECTIONS, THE LANDLORDS AND
OWNER MAKE NO WARRANTY OR REPRESENTATION, EXPRESS OR IMPLIED, WITH RESPECT TO
ANY HOTEL OR ANY PART THEREOF, EITHER AS TO ITS FITNESS FOR USE, DESIGN OR
CONDITION FOR ANY PARTICULAR USE OR PURPOSE OR OTHERWISE, OR AS TO THE QUALITY
OF THE MATERIAL OR WORKMANSHIP THEREIN, LATENT OR PATENT.

         (b) Master Landlord warrants and represents that: its investigation of
the Original Hotels made in connection with the acquisition of the Original
Hotels was conducted in a manner consistent in all material respects with the
standards generally employed by Master Landlord for HPT Group in connection with
their acquisitions of hotel properties; and, based on such investigation, when
Master Landlord acquired the Original Hotels it believed that the statements in
Exhibit C were true with respect to the Original Hotels in all material respects
except as disclosed in the materials previously furnished or obtained by Manager
or otherwise disclosed in writing to, or known by, Manager. Manager shall have
the right, subject to the receipt of any required consents and the terms of any
applicable agreement, to pursue, in the name of Master Landlord, any and all
rights Master Landlord may have under or with respect to any title insurance
policy, engineering report, survey, zoning opinion or report or environmental
study obtained by Master Landlord in connection with such acquisition. The terms
of Section 2.6(f) shall apply to any recovery by Manager in connection
therewith.

         (c) Each of the Master Landlord and Owner warrants and represents to
Manager that, except as disclosed in the materials previously furnished or
obtained by Manager or otherwise disclosed in writing to, or known by, Manager:
it has not done anything since the date of its acquisition of the Original
Hotels to cause any of the statements in Exhibit C to be untrue in any material
respect on the Effective Date; and to Owner's Knowledge the statements in
Exhibit C will be true in all material respects on the Effective Date with
respect to all of the Hotels. Master Landlord and Owner shall not between the
date hereof and the Effective Date do anything with respect to the Original
Hotels which causes the statements in Exhibit C to be untrue in any material
respect on the Effective Date. Manager warrants and represents that to its
knowledge the statements in Exhibit C will be true in all material respects on
the Effective Date.
                                      -22-
<PAGE>
         (d) The representations and warranties made in this Agreement are made
as of the date hereof. All representations and warranties made in this Agreement
shall survive the Effective Date.

         (e) As used herein, the term "Owner's Knowledge" shall mean the actual
(and not the imputed or constructive) knowledge of John Murray without any
inquiry of other personnel employed by the HPT Group. The Landlords and Owner
warrant and represent to Manager that John Murray is the officer of the HPT
Group to whom any condition which would render any of the statements in Exhibit
C untrue in any material respect should be reported by any employee of the HPT
Group that first discovers such condition and that the HPT Group has in place,
either formally or informally, systems designed to make sure that John Murray
receives such reports.

         (f) Any amounts recovered during the Term by Owner or Manager from any
third party with respect to a defective condition at any of the Hotels in excess
of the cost of recovering the same (including, without limitation, attorneys'
fees) shall be deposited into the Reserve Account or applied as the parties
reasonably agree.

                                   ARTICLE 3

                               TERM AND RENEWALS

         3.1 Term. The term of this Agreement shall be for a period beginning on
the Effective Date and continuing for the Initial Term and any extension of the
term hereof in accordance with the provision of this Agreement, unless sooner
terminated as hereinafter provided.

         3.2 Renewal Term. The Term may be extended, at Manager's option, for up
to two (2) consecutive periods (each, a "Renewal Term") of fifteen (15) years
each on not less than two (2) years' prior notice to Owner. In the event Manager
fails to give notice of its election not to exercise either of its options to
extend the Term on or before the date which is the day prior to the date that is
two (2) years prior to the then Expiration Date, Manager shall be deemed to have
exercised the applicable extension option. The terms and provisions of this
Agreement will remain in effect as stated herein during any Renewal Term except
that Manager shall have no right to extend the Term beyond the Renewal Terms
herein provided.

                                      -23-
<PAGE>

         3.3 Owner's Termination Right at End of Term. If Manager gives notice
of its election not to extend or if Manager shall have no further right to
extend the Term, at any time during the last two years of the Term, Owner may
terminate this Agreement on not less than thirty (30) days' prior written
notice.

                                   ARTICLE 4

                                 TITLE TO HOTEL

         4.1 Covenants of Title. During the Term, provided no Manager Default
exists, Manager shall have the right peaceably and quietly to operate the Hotels
in accordance with the terms of this Agreement, free from interference,
disturbance and eviction by Owner or the Landlords or by any other Person or
Persons claiming by, through or under Owner or the Landlords, subject only to
termination of this Agreement as herein provided. Except as may otherwise be
provided herein, Owner, at Owner's own expense (and not as an Operating Cost),
shall prosecute all appropriate actions, judicial or otherwise, required to
assure such quiet and peaceable operation by Manager and shall pay and discharge
any rental obligations under the Leases. Without Manager's written consent,
which consent shall not be unreasonably withheld, Owner shall not enter into an
agreement, covenant or encumbrance affecting title to the Hotels except in
connection with Authorized Mortgages and sales or transfers of the Hotels not
prohibited hereby.

         4.2 Non-Disturbance. The Landlords agree that in the event the Leases
terminate prior to expiration or earlier termination of the Term, so long as (i)
there exists no uncured Manager Event of Default and (ii) Owner is not otherwise
entitled to terminate this Agreement: (a) Manager shall not be disturbed in its
rights under this Agreement by the Landlords; (b) the Landlords shall assume the
obligations of Owner under this Agreement; and (c) Manager shall attorn to the
Landlords and recognize the Landlords as the "Owner" under this Agreement. The
Landlords shall have the right to assign all of their right, title and interest
in, to and under this Agreement to a new tenant (a "Substitute Tenant") to which
such Landlords shall lease the Hotels (pursuant to leases which imposes no
greater risks, obligations, duties or liability on Manager than the Leases
(assuming the same had not been terminated) and for a term equal to the
unexpired term of this Agreement) which Substitute Tenant shall expressly assume
all of the Owner's obligations under this Agreement. Upon such assignment to,
and assumption by, a Substitute Tenant, the Landlords shall be

                                      -24-
<PAGE>

relieved of all future obligations arising under this Agreement (other than any
expressly imposed on the Landlords pursuant to Sections 4.2 through and
including 4.7), Manager shall attorn to the Substitute Tenant and recognize the
Substitute Tenant as the "Owner" under this Agreement, and the term "Leases" as
used in this Agreement shall be deemed to refer to the leases between the
Landlords and the Substitute Tenant.

         4.3 Financing.

         (a) The Landlords shall be entitled to encumber the Hotels or any of
them with one or more Authorized Mortgages which is expressly subordinate to
this Agreement or in connection with which the following terms and conditions
are satisfied; provided, however, none of the following terms or conditions
needs to be satisfied with respect to the Assumed Mortgage:

                  (i) the loan or other debt secured by such Authorized Mortgage
shall not be cross-collateralized with other property or hotels which are not
managed or franchised by Manager, IHG or their respective Affiliates;

                  (ii) the principal amount secured by such Authorized Mortgage
shall not exceed the sum of seventy five percent (75%) (or, if less than four
(4) Hotels secure such principal amount, sixty five percent (65%)) of the sum of
the fair market value as of the date of the granting of such Authorized Mortgage
of the Pledged Hotels and the other properties securing such principal amount;

                  (iii) as of the date of the granting of such Authorized
Mortgage, the Debt Service Coverage Ratio associated with such loan or debt
secured thereby shall not be less than (i)1.4 if fewer than four (4) Hotels
secure such loan or other debt or (ii) 1.3 if four (4) or more Hotels secure
such loan or other debt; and

                  (iv) the holder of such Authorized Mortgage shall execute and
deliver to Manager (Manager agreeing to likewise execute and deliver to such
holder) a so-called subordination, non-disturbance and attornment agreement
which shall provide that:

         (A) this Agreement and Manager's rights hereunder are subject and
subordinate to the Authorized Mortgage, the lien thereof, the rights of the
holder thereof and to any and all

                                      -25-
<PAGE>

advances made thereunder, interest thereon or costs incurred in connection
therewith;

         (B) so long as this Agreement is in full force and effect and there
exists no Manager Event of Default, Manager's rights under this Agreement shall
not be disturbed by reason of such subordination or by reason of foreclosure of
such Authorized Mortgage or receipt of deed in lieu of foreclosure;

         (C) Manager shall attorn to the holder or the purchaser at any such
foreclosure or the grantee of any such deed (each, a "Successor Landlord");

         (D) in the event of such attornment, the terms of this Agreement
binding on the Landlords and Manager shall continue in full force and effect as
a direct agreement between such Successor Landlord and Manager, upon all the
terms, conditions and covenants set forth herein, except that the Successor
Landlord shall not be (1) bound by any payment of Owner's Fixed Priority,
Owner's Percentage Priority or the Residual Distribution in advance of when due;
(2) bound by any amendment or modification of this Agreement made after the date
that Manager first had written notice of such Authorized Mortgage without the
consent of the holder thereof; (3) liable in any way to Manager for any act or
omission, neglect or default on the part of any Landlord or Owner under this
Agreement; (4) obligated to perform any work or improvements to be done by any
Landlord or Owner or to make any advances except for those advances to be made
pursuant to Section 5.2(c) from and after the date on which such Successor
Landlord acquired the Hotel(s); or (5) subject to any counterclaim or setoff
which theretofore accrued to Manager against any Landlord or Owner;

         (E) In the event of a casualty or condemnation affecting any Pledged
Hotel which does not result in the termination of this Agreement with respect to
such Pledged Hotel, the net insurance proceeds or Award shall be applied to the
restoration of such Hotel as herein provided; and

         (F) Such other terms as are customary for similar agreements.

         (b) In the event less than all of the Hotels are to secure a loan or
other debt secured by an Authorized Mortgage, Owner shall have the right to
cause the Pledged Hotels to be managed pursuant to a separate management
agreement with Manager which agreement shall be for a term equal to the
unexpired portion of

                                      -26-
<PAGE>

the Term and otherwise on substantially the same terms of this Agreement except
as otherwise provided herein, provided that the Pledged Hotels in the aggregate
and the remaining Hotels in the aggregate shall have Priority Coverage Ratios
for the 12-month period ending on the last day of the month next prior to the
date on which such separate management agreement is entered into equal to each
other or equal to, or greater than, 1.3. In connection with entering into such
separate management agreement, the parties shall make appropriate allocations of
Owner's Fixed Priority, amounts in the Reserve Account, the Working Capital, and
any outstanding advances made by Owner, Manager or their respective Affiliates
so that the obligations allocable to the Hotels subject to such Authorized
Mortgage shall not be due from the other Hotels and vice versa. The allocation
of Owner's Fixed Priority for each Hotel shall be proportional to the NOI of
such Hotel for the then most recently ended twelve (12) months relative to the
NOI of all the other Hotels for such period. Without the consent of Manager, the
holder of any Authorized Mortgage shall have the right to elect to be subject
and subordinate to this Agreement, such subordination to be effective upon such
terms and conditions as such holder may direct which are not inconsistent with
the provisions hereof.

         (c) Manager shall be entitled to pay any overdue regularly scheduled
payments of interest and principal on any Authorized Mortgage from the Operating
Profits of Hotels subject to such Authorized Mortgage.

         4.4 Sale of a Hotel to an Affiliate. In the event of a sale or transfer
of any Hotel to an Affiliate of the Landlords, this Agreement shall remain in
full force and effect without regard to such sale or transfer.

         4.5 Sale of All the Hotels. If the Landlords sell or otherwise transfer
all of the Hotels to a single transferee in a single transaction, (a) the
transferee shall assume the Landlords' obligations hereunder and (b) the
Landlords shall be released and relieved from any and all obligation hereunder.
In connection with such transfer, Owner may assign this Agreement to the
transferee or its Affiliate, and provided the assignee assumes all of Owner's
obligations hereunder thereafter accruing, Owner shall be released and relieved
from all such obligations. Landlords, their successors and assigns shall not
sell less than all the Hotels to any Person except to an Affiliate as provided
in Section 4.4.

                                      -27-
<PAGE>

         4.6 The Leases. The Leases shall not be terminated, amended or modified
in any way which would materially increase Manager's obligations hereunder or
materially reduce its rights hereunder. In the event of a conflict between the
terms hereof and the terms of the Leases, the terms hereof shall govern.

         4.7 Restricted Sale. Except in connection with a foreclosure of an
Authorized Mortgage, neither the Landlords nor Owner shall transfer its interest
in any Hotel directly or indirectly, to any Person which: (i) is in control of
or controlled by Persons who have been convicted of felonies; (ii) is a
Competitor or an Affiliate of a Competitor; (iii) lacks the financial
capabilities to perform Owner's obligations hereunder; or (iv) fails or refuses
to assume the Landlords' obligations under this Agreement as required in Section
4.5. Owner acknowledges and agrees that Manager's ability to manage any sold
Hotel is critical to the ability of Manager to successfully develop the
Candlewood brand, and that Manager would suffer irreparable harm if any Hotel is
sold in violation of Section 4.5. Owner agrees, therefore, that Manager shall be
entitled to injunctive relief to prevent any sale of a Hotel not in compliance
with the requirements of Section 4.5.

                                   ARTICLE 5

                                 REQUIRED FUNDS

         5.1 Working Capital. Manager shall contribute to the Working Capital
for the Hotels an amount reasonably sufficient to (a) pay Operating Costs for
the first thirty (30) days of operating of the Hotels following the Effective
Date net of revenues for the same period(the "Initial Working Capital") and (b)
upon the Effective Date, pay to Owner the monthly installment of Owner's First
Priority for the month in which the Effective Date occurs. Promptly after the
month in which the Effective Date occurs, the parties shall agree on the amount
of the Initial Working Capital which Manager so contributed. After the first
thirty (30) days of operating the Hotels, upon written notice from Manager,
Owner shall advance any additional funds, over and above the Initial Working
Capital, necessary to pay Operating Costs (but not Owner's Fixed Priority) as
they come due. Any such request by Manager shall be accompanied by a reasonably
detailed explanation of the reasons for the request. All funds so advanced for
Working Capital shall be utilized by Manager to pay Operating Costs as they come
due. If Owner does not advance such additional Working Capital within two (2)
Business Days after notice, Manager, as its exclusive remedy,

                                      -28-
<PAGE>

shall have the right either to (i) advance such additional Working Capital or
(ii) terminate this Agreement on ten (10) days' advance written notice to Owner;
provided, however, such notice of termination shall be void ab initio if Owner
advances the requested funds necessary to pay Operating Costs prior to the end
of the tenth (10th) day after the receipt of such termination notice. If Manager
fails to either make such advance or give notice of termination within ten (10)
days, after the expiration of such two (2) Business Days, Owner may elect by
written notice to Manager to terminate this Agreement, which termination shall
be effective ten (10) days after the date such notice is given. Upon the
expiration or earlier termination of the Term, provided there is no uncured
Manager Default, after the payment of all Operating Costs and all amounts owed
to Owner, Manager shall be entitled to retain the Initial Working Capital.

         5.2 Reserve Account.

         (a) On the Effective Date, Owner shall, or shall cause the Landlords
to, deposit in the Reserve Account Fifteen Million Dollars ($15,000,000).
Manager shall transfer from the Bank Accounts to the Reserve Account in cash on
or before the 25th day of each Fiscal Month, beginning in the month (the "FF&E
Reserve Commencement Month") which is next after the month in which the second
anniversary of the Effective Date occurs and continuing for each and every month
during the Term, an aggregate amount equal to five percent (5%) of each Hotel's
Gross Revenues for the prior Fiscal Month. Amounts in the Reserve Account are to
pay for Capital Replacements undertaken after the Effective Date required to
maintain any and all of the Hotels in accordance with the Operating Standards
and the Brand Standards; provided, however, notwithstanding anything in this
Agreement to the contrary, no additional cost or expense shall be incurred or
paid in connection with any Capital Replacements made during the last two (2)
years of the Term to the extent attributable solely to complying with the Brand
Standards. The amounts so paid into the Reserve Account shall be recorded on the
Hotels' books of account as "Reserve for FF&E Replacements." Except as expressly
provided herein, any expenditures for Capital Replacements during any Fiscal
Year which have been approved in the yearly Capital Replacements Budget may be
made without Owner's further approval and, to the extent available, may be made
by Manager from the Reserve Account. Any amounts remaining in the Reserve
Account at the close of each Fiscal Year will be carried forward and retained in
the Reserve Account. Any and all portions of the Hotels which are scrapped or
removed in connection with the

                                      -29-
<PAGE>

making of any major or non-major repairs, renovations, additions, alterations,
improvements, removals or replacements at the Hotels shall be disposed of by
Manager and any net proceeds thereof shall be deposited in the Reserve Account
and not included in Gross Revenues. In addition, any proceeds from the sale of
FF&E no longer necessary to the operation of the Hotels shall be added to the
Reserve Account. Manager shall be entitled to use funds in the Reserve Account
to make Capital Replacements at any and all of the Hotels regardless of the
Hotel from which such funds originate.

         (b) Manager shall be the only party entitled to withdraw funds from the
Reserve Account until a Manager Default shall occur.

         (c) If, at any time, the funds in the Reserve Account shall be
insufficient for Capital Replacements which are set forth in the Capital
Replacement Budget or required to comply with the Operating Standards, Brand
Standards, Insurance Requirements or Legal Requirements, Manager shall give
Owner written notice thereof, which notice shall set forth, in reasonable
detail, the nature of the required action, the estimated cost thereof (including
the amount which is in excess of the amount of funds in such Reserve Account)
and such other information with respect thereto as Owner may reasonably require.
Provided that there is then no uncured Manager Default, Owner shall, within
twenty (20) Business Days after such notice, disburse (or cause the Landlords to
disburse) such required funds to Manager for deposit into the Reserve Account.
In such event Owner's First Priority shall be adjusted as provided for herein in
the definition of Owner's First Priority.

         (d) If Owner shall fail to disburse (or cause the Landlords to
disburse) funds to Manager for deposit into the Reserve Account in violation of
Section 5.2(c), which failure continues for five (5) days after the giving of
notice from Manager to Owner, in addition to Manager's other remedies hereunder
or under the Guaranty Agreement of even date herewith from HPT to Manager,
Manager shall be entitled, but not obligated, to deposit in the Reserve Account
the amount of funds which Owner so failed to disburse.

         (e) Upon the expiration or earlier termination of the Term, Manager
shall disburse to Owner, or as Owner shall direct, all amounts remaining in the
Reserve Account after payments of all expenses on account of Capital
Replacements incurred by Manager during the Term.

                                      -30-
<PAGE>

         5.3 Additional Requirements for Reserve. All expenditures from the
Reserve Account shall be (as to both the amount of each such expenditure and the
timing thereof) both reasonable and necessary given the objective that the
Hotels will be maintained and operated to a standard comparable to competitive
properties and in accordance with the Operating Standards and the Brand
Standards.

         5.4 Ownership of Replacements. All Capital Replacements made pursuant
to this Agreement and all amounts in the Reserve Account, shall be the property
of Owner or the Landlords, as applicable, as provided under the Leases.

         5.5 Manager Reserve Advances. Manager shall have the right to propose
certain Capital Replacements not required by the Operating Standards or the
Brand Standards which Manager reasonably believes would maximize the profit
potential of one or more of the Hotels. If Owner does not agree to provide funds
for the same, Manager shall have the right to contribute to the Reserve Account
the cost of same and cause such Capital Replacement to be made.

         5.6 No Additional Contributions. Except as otherwise expressly provided
in this Agreement, Owner shall not, under any circumstances, be required to, or
provide funds to, build or rebuild any improvement at the Hotel, or to make any
repairs, replacements, alterations, restorations or renewals of any nature or
description to the Hotel, whether ordinary or extraordinary, structural or
nonstructural, foreseen or unforeseen.

                                   ARTICLE 6

                     BRAND STANDARDS AND MANAGER'S CONTROL

         6.1 Brand Standards. Manager shall operate each Hotel as a Candlewood
Suites hotel in accordance with the terms of this Agreement, the Brand Standards
and the Operating Standards. Manager and its affiliates which own the System
Marks and Brand Standards reserve the right to revise and amend the System Marks
or Brand Standards from time to time on a non-discriminatory basis. So long as
Manager believes in good faith at the time of revising or amending the System
Marks or Brand Standards that the change is necessary to preserve the
competitiveness of the Brand, Owner agrees that all the Hotels will be required
to implement such change; provided, however, any revision in the System Marks or
Brand Standards proposed by Manager or its

                                      -31-
<PAGE>

Affiliates shall not bring about such a change in the nature or character of the
Brand as to cause it to be fundamentally different than it was before the
revision. Owner also agrees that the Hotels will be required to participate in
Brand-wide or area programs that are implemented after the date hereof from time
to time by Manager or its Affiliates with respect to the Brand. The allocable
cost of participation in such programs (to the extent not duplicative of the
services for which the Management Fee is being paid), shall be Operating Costs
of the Hotels to the extent the same are consistent in all material respects
with the amounts for the same included in the applicable Yearly Budget.

         6.2 Manager's Control. Subject to the terms of this Agreement, Manager
shall have uninterrupted control over the operation of the Hotel. Owner
acknowledges that under this Agreement, Owner delegates all authorities and
responsibilities for operation of the Hotel to Manager provided, however,
Manager shall not be entitled to make any agreement or commitment binding on
Owner except as herein expressly provided. Manager shall be solely responsible
for determining room rates, food and beverage menu prices, charges to guests for
other Hotel services and the terms of guest occupancy and admittance to the
Hotels, use of rooms for commercial purposes, policies relating to
entertainment, labor policies, publicity and promotion activities and technology
services and equipment to be used in the Hotel. Manager shall review with Owner
from time to time, and during the annual review of the Yearly Budget, material
changes in policies, practices and procedures and their effect on the financial
performance of the Hotels.

         6.3 Arbitration. Any dispute under this ARTICLE 6 shall be resolved by
Arbitration.

                                   ARTICLE 7

                             OPERATION OF THE HOTEL

         7.1 Permits. Manager, as an Operating Cost, shall obtain and maintain
in its name (or Owner's or the Landlords' name to the extent the same is
required by applicable Legal Requirements) in full force and effect all
necessary operating licenses and permits, including liquor, bar, restaurant,
sign and hotel licenses, as may be required for the operation of the Hotels in
accordance with this Agreement, the Brand Standards and the Operating Standards.
Owner and/or the Landlords shall reasonably cooperate with Manager in obtaining
any such

                                      -32-
<PAGE>

operating licenses or permits. Any costs or expenses (including, without
limitation, reasonable attorneys' fees) incurred by Owner and/or a Landlord in
connection therewith shall constitute Operating Costs. Manager will use
reasonable efforts to comply with all Legal Requirements imposed in connection
with any such licenses and permits and at all times use commercially reasonable
efforts to manage the Hotels in accordance with, and cause the Hotels to comply
with, such Legal Requirements, any other Legal Requirements and Insurance
Requirements applicable to any Hotel.

         7.2 Equipment and Supplies. Manager shall procure pursuant to the
Yearly Budgets all such Operating Supplies and Operating Equipment as Manager
deems necessary for the normal and ordinary course of operation of the Hotel in
accordance with the Brand Standards and Operating Standards.

         7.3 Personnel.

         (a) All personnel employed at the Hotels will be employees of Manager.
Manager will hire, supervise, direct, discharge and determine the compensation,
other benefits and terms of employment of all personnel working in the Hotels.
Manager, in the exercise of reasonable discretion and business judgment, will be
the sole judge of the fitness and qualifications of such personnel and is vested
with absolute discretion in the hiring, supervising, directing, discharging and
determining the compensation, other benefits and terms of employment of such
personnel. In such discretion, Manager may elect to staff certain functions at
offsite or regional locations, or to provide employee benefits on a Brand-wide
or other multi-location basis and shall equitably allocate the employee costs
among the hotels participating in such staffing or benefits. Owner shall not
interfere with the performance of employment duties of, or give orders or
instructions to, any personnel employed at the Hotel. Except as otherwise
provided herein, Operating Costs will include all expenses, costs or charges
which are allocable to the Term and are related to or incidental to any on-site
personnel employed in the operation of the Hotels (including, without
limitation, salaries, wages, other compensation, benefit contributions and
premiums, net of amounts paid by Hotel employees; stop-loss insurance premiums;
group health plan benefit payments in excess of contribution and premium amounts
paid by Hotel employees; pay for vacation, holidays, sick leave and other leaves
of absence; workers' compensation premiums; workers compensation benefit
payments paid by Manager; reasonable and customary administrative fees

                                      -33-
<PAGE>

and taxes; and severance benefits applicable under Manager's then current human
resources policies).

         (b) Manager shall comply with all Legal Requirements pertaining to
labor relations and the personnel employed by it pursuant to this Agreement.
Manager shall not enter into any written employment agreements with any person
which purport to bind the Owner without obtaining Owner's consent, which consent
may be withheld in Owner's sole and absolute discretion. If either Manager or
Owner shall be required, pursuant to any such Legal Requirement, to recognize a
labor union or to enter into collective bargaining with a labor union, the party
so required shall promptly notify the other. The terms of this Section 7.3(b)
shall survive the expiration or earlier termination of this Agreement.

         (c) No employee of the Hotels shall reside at the Hotels without the
prior written approval of Owner. No person shall be given gratuitous
accommodations or services without prior approval of Owner except in accordance
with usual practices of the Brand and the hotel and travel industry.

         (d) To the extent consistent with the applicable Yearly Budget,
Operating Cost may include up to $5,000 per Hotel, per Fiscal Year for travel
related expense of Manager's senior operational personnel in connection with
their visits to the Hotel. Said $5,000 shall be adjusted every January 1
starting in 2005 to reflect the percentage change in the Consumer Price Index
since the prior January 1.

         7.4 Sales, Marketing and Advertising. Manager shall and/or shall cause
its Affiliates to, commencing within a reasonable period of time after the
Effective Date:

         (a) advertise and promote the business of the Hotels;

         (b) institute and supervise a sales and marketing program for the
Hotels;

         (c) include the Hotels in Manager's and its Affiliates' Brand related
local, regional and worldwide promotional and advertising programs;

         (d) represent the Hotels through Manager's and its Affiliates'
worldwide sales offices;

         (e) include the Hotels in the Brand's loyalty program, including,
without limitation, inclusion of the Hotels in

                                      -34-
<PAGE>

promotional materials distributed to participants of such program;

         (f) coordinate the Hotels' participation in travel programs marketed by
airlines, travel agents and government tourist departments when Manager
determines such participation to be advisable; and

         (g) cause the Hotels to participate in sales and promotional campaigns
and activities involving complimentary rooms, food and beverages to bona fide
travel agents, tourist officials and airline representatives where Manager has
determined that such participation is in furtherance of the Hotels' business and
is customary in the travel industry or in the practices and policies of Manager.

         7.5 Reservation and Communication Services. The Hotels shall,
commencing within a reasonable period of time after the Effective Date, be
included as participating hotels on the Reservation System operated by Manager,
its Affiliates or agent(s) for the benefit of Candlewood Suites hotels from and
after the Effective Date. Manager will provide the following services to the
Hotels through the Reservation System:

         (a) acceptance of reservations for the Hotels through the Reservation
System from individual customers and groups who contact Manager (or its
Affiliates or agents) directly or through a regional reservation or sale office
of Manager or its Affiliates or agents;

         (b) acceptance of reservations for the Hotels through other hotels in
the Brand;

         (c) acceptance of reservations for the Hotels through the reservation
systems of other providers in the travel industry, including, without
limitation, global distribution systems and general sales agencies with which
Manager (or its Affiliates or agents) may have agreements from time to time,
whereby the reservation systems of such parties are available for communication
of reservations to hotels in the Brand;

         (d) acceptance of reservations for the Hotel received through
alternative communications channels such as the internet; and

         (e) access to the Hotels of the communications network used by Manager
(or its Affiliates or agents) for communication between it and hotels in the
Brand.

                                      -35-
<PAGE>

         7.6 Maintenance and Repairs. Subject to the terms hereof, Manager shall
promptly make or cause to be made all repairs, replacements, corrections,
maintenance, alterations, improvements, renovations, installations,
replacements, renewals and additions (collectively, "Repairs") 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)
necessary or appropriate to maintain the Hotels, including all private roadways,
sidewalks and curbs located thereon for which Owner, any Landlord or a Hotel has
responsibility, in good order and repair, reasonable wear and tear excepted
(whether or not the need for such Repairs occurs as a result of Owner's or
Manager's use, any prior use, the elements or the age of the Hotels, or any
portion thereof), and in conformity with Legal Requirements, Brand Standards and
the Operating Standards. All Repairs shall be made in a good, workmanlike
manner, consistent with Manager's and industry standards for like hotels in like
locales, in accordance with all applicable Legal Requirements. To the extent
such Repairs cannot be performed by Manager's on-site staff, Manager shall be
entitled to cause such repairs to be performed by third parties or, subject to
Owner's prior approval, Affiliates of Manager acting under separate Technical
Services Agreements pursuant to Section 11.1.

         7.7 Material Repairs.

         (a) Except as set forth in Section 7.7(b), prior to making any Material
Repair, Manager shall submit, to Owner in writing, a proposal setting forth, in
reasonable detail, the proposed Material Repair and shall provide to Owner such
plans and specifications, and such permits, licenses, contracts and such other
information concerning the same as Owner may reasonably request. Owner shall
have twenty (20) Business Days to approve or disapprove all materials submitted
to Owner, in connection with any such proposal; provided, however, (i) Owner may
not withhold its approval of a Material Repair with respect to such items as are
(A) required in order for the Hotels to comply with Brand Standards (except
during the last two (2) years of the Term as set forth in Section 5.2(a)) or
Operating Standards; or (B) required by reason of or under any Insurance
Requirement or Legal Requirement, or otherwise required for the continued safe
and orderly operation of each Hotel and (ii) Owner's approval shall not be
required with respect to the cost of any proposed Material Repair if the same is
set forth as a separate line item in the then applicable Capital Replacements
Budget. If Owner

                                      -36-
<PAGE>

fails to disapprove of such Material Repair within such twenty (20) Business
Days, Owner shall be deemed to have approved same.

         (b) In the event that a condition should exist in or about the Hotel of
an emergency nature or in violation of applicable Legal Requirements or
Insurance Requirements, including structural conditions, which requires
immediate repair necessary to prevent imminent danger or damage to persons or
property, Manager is hereby authorized to take all steps and to make all
expenditures necessary to repair and correct any such condition, regardless of
whether provisions have been made in the applicable Yearly Budget for any such
expenditures or if sufficient funds exist in the Reserve Accounts. Upon the
occurrence of such an event or condition, Manager will communicate to Owner all
available information regarding such event or condition as soon as reasonably
possible and will take reasonable steps to obtain Owner's approval before
incurring such expenses. Expenditures under this Section 7.7(b) shall be paid
from the Reserve Account or otherwise paid in accordance with Section 5.2(c) to
the extent such expenditure is properly considered a Capital Replacement.

         (c) No Capital Replacement shall be made which would tie-in or connect
a Hotel with any other improvements on property adjacent to such Hotel (and not
part of its Site) including, without limitation, tie-ins of buildings or other
structures or utilities (other than connections to public or private utilities)
without the prior written approval of Owner, which approval may be granted or
withheld in Owner' sole and absolute discretion.

         7.8 Liens; Credit. Manager shall use commercially reasonable efforts to
prevent any liens from being filed against any Hotel which arise from any
Repairs in or to such Hotels. Manager shall use commercially reasonable efforts
to cause the release of any such liens from the Hotels. If any such lien arises
as a result of or in connection with a Manager Default, then Manager shall bear
the cost of obtaining the lien release (exclusive of the cost of the Repair to
which it pertains, unless Manager is otherwise responsible therefor) and the
same shall not constitute an Operating Cost. In no event shall any party borrow
money in the name of, or pledge the credit of, any other party. Manager shall
not allow any lien to exist with respect to its interest in this Agreement.
Manager shall not finance the cost of any Repair by the granting of a lien on,
or security interest in, any Hotel or Manager's interest therein or hereunder.

                                      -37-
<PAGE>

         7.9 Real Estate and Personal Property Taxes. Manager shall pay as
Operating Costs, prior to delinquency, all taxes and assessments which may
become a lien on, or are assessed against, any Hotel or any component thereof
and which may be due and payable for the Term, unless payment thereof is being
contested by Manager, as hereinafter provided, enforcement is stayed and the
amount so contested is escrowed or guaranteed in a form satisfactory to Owner.
Owner shall, promptly after receipt thereof by Owner, give Manager copies of all
notices as to all such taxes and assessments. Manager, Landlords and Owner shall
use reasonable efforts to preserve and protect any special tax status and tax
attributes applicable to the Hotels.

         7.10 Contest. Manager shall have the right in Manager's or Owner's name
to contest or protest (a) any tax or assessment or proposed assessment which may
become a lien on, or be assessed against, any Hotel or any component thereof due
and for the Term or (b) any Legal Requirement payable, in each case by
appropriate legal proceedings, conducted in good faith and with due diligence
provided that (a) such contest shall not cause any Landlord or Owner to be in
default under any Authorized Mortgage, (b) no part of a Hotel nor any Gross
Revenues therefrom shall be in any immediate danger of sale, forfeiture,
attachment or loss, and (c) Owner and the Landlords are not exposed to any risk
for criminal or civil liability. The reasonable costs and expenses of any such
contest shall be an Operating Cost.

                                   ARTICLE 8

                                 FISCAL MATTERS

         8.1 Accounting Matters.

         (a) Manager shall maintain books and records reflecting the results of
Hotel operations on an accrual basis in accordance with the Uniform System of
Accounts and the Accounting Principles. In consideration thereof, Manager shall
be paid the accounting fee as provided in ARTICLE 8. Owner and Manager and their
respective independent accounting firms and representatives will have the right
to examine such books and records of the Hotel at any reasonable time and to
make and retain copies thereof. Manager shall retain, for at least three (3)
years after the expiration of each Fiscal Year, reasonably adequate records
showing Gross Revenues and applications thereof for the Hotels for such Fiscal
Year (which obligation shall survive termination hereof).

                                      -38-
<PAGE>

         (b) On or before the twenty-fifth (25th) day after the end of each
Fiscal Month, Manager shall furnish Owner with a detailed operating statements
setting forth the results of operations at the Hotels with respect to such month
showing for each Hotel, Gross Revenues, Rooms Revenues, revenue per available
room, occupancy percentage and average daily rate, Operating Costs, Operating
Profit, the applications and distributions thereof and its Owner's Percentage
Priority together with an Officer's Certificate. Such statements may be provided
electronically to Owner.

         (c) Not less than ten (10) days prior to the date on which Owner or any
of its Affiliates are required to file audited financial statements with the
United States Securities and Exchange Commission (but in all events on or before
February 15 of each year), Manager shall deliver to Owner and the Landlords an
Officer's Certificate (the "8.1(c) Statement") setting forth the totals for each
Hotel and for all of the Hotels of Gross Revenues and Operating Costs, the
calculation of Owner's Percentage Priority and the Residual Distribution and
deposits to, and expenditures from, the Reserve Account together with an Agreed
Upon Procedures Letter with respect thereto. The cost of obtaining such letter
shall be an Operating Cost.

         (d) If any amounts due to Owner as shown in an Officer's Certificate or
audit provided pursuant to Sections 8.1(f) or 17.4 exceed the amounts previously
paid with respect thereto to Owner, Manager shall pay such excess to Owner at
such time as the Officer's Certificate or audit is delivered, together with
interest at the Interest Rate from the date due. (Any such interest which
accrues after the day that is ten (10) Business Days after the date on which the
8.1(c) Statement is delivered and any such interest which results from Manager's
willful understatement of amounts due to Owner shall not be Operating Costs, but
shall be paid by Manager.) If Owner's Percentage Priority due as shown in an
Officer's Certificate or audit is less than the amount previously paid with
respect thereto to Owner, Owner shall be entitled to retain the same but shall
credit such overpayment against the next installment of Owner's Percentage
Priority. If any Management Fee due to Manager as shown on an Officer's
Certificate or audit is less than the amount previously paid to Manager on
account thereof, Manager shall, within ten (10) Business Days after the date on
which such Officer's Certificate or audit is delivered, deposit the overpayment
in the Bank Accounts. If the Residual Distribution due as shown on the Officer's
Certificate or audit is less than the amount previously paid to Owner with
respect thereto, Owner

                                      -39-
<PAGE>

shall promptly deposit (or deliver to Manager who will in turn deposit) the
overpayment in the Bank Accounts. In no event shall (i) any amount previously
deposited in the Reserve Account be withdrawn therefrom pursuant to this ARTICLE
8 or (ii) distributions of Owner's Fixed Priority be subject to adjustment.

         (e) In addition, Manager shall provide Owner with information relating
to the Hotels, Manager and its Affiliates that (i) may be required in order for
Owner or its Affiliates to prepare financial statements in accordance with
Accounting Principles, stock exchange rules or to comply with any legal
requirement including, without limitation, any applicable securities laws and
regulations and the United States Securities and Exchange Commission's
interpretation thereof, (ii) may be required for Owner or any of its Affiliates
to prepare federal, state or local tax returns, or (iii) is of the type that
Manager customarily prepares for other hotel owners or itself.

         (f) At Owner's election and at Owner's cost except as otherwise
provided herein, a certified audit of the Hotels' operations may be performed
annually, and after the Expiration Date, by a nationally recognized, independent
certified public accounting firm appointed by Owner. In the event that Owner
elects to have such an audit performed, Owner must give notice of its election
within twelve (12) months after its receipt of the applicable 8.1(c) Statement.
Any dispute concerning the correctness of an audit shall be settled by
Arbitration. Manager shall pay the cost of any audit revealing an understatement
of Owner's Percentage Priority and the Residual Distribution by more than three
percent (3%) in the aggregate, and such cost shall not be an Operating Cost. In
the event that either no notice of audit is given within said twelve (12)
months, or no audit is in fact commenced within eighteen (18) months after
receipt of the 8.1(c) Statement, such operating statement will constitute the
final statement for that Fiscal Year, deemed to have been approved by Owner.

         (g) The terms of this Section 8.1 shall survive the expiration or
earlier termination of the Term.

         8.2 Yearly Budgets.

         (a) Not less than sixty (60) days prior to the first day of each Fiscal
Year after the 2004 Fiscal Year, Manager shall submit to Owner for Owner's
approval a proposed Yearly Budget for each Hotel including a proposed Capital
Replacements Budget

                                      -40-
<PAGE>

for each Hotel for the ensuing full or partial Fiscal Year, as the case may be.
Owner's approval of the Yearly Budgets and the Capital Replacements Budgets
shall not be unreasonably withheld or delayed. If Owner fails to disapprove of a
proposed Yearly Budget within thirty (30) days after the submission thereof to
Owner for its approval, the same shall be deemed approved. Manager will, from
time to time not less often than quarterly, issue periodic forecasts of
operating performance to Owner reflecting any significant unanticipated changes,
variables or events or describing significant additional unanticipated items of
income or expense. Manager will provide Owner with the material data and
information utilized in preparing the Yearly Budgets and the Capital
Replacements Budgets or any revisions thereof. Manager will not be deemed to
have made any guaranty, warranty or representation whatsoever in connection with
the Yearly Budgets and the Capital Replacements Budgets, except that the
proposed Yearly Budgets, including the Capital Replacements Budgets, reflect
Manager's best professional estimates of the matters they describe. Manager
shall use its reasonable efforts, subject to the Operating Standards, to operate
and manage the Hotels in accordance with their Yearly Budgets.

         (b) In the event Owner disapproves or raises any objections to the
proposed Yearly Budget, or any portion thereof, or any revisions thereto, Owner
and Manager shall cooperate with each other in good faith to resolve the
disputed or objectionable items. If Owner disapproves of a proposed Yearly
Budget, Owner will disapprove on a specific line-by-line basis to the extent
reasonably practical. Any dispute with respect to a proposed Yearly Budget which
is not resolved by the parties within thirty (30) days after the submission
thereof to Owner shall be resolved by Arbitration.

         (c) In the event Owner and Manager are not able to resolve the disputed
or objectionable matters raised by Owner in regard to a Yearly Budget prior to
the commencement of the applicable Fiscal Year, either voluntarily or by means
of Arbitration, Manager is authorized to operate the Hotel in accordance with
the proposed Yearly Budget; provided, however, that as for disputed budget
items, Manager may not expend more than the previous year's budgeted amount for
such item (if any), increased by a percentage equal to the increase in the
Consumer Price Index during

                                      -41-
<PAGE>

the last year unless such expenditure is of the type contemplated under Section
7.7(b) or is for an expense (such as real estate taxes, insurance premiums or
utilities) which are beyond the Manager's reasonable control. For purposes of
this section, "increase in the Consumer Price Index during the last year" shall
mean the percentage increase in the Consumer Price Index for the twelve (12)
month period ending immediately prior to the date of submission of the disputed
proposed Yearly Budget.

         (d) Manager shall deliver to Owner, each month until January, 2005,
Manager's then most current financial forecast for the Hotels for the next 12
months, which forecasts shall be in Manager's and its Affiliates' customary
form. On or before March 31, 2004 Manager shall provide to Owner a
month-by-month schedule of the draws from the Reserve Account which Manager
anticipates to make during the 2004 and 2005 Fiscal Year in connection with the
Hotels. Manager shall periodically provide Owner with updates to such schedule
consistent with good management and construction practices.

         8.3 Bank Accounts.

         (a) The revenues of the Hotel shall be deposited into one or more Bank
Accounts. The Bank Accounts will be separate and distinct from any other
accounts, reserves or deposits required by this Agreement, and Manager's
designees who are included in the coverage of any required fidelity or similar
insurance will be the only parties authorized to draw upon any Bank Account;
provided, however, such designees shall only be authorized to draw upon a Bank
Account for purposes authorized by the terms of this Agreement.

         (b) So long as this Agreement is in full force and effect and there is
no uncured Manager Default, Manager shall have exclusive control of the Bank
Accounts. Nothing contained herein is to be construed as preventing Manager from
maintaining separate payroll accounts or petty cash funds and making payments
therefrom as the same may be customary in the hotel business or the Brand
Standards.

         8.4 Consolidated Financials. Each Ultimate Parent of Manager and each
Guarantor shall furnish to Owner within ten (10) days after the filing by such
Ultimate Parent or any Guarantor of any material filing with respect to the
securities of such Ultimate Parent or such Guarantor or any financial statement
with any governmental agency, quasi-governmental agency or stock exchange, a
copy of the same; provided, however, if a Guarantor or Ultimate Parent of
Manager is not required to file interim and annual financial statements with the
Securities and Exchange Commission or its equivalent in the United Kingdom,

                                      -42-
<PAGE>

such Guarantor or Ultimate Parent shall furnish the following statements to
Owner:

         (a) Within forty-five (45) days after each interim period for which
such Ultimate Parent or Guarantor prepares Consolidated Financials, the
Consolidated Financials of such Ultimate Parent or Guarantor for such period
accompanied by an Officer's Certificate; and

         (b) within ninety (90) days after each fiscal year of such Ultimate
Parent or Guarantor, the Consolidated Financials of such Ultimate Parent or such
Guarantor for such fiscal year audited by a firm of independent certified public
accountants reasonably satisfactory to Owner accompanied by an Officer's
Certificate.

                                   ARTICLE 9

                                FEES TO MANAGER

         9.1 Management Fees. As consideration for the management and operation
of the Hotel by Manager, Manager shall earn the following fees, which fees shall
be payable as provided in Section 10.1.

         (a) The Base Management Fee shall be paid in monthly installments in
arrears based on the Gross Revenues of the Hotels for the prior Fiscal Month.

         (b) The Incentive Management Fee shall be paid in monthly installments
in arrears. The Incentive Management Fee for any period less than a full twelve
(12) month Fiscal Year shall be paid on the basis of Gross Revenues for that
period.

         9.2 Services Fees. Manager shall pay, as Operating Costs, usual and
customary system fees and assessments on an area-wide basis for the systems of
hotels comprising the Brand. Not less frequently than annually, Manager shall
provide to Owner financial statements with respect to all fees comparable to the
Services Fees collected by Manager and its Affiliates and the applications
thereof. Manager covenants, warrants and agrees that all Services Fees shall be
applied to the cost of providing the services for which they are designated to
hotels in the Brand without profit to Manager or its Affiliates, except to the
extent that such profit for any year shall be applied to the cost of providing
such services in a subsequent year; provided, however, Manager and its
Affiliates shall not retain any such

                                      -43-
<PAGE>

profits for an unreasonable period of time. Any disputes under this Section 9.2
shall be resolved by Arbitration.

                                   ARTICLE 10

                                 DISBURSEMENTS

         10.1 Disbursement of Funds. As and when received by Manager or the
Hotels, all Gross Revenues from all of the Hotels shall be deposited into the
Bank Accounts and applied in the following order of priority to the extent
available:

         (a) First, to pay all Operating Costs;

         (b) Second, to fund the Reserve Account as required by Section 5.2 for
the previous Fiscal Month;

         (c) Third, to Owner, all accrued but unpaid Owner's First Priority (net
of amounts theretofore paid from Operating Profits by Manager on behalf of Owner
on account of debt service due under an Authorized Mortgage as provided in
Section 4.3(c));

         (d) Fourth, to (i) reimburse Manager for any amounts advanced by
Manager pursuant to Section 5.2(d) together with interest on the outstanding
amounts thereof at the Interest Rate (determined as of the date of the
applicable advance) and (ii) pay for Capital Replacements which Owner failed to
timely fund pursuant to Section 5.2(c).

         (e) Fifth, to fund the Reserve Account to the extent that the aggregate
amounts previously funded for prior periods is less than the amount required to
be funded for such periods pursuant to the terms of Section 5.2;

         (f) Sixth, to Manager, interest at the Interest Rate (determined as of
the date of the applicable advance) on any outstanding amounts advanced by
Manager pursuant to Section 15.2(c).

         (g) Seventh, to Manager, any accrued but unpaid First Management Fee
for the Fiscal Year to which such Gross Revenues pertain but not for any other
period;

         (h) Eighth, to Owner, all accrued but unpaid Owner's Second Priority
for the Fiscal Year to which such Gross Revenues pertain but not for any other
period;

                                      -44-
<PAGE>

         (i) Ninth, to Manager, all accrued but unpaid Second Management Fee for
the Fiscal Year to which such Gross Revenues pertain but not for any other
period;

         (j) Tenth (commencing in 2007), to Owner all accrued but unpaid Owner's
Percentage Priority;

         (k) Eleventh, to reimburse Owner for any advances made by Owner to
Working Capital;

         (l) Twelfth, to reimburse Manager for any advances made by Manager to
Working Capital in excess of the Initial Working Capital;

         (m) Thirteenth, to reimburse Manager for (i) advances made by Manager
pursuant to and in the amount provided in Section 15.2(c) to the extent then due
and payable and (ii) other contributions made by it to the Reserve Account other
than pursuant to Section 5.2(d);

         (n) Fourteenth, to reimburse the Guarantor for payments made by it on
account of the Guaranteed Obligations under the Guaranty, provided, however, if
the Guarantor shall have Provided Collateral under the Guaranty, then the amount
to be reimbursed to the Guarantor under this Section 10.1(n) shall be disbursed
to Owner, to be held by Owner as collateral for the Guarantor's obligations
under the Guaranty until the Outstanding Balance (determined as though the
disbursement made under this Section 10.1(n) were made to the Guarantor) under
the Guaranty does not exceed the sum of (i) the then remaining balance drawable
under the Satisfactory Letter of Credit posted under the Guaranty or the balance
of the cash deposited by the Guarantor thereunder; plus (ii) proceeds of any
such Satisfactory Letter of Credit or cash deposited thereunder, in either case,
applied to the Guaranteed Obligations thereunder;

         (o) Fifteenth, to Owner, all accrued but unpaid Owner's Second Priority
for prior periods;

         (p) Sixteenth, to pay Manager accrued but unpaid Base Management Fees
for prior periods; and

         (q) Seventeenth, to Manager, the Incentive Management Fee.

         10.2 Residual Distribution. Simultaneously with the making of each
payment of the Incentive Management Fee, the then remaining Gross Revenues will
be disbursed to Owner. Except as herein provided, Manager shall have no
responsibility to incur

                                      -45-
<PAGE>

Operating Costs or undertake any Capital Replacement except to the extent
Manager is reasonably assured that funds to pay such Operating Costs and for
such Capital Replacements will be timely available.

         10.3 Owner's First Priority. Owner's First Priority shall be due and
payable in advance in equal monthly installments on the first day of each Fiscal
Month, pro-rated for any partial month, regardless of any inadequacy of Gross
Revenues or Operating Profits. If any installment of Owner's First Priority is
not paid when due, the same shall accrue interest at the Interest Rate. (Such
interest shall be payable on demand, shall not be an Operating Cost, and shall
be paid by Manager.) Appropriate adjustments shall be made to reflect any change
in Owner's First Priority on account of advances made by Owner or any Landlord
on the first Business Day of the month next after the date as of which such
change occurs. As installments of Owner's First Priority are to be paid in
advance, Manager may advance amounts due on account of a monthly installment of
Owner's First Priority for a Fiscal Month and reimburse itself from Operating
Profits for such Fiscal Month amounts so advanced; provided, however, if
Operating Profits for such Fiscal Month in excess of the amount to be
contributed to the Reserve Account pursuant to Section 5.2 are insufficient to
make such reimbursements, the amount of such insufficiency shall be deemed an
advance to Working Capital, and Manager shall be entitled to the reimbursement
thereof only pursuant to Section 10.1(l); provided, however, by notice given to
Owner within thirty (30) days after the end of such Fiscal Month, Manager may
elect to deem the amount of such insufficiency an advance under the Guaranty
(and not an advance to Working Capital). If Owner fails to receive any
installment of Owner's First Priority as and when due, Owner may terminate this
Agreement on not less than thirty (30) days' notice; provided, however, such
notice shall be void ab initio if such installment together with any interest
accrued thereon is paid to Owner prior to the thirtieth (30th) day after such
notice is given.

         10.4 Owner's Percentage Priority. Owner's Percentage Priority shall be
calculated on a Hotel-by-Hotel basis, and shall accrue and be payable in monthly
installments to the extent that Gross Revenues year-to-date at any Hotel exceed
Gross Revenues for such Hotel for the corresponding period in its Base Year. The
installment of Owner's Percentage Priority for each Fiscal Month shall be due
and payable on the twenty fifth (25th) day of the following month.

                                      -46-
<PAGE>

         10.5 Owner's Second Priority. Owner's Second Priority shall accrue in
equal monthly installments on the first day of each Fiscal Month, pro-rated for
any partial month and shall be paid as provided in Section 10.1; provided,
however, all accrued and unpaid Owner's Second Priority shall be due and payable
upon the expiration or earlier termination of the Term.

         10.6 No Interest. Except as expressly provided herein, no interest
shall accrue or be payable to either party hereunder on account of any amount
owed to such party hereunder.

         10.7 Amounts Outstanding at End of Term. Unless this Agreement is
wrongfully terminated by Owner, upon the expiration or earlier termination of
this Agreement, Manager shall have no claim against Owner, the Landlords or the
Hotels for amounts owed to it under this Agreement which have not been paid by
reason of the inadequacy of Gross Revenues or Operating Profits.

         10.8 Calculations. Subject to the terms of Sections 8.1(d) and 10.4,
all distributions of Operating Profits shall be calculated on a Fiscal Year
basis and be subject to being "trued-up" as provided in Section 8.1(d).

         10.9 Survival. The terms of this ARTICLE 10 shall survive the
expiration or earlier termination of the Term.

                                   ARTICLE 11

                             CERTAIN OTHER SERVICES

         11.1 Optional Services. Owner acknowledges that Manager and its
Affiliates sometimes provide separate, optional services which may relate to the
Hotels in addition to those which are encompassed by this Agreement. Owner
agrees to consider in good faith any proposals presented to it by Manager or any
of Manager's Affiliates for such additional services relative to the Hotels; it
being understood, however that this Section shall in no event be construed to
require Owner to accept any such proposals.

         11.2 Purchasing. In making purchasing decisions with respect to
products and services used in the operation of the Hotels, Manager will exercise
reasonable business judgment in accordance with the Operating Standards. Manager
shall be entitled to contract with its Affiliates, others in whom Manager or its
Affiliates has an ownership interest and others with whom Manager or its
Affiliates have contractual relationships to

                                      -47-
<PAGE>

provide goods and/or services to the Hotels; provided that the prices and/or
terms for such goods and/or services are competitive and no worse than the
prices and/or terms that such provider charges unrelated third-parties. In
determining whether such prices and/or terms are so competitive, they will be
compared to the prices and/or terms which are available from comparably
qualified providers for goods and/or services of similar quality grouped in
reasonable categories, rather than being compared item by item. Subject to the
foregoing proviso, the prices charged for such goods or services may include
overhead and the allowance of a reasonable return to the provider. Subject to
the foregoing proviso, Owner acknowledges and agrees that the providers of such
goods and/or services may retain for their own benefit any credits, rebates or
commissions received with respect to such purchases. Notwithstanding anything
contained herein to the contrary, Manager will act in a manner that enables
Owner and the Hotels to gain not less than the same benefits with respect to
purchasing as are made available to other hotels of the same category as the
Hotels which other hotels are owned or operated by Manager or its Affiliates.
Disputes under this Section 11.2 shall be resolved by Arbitration.

                                   ARTICLE 12

                            SIGNS AND SERVICE MARKS

         12.1 Signs. To the extent not in place on the Effective Date, Manager
agrees to erect and install, in accordance with all applicable Legal
Requirements, all necessary signs under the Brand Standards.

         12.2 System Marks. It is understood and agreed by Owner that the name
Candlewood Suites and all System Marks are the exclusive property of Manager or
its Affiliates. Owner agrees and acknowledges the exclusive right of ownership
of Manager and its Affiliates to the System Marks and the Reservation System.
Except for any rights expressly granted to Owner in this Agreement, Owner hereby
disclaims any right or interest therein, regardless of the legal protection
afforded thereto. Except for any rights expressly granted to Owner in this
Agreement, in the event of termination or cancellation of this Agreement,
whether as a result of a default by Manager or otherwise, Owner shall not hold
itself out as, or operate the Hotels as, a Candlewood Suites hotels, and will
immediately cease using the name Candlewood Suites, and all other System Marks,
in connection with the name or operation of the Hotel, as of the Expiration

                                      -48-
<PAGE>

Date. Promptly after the Expiration Date (or such later date on which Manager
shall cease to operate the Hotels) and the expiration of any right granted to
Owner to use the System Marks, subject to the terms of Section 17.4, Owner shall
remove all signs, furnishings, printed material, emblems, slogans or other
distinguishing characteristics which are now or hereafter may be connected or
identified with the Brand or Reservation System. Owner shall not use any System
Marks or any part, combination or variation thereof in the name of any
partnership, corporation or other business entity, nor allow the use thereof by
others.

         12.3 System Mark Litigation.

         (a) Manager, IHG and each other Guarantor shall hold Owner and its
Affiliates harmless from and indemnify and defend Owner and its Affiliates
against any and all costs and expenses incurred by Owner or its Affiliates
(including, without limitation, attorneys' fees reasonably incurred), arising
out of the use of System Marks at or in connection with the operation of the
Hotels by Owner or its designees pursuant to the terms of this Agreement or by
Manager or its Affiliates.

         (b) In the event a Hotel, Owner or Manager is the subject of any
litigation or action brought by any party seeking to claim rights in or to
restrain the use of any System Mark used by Manager in connection with the
Hotel, then, provided Owner is a party to such litigation or action and further
provided that Manager shall have provided to Owner either a guaranty in form and
substance reasonably satisfactory to Owner with respect to Manager's obligations
under Section 12.3(a) or collateral to secure Manager's obligations under
Section 12.3(a) reasonably satisfactory to Owner, the conduct of any suit
whether brought by Manager or instituted against Owner and/or Manager shall be
under the absolute control of counsel nominated and retained by Manager
notwithstanding that Manager may not be a party to such suit.

         (c) The Owner shall not bring suit against any user of any System Mark
alleging or asserting any claim based on Owner's right, title or interest as of
the Effective Date in any System Mark.

         (d) The terms of this Section 12.3 shall survive the expiration or
earlier termination of this Agreement.

                                      -49-
<PAGE>

                                   ARTICLE 13

                                   INSURANCE

         13.1 Insurance Coverage. Unless Owner elects to procure and maintain
the insurance required hereunder, as an Operating Cost, which election may be
made from time to time and withdrawn from time to time on not less than thirty
(30) days' notice, to the extent commercially available (regardless of whether
it is available on reasonable terms) Manager shall procure and maintain as an
Operating Cost, at all times during the Term or while it is in possession of any
of the Hotels, reasonable and adequate amounts of casualty, liability and other
usual and customary types of insurance for the Hotels and their operations.
Without limiting the generality of the foregoing, Manager shall obtain and
maintain, with insurance companies of recognized responsibility a minimum of the
following insurance to the extent commercially available (regardless of whether
it is available on reasonable terms):

         (a) "Special Form" property insurance, including insurance against loss
or damage by fire, vandalism and malicious mischief, terrorism (if available on
commercially reasonable terms), earthquake, explosion of steam boilers, pressure
vessels or other similar apparatus, now or hereafter installed in the Hotels,
with equivalent coverage as that provided by the usual extended coverage
endorsements, in an amount equal to one hundred percent (100%) of the then full
replacement cost of the property requiring replacement (excluding foundations)
from time to time, including an increased cost of construction endorsement;

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

         (c) Commercial general liability insurance, including bodily injury and
property damage (on an occurrence basis and on a 1993 ISO CGL form or on a form
customarily maintained by similarly situated hotels, including, without
limitation, broad form contractual liability, independent contractor's hazard
and

                                      -50-
<PAGE>

completed operations coverage, aggregate limit as applicable) in an amount not
less than Two Million Dollars ($2,000,000) per occurrence and umbrella coverage
of all such claims in an amount not less than Fifty Million Dollars
($50,000,000) per occurrence;

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

         (e) Worker's compensation insurance coverage for all persons employed
by Manager at the Hotels with statutory limits and otherwise with limits of and
provisions in accordance with the requirements of applicable local, state and
federal law, and employer's liability insurance as is customarily carried by
similar employers which coverage shall be written by an insurance company of
recognized responsibility, as a qualified self-insurer subject to applicable
state requirements and approvals, or specific to the State of Texas, as a
nonsubscriber;

         (f) Employment practices liability insurance with limits of Twenty Five
Million Dollars ($25,000,000); and

         (g) Such additional insurance as may be required, from time to time by
(i) any Legal Requirement, (ii) any holder of an Authorized Mortgage or (iii)
which is otherwise reasonably required.

         13.2 Insurance Policies.

         (a) All insurance provided for under this ARTICLE 13 must be effected
by policies issued by insurance companies of good reputation and of sound
financial responsibility and will be subject to Owner's reasonable approval.

         (b) All insurance policies (other than workers' compensation policies)
shall be issued in the name of the Landlords with Manager and Owner and any
holder of an Authorized Mortgage being named as additional insureds; provided,
however, subject to Owner's obligations under ARTICLE 15, Manager shall

                                      -51-
<PAGE>

not be named as an additional insured on, and shall not have any interest in the
proceeds of, any property insurance. The Landlords or the holder of an
Authorized Mortgage shall be named loss payee(s) on any property insurance.

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

         (d) In the event Owner or Manager believes that the then full
replacement cost of a Hotel 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 written
notice thereof to the other parties. The determination of such appraiser shall
be final and binding on the parties hereto until any subsequent determination
under this Section 13.2(d), and the party with the obligation to maintain
insurance hereunder shall forthwith conform the amount of the insurance carried
to the amount so determined by the appraiser. Such replacement value
determination will not be necessary so long as a Hotel is insured through a
blanket replacement value policy.

         (e) All insurance policies and endorsements required pursuant to this
ARTICLE 13 shall be fully paid for, nonassessable and, except for umbrella,
worker's compensation, flood and earthquake coverage, shall be issued by
insurance carriers authorized to do business in the state where each Hotel is
located, having a general policy holder's rating of no less than B++ in Best's
latest rating guide.

         (f) All such policies shall provide Owner, Manager and any holder of an
Authorized Mortgage if required by the same, thirty (30) days' prior written
notice of any material change or cancellation of such policy and the property
insurance policies shall provide for a waiver of subrogation, to the extent
available.

         13.3 Insurance Certificates. Manager shall deliver to Owner, the
Landlords and any holder of an Authorized Mortgage, certificates of insurance
with respect to all policies so

                                      -52-
<PAGE>

procured by it and, in the case of insurance policies about to expire, shall
deliver certificates with respect to the renewal thereof. In the event Manager
shall fail to effect such insurance as herein required, to pay the premiums
therefor, or to deliver, within fifteen (15) days of a request therefor, such
certificates, Owner shall have the right, but not the obligation, to acquire
such insurance and pay the premiums therefor, which amounts shall be payable to
Owner, upon demand, as an Operating Cost, together with interest accrued thereon
at the Interest Rate (which interest shall not be an Operating Cost, but shall
be paid by Manager) from the date such payment is made until (but excluding) the
date repaid.

         13.4 Insurance Proceeds. All proceeds payable by reason of any loss or
damage to a Hotel, or any portion thereof (other than the proceeds of any
business interruption or similar insurance which are a portion of Gross
Revenues), shall be paid directly to the applicable Landlord as its interest may
appear and all loss adjustments with respect to losses payable to Manager shall
require the prior written consent of the Landlords.

         13.5 Manager's Insurance Program.

         (a) Manager will obtain quotations for insurance on an annual basis and
provide, when available, such quotations to Owner for its approval or rejection.
If Owner rejects such quotations, it may obtain such insurance and thereafter
Owner shall maintain, as an Operating Cost, the insurance the quotation for
which Owner rejected.

         (b) Owner acknowledges that in the event the insurance required
hereunder is provided through Manager's insurance program, to the extent
available, the costs and charges therefor will be paid as an Operating Cost
without regard to whether such payment is to an Affiliate of Manager and whether
that Affiliate receives a profit as a result thereof.

                                   ARTICLE 14

                   INDEMNIFICATION AND WAIVER OF SUBROGATION

         14.1 Indemnification. Each of the parties hereto shall indemnify,
defend and hold harmless the other for, from and against any cost, loss, damage
or expense (including, but not limited to, reasonable attorneys fees and all
court costs and other expenses of litigation, whether or not taxable under local

                                      -53-
<PAGE>

law) to the extent caused by or arising from: the failure of the indemnifying
party to duly and punctually perform any of its obligations owed to the other;
or any gross negligence or willful misconduct of the indemnifying party.

         14.2 Waiver of Subrogation. To the fullest extent permitted by law,
each of Owner and Manager hereby waives any and all rights of subrogation and
right of recovery or cause of action, and agrees to release the other and the
Landlords from liability for loss or damage to property to the extent such loss
or damage is covered by valid and collectible insurance in effect at the time of
such loss or damage or which would have been covered if the insurance required
by this Agreement were being carried; provided, however, that such waiver shall
be of no force or effect if the party benefiting therefrom fails to obtain and
maintain the insurance required to be obtained and maintained by it. Such
waivers are in addition to, and not in limitation or derogation of, any other
waiver or release contained in this Agreement. Written notice of the terms of
the above waivers shall be given to the insurance carriers of Owner and Manager,
and the insurance policies shall be properly endorsed, if necessary, to prevent
the invalidation of said policies by reason of such waivers.

         14.3 Survival. The terms of this ARTICLE 14 shall survive the
expiration or earlier termination of this Agreement.

                                   ARTICLE 15

                     DAMAGE TO AND DESTRUCTION OF THE HOTEL

         15.1 Termination.

         (a) If during the Term any Hotel shall be totally or partially
destroyed and the Hotel is thereby rendered Unsuitable for Its Permitted Use,
(i) Manager may terminate this Agreement with respect to such Hotel on sixty
(60) days' written notice to Owner, or (ii) Owner may terminate this Agreement
with respect to such Hotel by written notice to Manager, whereupon, this
Agreement, with respect to such Hotel, shall terminate and Owner or the
applicable Landlord shall be entitled to retain the insurance proceeds payable
on account of such damage.

         (b) Notwithstanding any provisions of Section 15.2 below to the
contrary, if damage to or destruction of any Hotel occurs during the last twenty
four (24) months of the then Term (after giving effect to any exercised options
to extend the same) and

                                      -54-
<PAGE>

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
such Term, then either Owner or Manager may terminate this Agreement with
respect to such Hotel on not less than thirty (30) days' advance notice.

         (c) Upon any termination under this ARTICLE 15 or ARTICLE 16, the
Owner's First Priority and Owner's Second Priority shall each be reduced
proportionately so that after giving effect to such reduction the ratio of
Owner's Fixed Priority to the NOI of the Hotels (other than the Hotel with
respect to which this Agreement has been so terminated) for the most recently
ended twelve (12) months as of the date of the casualty or Condemnation equals
the ratio of Owner's Fixed Priority before such reduction to the NOI of all the
Hotels (including, the Hotel with respect to which this Agreement has been
terminated) for such period.

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

         15.2 Restoration.

         (a) If during the Term any Hotel is damaged or destroyed by fire,
casualty or other cause but is not rendered Unsuitable for Its Permitted Use,
Owner shall make the net proceeds of insurance received in connection with such
casualty (excluding the proceeds of business interruption or similar insurance
which are a portion of Gross Revenues) and any other amount Owner elects to
contribute toward restoration available to Manager for restoration of such Hotel
subject to customary terms applicable to advances and construction loans (to the
extent applicable) and the terms of the Leases and any Authorized Mortgage, and
Owner shall make, or shall cause there to be made, all Repairs necessary to
restore such Hotel to substantially the same condition as existed prior to such
casualty. If Owner elects to retain Manager's services in connection with such
Repairs, the terms of Section 11.1 shall apply.

         (b) Any casualty which does not result in a termination of this
Agreement with respect to the applicable Hotel shall not excuse the payment of
sums due to Owner hereunder with respect to such Hotel.

         (c) If the net proceeds of the insurance received in connection with a
casualty or an Award received in connection

                                      -55-
<PAGE>

with a Condemnation are insufficient to complete the required Repairs, Owner
shall have the right (but not the obligation) to contribute (or cause the
Landlords to contribute) the amount of such insufficiency. If Owner elects not
to contribute such insufficiency by notice given to Manager within ten (10)
Business Days after a notice given by Manager to Owner reasonably detailing the
existence of such insufficiency, Manager shall have the right, but not the
obligation, to contribute such insufficiency. If Manager fails to contribute
such insufficiency to an account of Owner to be used in completing such Repairs
within ten (10) Business Days after Owner's election, the Hotel subject to such
casualty or Condemnation shall be deemed Unsuitable for its Permitted Use and
the terms of Section 15.1 or 16.1, as applicable, shall apply. Subject to the
terms of Section 10.1, Manager shall be entitled to the return of amounts funded
by it under this Section 15.2(c) in equal monthly installments based upon the
number of months remaining in the Term after the month in which such advance is
made (after giving effect to any then exercised or deemed exercised options to
extend).

                                   ARTICLE 16

                                  CONDEMNATION

         16.1 Total Condemnation. If either (x) the whole of a Hotel shall be
taken by Condemnation, or (y) a Condemnation of less than the whole of a Hotel
renders such Hotel Unsuitable for Its Permitted Use, this Agreement shall
terminate with respect to such Hotel and Owner and Master Landlord or the
Overland Landlord, as the case may be, shall seek the Award for their interests
in such Hotel as provided in the Leases, which Award shall belong solely to
them. In addition, Manager shall have the right to initiate or participate in
such proceedings as it deems advisable to recover any damages to which Manager
may be entitled; provided, however, that Manager shall be entitled to retain the
award or compensation it may obtain through such proceedings which are conducted
separately from those of Owner and such Landlord only if such award or
compensation does not reduce the award or compensation otherwise available to
Owner and such Landlord. If this Agreement is so terminated with respect to a
Hotel, Owner and such Landlord shall make reasonable efforts to use the Award to
acquire a Replacement Property proposed by Manager to which this Agreement shall
be extended; provided, however:

                                      -56-
<PAGE>

         (a) Such Landlord and Owner shall not be obligated to expend in the
aggregate more than the Award in connection with (i) investigating and
negotiating to purchase all properties proposed by Manager to be the Replacement
Property (including, without limitation, attorneys' and consultants' fees and
title search and survey costs) and (ii) acquiring a Replacement Property
(including, without limitation, the purchase price therefor, title insurance
premiums and transfer taxes);

         (b) Such Landlord and Owner shall have no obligation to acquire any
proposed Replacement Property unless the projected NOI thereof and each of every
other aspect of the proposed Replacement Property which such Landlord reasonably
considers relevant is comparable in such Landlord's sole judgment in all respect
to the Hotel which is being replaced;

         (c) Such Landlord and Owner shall not be obligated to investigate more
than three (3) proposed properties;

         (d) Owner's Fixed Priority will be increased by an amount equal to the
reduction therein resulting from the termination of this Agreement with respect
to the Hotel which is being replaced; and

         (e) Such Landlord shall not be obligated to acquire any proposed
Replacement Property, if Manager and Owner do not reasonably agree upon an
appropriate amendment hereto pursuant to which this Agreement will be extended
to such property.

If such Landlord decides to acquire a proposed Replacement Property,
simultaneously with such acquisition its Lease and this Agreement shall be
appropriately amended so as to cover such Replacement Property.

         16.2 Partial Condemnation. In the event of a Condemnation of less than
the whole of a Hotel such that such Hotel is not rendered Unsuitable for Its
Permitted Use, Owner shall, to the extent of the Award and any additional
amounts disbursed by Owner or the applicable Landlord, commence promptly and
continue diligently to restore the untaken portion of such Hotel so that such
Hotel shall constitute a complete architectural unit of the same general
character and condition (as nearly as may be possible under the circumstances)
as existed immediately prior to such Condemnation, in full compliance with all
Legal Requirements, using the Award made available therefor and any other funds
Owner elects to contribute subject to customary terms applicable to advances of
construction loans (to the

                                      -57-
<PAGE>

extent applicable). If Owner elects to retain Manager's services in connection
therewith, the terms of Section 11.1 shall apply.

16.3 Temporary Condemnation. In the event of any temporary Condemnation of a
Hotel or Owner's interest therein, this Agreement shall continue in full force
and effect. The entire amount of any Award made for such temporary Condemnation
allocable to the Term, whether paid by way of damages, rent or otherwise, shall
constitute Gross Revenues. For purposes of this Agreement, a Condemnation shall
be deemed to be temporary if the period of such Condemnation is not expected to,
and does not, exceed twelve (12) months.

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

                                   ARTICLE 17

                            DEFAULT AND TERMINATION

         17.1 Manager Events of Default. Each of the following shall constitute
a "Manager Event of Default":

         (a) The filing by Manager, or the Guarantor, of a voluntary petition in
bankruptcy or insolvency or a petition for reorganization under any bankruptcy
law, or the admission by Manager or the Guarantor, that it is unable to pay its
debts as they become due, or the institution of any proceeding by Manager or the
Guarantor for its dissolution or earlier termination.

         (b) The consent by Manager, or the Guarantor, to an involuntary
petition in bankruptcy or the failure to vacate, within ninety (90) days from
the date of entry thereof, any order approving an involuntary petition with
respect to Manager or the Guarantor.

         (c) The entering of an order, judgment or decree by any court of
competent jurisdiction, on the application of a creditor, adjudicating Manager
or the Guarantor as bankrupt or insolvent or approving a petition seeking
reorganization or appointing a receiver, trustee, or liquidator of all or a
substantial part of Manager's or the Guarantor's assets, and

                                      -58-
<PAGE>

such order, judgment or decree's continuing unstayed and in effect for an
aggregate of sixty (60) days (whether or not consecutive).

         (d) The failure of Manager or the Guarantor or any Affiliate of any of
them to make any payment required to be made in accordance with the terms of
this Agreement or any Transaction Document which failure continues beyond any
applicable notice and grace period.

         (e) The failure of Manager, its Ultimate Parent, the Collateral Agent
or any Guarantor or any Affiliate of any of them to perform, keep or fulfill any
of the other covenants, undertakings, obligations or conditions set forth in
this Agreement or any Transaction Document on or before the date required for
the same, which failure continues for a period of thirty (30) days after receipt
of written notice demanding such cure; provided, however, if such failure is
susceptible of cure, but such cure cannot be accomplished within said thirty
(30) day period, said thirty (30) days shall be extended for so long as is
reasonably necessary to effect such cure provided that such cure is commenced
within thirty (30) days after such notice is given and is thereafter diligently
pursued to completion.

         (f) The failure of Manager to maintain insurance coverages required to
be maintained by Manager under this Agreement.

         (g) The failure by Manager, its Ultimate Parent or any Guarantor to
deliver to Owner any financial statement as and when required by the Transaction
Documents, which failure continues for a period of ten (10) Business Days after
written notice from Owner.

         (h) Any representation or warranty made by Manager or any of its
Affiliates in this Agreement or any Transaction Document proves to have been
false in any material respect on the date when made or deemed made; provided,
however, if Manager did not know of such falseness at the time such
representation or warranty was made, and the facts or circumstances giving rise
to such falseness are susceptible of cure, Manager shall have up to thirty (30)
days after notice from Owner to effectuate such cure.

         (i) The failure of any Ultimate Parent of Manager or the Guarantor to
timely and fully keep and observe any obligations under the Transaction
Documents or any other document or instrument executed and delivered in
connection herewith to

                                      -59-
<PAGE>

maintain any net worth or unencumbered assets or to deliver any collateral, in
all cases required under the Transaction Documents, which is not cured within
ten (10) days after notice from Owner to Manager.

         17.2 Remedies for Manager Defaults. So long as a Manager Event of
Default shall be outstanding, Owner shall have (in addition to its other rights
and remedies at law, in equity or otherwise) the right to terminate this
Agreement. Upon such termination, or if this Agreement is terminated pursuant to
Sections 5.1 or 10.3, Owner shall be entitled to liquidated damages. Owner's
right to receive liquidated damages has been agreed to due to the uncertainty,
difficulty and/or impossibility of ascertaining the actual damages suffered by
Owner. Further, if not for Owner's right to receive such liquidated damages, the
Landlords would not have terminated a certain lease with respect to the Original
Hotels or acquired Additional Hotels and Owner would not have entered into the
Leases. MANAGER HEREBY ACKNOWLEDGES AND AGREES THAT SUCH LIQUIDATED DAMAGES ARE
NOT A PENALTY, BUT ARE TO COMPENSATE OWNER AND ITS AFFILIATES FOR THE EXPENSE
AND LOST EARNINGS WHICH MAY RESULT FROM ARRANGING SUBSTITUTE MANAGEMENT FOR THE
HOTELS AS WELL AS TO COMPENSATE FOR THE RENT OWNER MUST PAY UNDER THE LEASES AND
THE PRICE PAID FOR THE HOTELS BY OWNER'S AFFILIATES. Such liquidated damages
shall be equal to the sum of (i) Fifty Million Dollars ($50,000,000) less (ii)
the aggregate amount paid by the Guarantor under Section 3 of the Guaranty in
excess of any amounts reimbursed to the Guarantor pursuant to the terms hereof.
Owner shall be entitled to interest, at the Interest Rate, on such liquidated
damages from the date of such termination until the date of payment of such
damages and interest. Except with respect to Owner's rights and remedies for any
breach or violations by Manager of the terms of Section 17.4, Owner shall look
solely to any collateral hereafter pledged securing Manager's obligations
hereunder for satisfaction of any claim of Owner against Manager hereunder;
provided, however, nothing contained herein is intended to, nor shall, limit or
reduce the obligations of the Guarantor under the Guaranty or limit Owner's
rights with respect thereto so long as Guarantor's obligation under Section 3
thereof has not been terminated in accordance with the terms of the Guaranty.

         17.3 Owner Events of Default and Remedies for Owner Defaults. In the
event any representation or warranty made by Owner in this Agreement proves to
be untrue when made in any material respect or Owner fails to perform its
obligations hereunder, Manager shall have the right to institute forthwith

                                      -60-
<PAGE>

any and all proceedings permitted by law or equity (provided they are not
specifically barred under the terms of this Agreement), including, without
limitation, actions for specific performance and/or damages; provided, however,
except as may be expressly provided in this Agreement, Manager shall have no
right to terminate this Agreement by reason of such a failure by Owner or
otherwise. Manager shall be entitled to terminate this Agreement in the event of
a violation of the terms of Section 4.7 by either of the Landlords or by Owner.
Except as otherwise specifically provided in this Agreement, Manager 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 any Hotel or any portion thereof, or (b) to
obtain (i) any abatement, reduction, suspension or deferment of the sums
allocable or otherwise payable to Owner or other obligations to be performed by
Manager hereunder or (ii) any increase in any amounts payable to Manager
hereunder. The obligations of each party hereunder shall be separate and
independent covenants and agreements.

         17.4 Post Termination Obligations. Upon expiration or earlier
termination of this Agreement for any reason, Owner and Manager shall proceed as
follows:

         (a) Within sixty (60) days following the effective date of such
expiration or earlier termination, Manager will submit to Owner an audited final
accounting of the results of Hotel operations and all accounts between Owner and
Manager through the effective date of such expiration or earlier termination,
the cost of which audit shall be shared equally by Manager and Owner and shall
not be an Operating Cost and shall be performed by Ernst & Young or another
accounting firm selected by Manager and approved by Owner. Said final accounting
will promptly be submitted by Manager to Owner for its approval. Owner shall not
unreasonably withhold or delay its approval of the final accounting and any such
disapproval shall contain reasonably detailed explanations for disapproval.
Within thirty (30) days after delivery of such final accounting, the parties
will make appropriate adjustments to any amounts previously paid or due under
this Agreement.

         (b) On the effective date of such expiration or earlier termination,
Manager will deliver to Owner all books and records of the Hotels, provided that
Manager may retain copies of any of the same for Manager's records.
Notwithstanding the foregoing, Manager will not be required to deliver to Owner
any information

                                      -61-
<PAGE>

or materials (including, without limitation, software, database, manuals and
technical information) which are proprietary property of Manager.

         (c) On the effective date of such expiration or earlier termination,
Manager will deliver possession of the Hotels, together with any and all keys or
other access devices, to Owner.

         (d) On the effective date of such expiration or earlier termination,
Manager will assign to Owner or its designee, and Owner or such designee will
assume, all booking, reservation, service and operating contracts relating
exclusively to the occupancy or operation of the Hotels and entered into in the
ordinary course of business by Manager in accordance with this Agreement. Owner
agrees to indemnify and hold Manager harmless from liability or other
obligations under any such agreements relating to acts or occurrences, including
Owner's or such designee's failure to perform, on or after the effective date of
such assignment.

         (e) Manager will assign to Owner or its designee any assignable
licenses and permits pertaining to the Hotels and will otherwise reasonably
cooperate with Owner as may be necessary for the transfer of any and all Hotel
licenses and permits to Owner or Owner's designee.

         (f) Manager shall release and transfer to Owner or the Landlords, as
applicable, any funds of Owner or the Landlords which are held or controlled by
Manager.

         (g) Manager shall have the option, to be exercised within thirty (30)
days after termination or expiration, to purchase, at their then book value, any
FF&E, Operating Equipment or other personal property as may be marked with any
System Mark at the Hotels. In the event Manager does not exercise such option,
Owner agrees that it will use any such items not so purchased exclusively in
connection with the Hotels until they are consumed; provided however, Manager
shall not be entitled to purchase FF&E, Operating Equipment or other personal
property located at a Hotel which is to be operated under the Brand name or by
Manager, until such Hotel shall no longer be so operated.

         (h) Owner shall have the right to operate the improvements on the
applicable Sites without modifying the structural design of same and without
making any Material Repair, notwithstanding the fact that such design or certain
features thereof may be

                                      -62-
<PAGE>

proprietary to Manager or its Affiliates and/or protected by trademarks or
service marks held by Manager or an Affiliate, provided that such use shall be
confined to the applicable Sites. Further, provided that Owner enters into a
then standard Candlewood Hotel License Agreement and the applicable Hotels then
satisfy the Brand Standards (unless the Hotels fail to satisfy such Brand
Standards due to a breach hereof by Manager), Owner shall be entitled (but not
obligated) to operate such of the Hotels as Owner designates under the Brand
name for a one (1) year term following such termination or expiration in
consideration for which Owner shall pay the then standard franchise and system
fees for the Brand and comply with the other applicable terms and conditions of
the form of franchise agreement then being entered into with respect to the
Brand.

         (i) Manager shall transfer to Owner the telephone numbers used in
connection with the operation of the Hotels (but not the Brand generally).

         (j) Manager shall cooperate with Owner's or its designees' efforts to
engage employees of the Hotels.

         (k) If requested by Owner prior to such expiration or earlier
termination of this Agreement in whole or in part, Manager shall continue to
manage under the Brand any affected Hotels designated by Owner after such
expiration or earlier termination for up to one (1) year, on such reasonable
terms (which shall include an agreement to reimburse Manager for its reasonable
out-of-pocket costs and expenses, and reasonable administrative costs and a
management fee of seven and one-half percent (7.5%) of Gross Revenues) as Owner
and Manager shall reasonably agree.

         The provisions of this Section 17.4 shall survive the expiration or
earlier termination of this Agreement.

                                   ARTICLE 18

                                    NOTICES

         18.1 Procedure.

         (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 by hand, by telecopier with written acknowledgment of receipt (provided
if

                                      -63-
<PAGE>

notice is given by telecopier, a copy shall also be sent on the following
Business Day by Federal Express or similar expedited commercial carrier), or by
Federal Express or similar expedited commercial carrier, addressed to the
recipient of the notice, 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 as follows:

             If to Owner:                   HPT TRS IHG-1, INC.
                                            c/o Hospitality Properties Trust
                                            400 Centre Street
                                            Newton, Massachusetts 02458
                                            Attn:  President
                                            Facsimile: 617/969-5730

             with a copy to:                Sullivan & Worcester LLP
                                            One Post Office Square
                                            Boston, Massachusetts 02109
                                            Attn:  Warren M. Heilbronner, Esq.
                                            Facsimile:  617-338-2880

             If to Manager:                 Intercontinental Hotels Group
                                            Resources, Inc.
                                            c/o Six Continents Hotels, Inc.
                                            3 Ravinia Drive, Suite 100
                                            Atlanta, Georgia 30346
                                            Attn: Vice President of Operations
                                            Facsimile:  770-604-8875

             with a copy to:                Intercontinental Hotels Group
                                            Resources, Inc.
                                            c/o Six Continents Hotels, Inc.
                                            3 Ravinia Drive, Suite 100
                                            Atlanta, Georgia 30346
                                            Attn: General Counsel -  Operations
                                            Facsimile:  770-604-5802

                                      -64-
<PAGE>

         (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.

                                   ARTICLE 19

                  RELATIONSHIP, AUTHORITY AND FURTHER ACTIONS

         19.1 Relationship. Manager shall be the agent of Owner with a limited
agency solely for the purpose of operating the Hotels and carrying out ordinary
and customary transactions for that purpose. Manager shall not have fiduciary
duties to Owner by virtue of this Agreement. Owner and Manager shall not be
construed as joint venturers or partners of each other, and neither shall have
the power to bind or obligate the other except as set forth in this Agreement.
Manager shall not constitute a tenant or subtenant of Owner and this Agreement
shall not constitute Owner a franchisee of Manager or of any of Manager's
Affiliates. This Agreement shall not create a franchise or a
franchisor/franchisee relationship within the meaning of the Federal Trade
Commission Act, any rule or regulation promulgated thereunder, or any other
state or federal law, rule or regulation or administrative or judicial decision.

         19.2 Further Actions. Each of the parties agrees to execute all
contracts, agreements and documents and take all actions necessary to comply
with the provisions of this Agreement and the intent hereof.

                                   ARTICLE 20

                                 APPLICABLE LAW

         This Agreement shall be interpreted, construed, applied and enforced in
accordance with the laws of the State of New York applicable to contracts
between residents of New York which are to be performed entirely within New
York, regardless of (a) where this Agreement is executed or delivered, (b) where
any payment or other performance required by this Agreement is made or required
to be made, (c) where any breach of any provision of this Agreement occurs, or
any cause of action otherwise accrues, (d) where any action or other proceeding
is instituted or pending, (e) the nationality, citizenship, domicile, principal

                                      -65-
<PAGE>

place of business, or jurisdiction of organization or domestication of any
party, (f) whether the laws of the forum jurisdiction otherwise would apply the
laws of a jurisdiction other than New York, (g) the location of the Hotels or
any applicable Hotel, or (h) any combination of the foregoing.

                                   ARTICLE 21

                             SUCCESSORS AND ASSIGNS

         21.1 Assignment.

         (a) Except as expressly provided below, Manager shall not assign,
mortgage, pledge, hypothecate or otherwise transfer its interest in all or any
portion of this Agreement or any rights arising under this Agreement or suffer
or permit such interests or rights to be assigned, transferred, mortgaged,
pledged, hypothecated or encumbered, in whole or in part, whether voluntarily,
involuntarily or by operation of law, or permit the management of the Hotels by
anyone other than Manager or Owner. For purposes of this Section 21.1, an
assignment of this Agreement shall be deemed to include any transaction which
results in Manager no longer being an Affiliate of Guarantor or pursuant to
which all or substantially all of Manager's assets are transferred to any Person
who is not an Affiliate of Guarantor.

         (b) Manager shall have the right, without Owner's consent, to assign
its interest in this Agreement (i) to IHG or any Affiliate of IHG provided such
assignee satisfies the requirements of Section 24.15, (ii) in connection with a
merger, corporate restructuring or consolidation of IHG or a sale of all or
substantially all of the assets of IHG and (iii) in connection with a sale of
all or substantially all of the assets (including associated management
agreements) owned by IHG and its Affiliates relating to the Brand. If Owner and
its Affiliates shall own or lease more than fifty percent (50%) of the hotels
comprising the Brand, IHG shall not, and Manager shall cause IHG not to,
transfer all or substantially all of the assets of IHG relating to the Brand
other than to a Person who at all times is an Affiliate of IHG. At Owner's
election, Manager shall assign this Agreement to any Person who is not an
Affiliate of IHG that acquires all or substantially all of the assets of IHG
relating to the Brand and shall cause such Person to assume all of Manager's
obligations thereafter accruing hereunder.

                                      -66-
<PAGE>

         (c) Owner shall not assign, mortgage, pledge, hypothecate or otherwise
transfer its interest in all or any portion of this Agreement or any rights
arising under this Agreement without the prior written consent of Manager except
(i)in connection with a sale of a Hotel in accordance with the terms of Sections
4.4 or 4.5, (ii) to any Landlord or an Affiliate of any Landlord,(iii) to
Manager or an Affiliate of Manager, (iv) to an Affiliate of Owner in a merger,
corporate restructuring or consolidation of any Landlord or any of its
Affiliates,(v) in connection with the granting of an Authorized Mortgage or (vi)
to a Substitute Tenant as provided in Section 4.2; provided, however, in each
instance (other than in connection with a collateral assignment) that the
assignee hereof assumes all of Owner's obligation hereunder and under the other
Transaction Documents thereafter accruing.

         (d) In the event either party consents to an assignment of this
Agreement by the other, no further assignment shall be made without the express
consent in writing of such party, unless such assignment may otherwise be made
without such consent pursuant to the terms of this Agreement. An assignment by
Owner of its interest in this Agreement approved or permitted pursuant to the
terms hereof shall relieve Owner of its obligations under this Agreement
thereafter accruing.

         (e) In the event fifty percent (50%) or more of the hotels comprising
the Brand cease to be Candlewood Suites hotels and are converted to another
brand in a single transaction or a series of related transactions, Owner may
elect to require Manager to promptly convert at Manager's own cost and expense
(and not as an Operating Cost and without reimbursement from the Reserve
Account) the Hotels to the brand of hotels to which such other hotels are
converted. In such event, all references herein to "Candlewood Suites" shall be
deemed to refer to the trade name of the system of hotels to which the Hotels
are to be so converted.

         21.2 Binding Effect. The terms, provisions, covenants, undertakings,
agreements, obligations and conditions of this Agreement shall be binding upon
and shall inure to the benefit of the successors in interest and the assigns of
the parties hereto with the same effect as if mentioned in each instance where
the party hereto is named or referred to, except that no assignment, transfer,
sale, pledge, encumbrance, mortgage, lease or sublease by or through Owner, as
the case may be, in violation of the provisions of this Agreement shall vest any

                                      -67-
<PAGE>

rights in the assignee, transferee, purchaser, secured party, mortgagee,
pledgee, lessee, sublessee or occupant.

                                   ARTICLE 22

                                   RECORDING

         22.1 Memorandum of Agreement. As of the Effective Date, at the option
of Manager, Owner and Manager agree to execute, acknowledge and record a
Memorandum of this Agreement in the land records of the states and counties
where the Hotels are located, in a form reasonably satisfactory to Manager.

                                   ARTICLE 23

                                 FORCE MAJEURE

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

         23.2 Extension of Time. Owner and Manager agree that, with respect to
any obligation, other than the payment of money, to be performed by a party
during the Term, neither party will be liable for failure so to perform when
prevented by any occurrence beyond the reasonable control of such party, herein
referred to as a "force majeure" including, without limitation, occurrences such
as strike, lockout, breakdown, accident, order or regulation of or by any
governmental authority, failure of supply or inability, by the exercise of
reasonable diligence, to obtain supplies, parts or employees necessary to
perform such obligation, or war or other emergency. The time within which such
obligation must be performed will be extended for a period of time equivalent to
the number of days of delay from such cause.

                                   ARTICLE 24

                               GENERAL PROVISIONS

                                      -68-
<PAGE>

         24.1 Trade Area Restriction. Notwithstanding anything to the contrary
in this Agreement, neither Manager nor any Affiliate shall acquire, own, manage,
operate or open any hotel as a "Candlewood Suite" hotel nor shall Manager or any
Affiliate authorize a third party to operate or open any hotel as a "Candlewood
Suite" hotel that is within the Restricted Area of any Hotel during its
Restricted Period, unless such hotel (a) is owned or leased by Owner or its
Affiliate; (b) is owned, operated, managed, franchised or under development on
the Effective Date pursuant to an agreement which is binding on the owner of the
Brand as of the date hereof; or (c) is part of an acquisition by IHG or its
Affiliates of an interest (including an interest as a franchisor) in a chain or
group of not less than ten (10) hotels (such acquisition to occur in a single
transaction or a series of related transactions). The terms of this Section 24.1
shall apply only to "Candlewood Suites" hotels and shall not in any way restrict
the ownership, management, franchising or operation of other brands or flags of
any hotels to be owned, operated or franchised by Manager or its Affiliates
within the Restricted Area.

         24.2 Environmental Matters.

         (a) Manager shall not store, spill upon, dispose of or transfer to or
from any Hotel any Hazardous Substance, except in compliance with all Legal
Requirements. Manager shall maintain the Hotels at all times free of any
Hazardous Substance (except in compliance with all Legal Requirements). Manager
(i) upon receipt of notice or knowledge shall promptly notify the Landlords and
Owner in writing of any material change in the nature or extent of Hazardous
Substances at any Hotel, (ii) shall file and transmit to the Landlords and Owner
a copy of any Community Right to Know report which is required to be filed by
the Manager with respect to any Hotel pursuant to SARA Title III or any other
Legal Requirements, (iii) shall transmit to the Landlords and Owner copies of
any citations, orders, notices or other governmental communications received by
Manager with respect thereto (collectively, "Environmental Notice"), which
Environmental Notice requires a written response or any action to be taken
and/or if such Environmental Notice gives notice of and/or presents a material
risk of any material violation of any Legal Requirement and/or presents a
material risk of any material cost, expense, loss or damage, (iv) shall observe
and comply with all Legal Requirements relating to the use, maintenance and
disposal of Hazardous Substances and all orders or directives from any official,
court or agency of competent jurisdiction relating to the use or maintenance or
requiring the

                                      -69-
<PAGE>

removal, treatment, containment or other disposition thereof, and (v) shall pay
or otherwise dispose of any fine, charge or imposition related thereto.

         (b) In the event of the discovery of Hazardous Substances other than
those maintained in accordance with Legal Requirements on any portion of any
Site or in any Hotel during the Term, Manager shall use reasonable efforts
promptly to (i) clean up and remove from and about such Hotel all Hazardous
Substances thereon, if appropriate, (ii) contain and prevent any further release
or threat of release of Hazardous Substances on or about such Hotel, and (iii)
use good faith efforts to eliminate any further release or threat of release of
Hazardous Substances on or about such Hotel, and (iv) otherwise effect a
remediation of the problem in accordance with (A) the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601
et seq., as amended; (B) the regulations promulgated thereunder, from time to
time; (C) all Federal, state and local laws, rules and regulations (now or
hereafter in effect) dealing with the use, generation, treatment, storage,
disposal or abatement of Hazardous Substances; and (D) the regulations
promulgated thereunder, from time to time (collectively referred to as
"Environmental Laws").

         (c) To the extent any service required to be performed under this
Section 24.2 or cost incurred under this Section 24.2 is not due to the fault of
Manager or is not performed or incurred in the operations of the Hotels in the
ordinary course, the same shall be governed by Section 11.1; provided, however,
to the extent that Section 11.1 shall apply to such services or costs, Owner
shall be entitled to engage a third party to perform such services.

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

         24.4 Severability. If any provision of this Agreement shall be held or
deemed to be, or shall in fact be, invalid, inoperative or unenforceable as
applied to any particular case in any jurisdiction or jurisdictions, or in all
jurisdictions or in all cases, because of the conflict of any provision with any
constitution or statute or rule of public policy or for any other reason, such
circumstance shall not have the effect of

                                      -70-
<PAGE>

rendering the provision or provisions in question invalid, inoperative or
unenforceable in any other jurisdiction or in any other case or circumstance or
of rendering any other provision or provisions herein contained invalid,
inoperative or unenforceable to the extent that such other provisions are not
themselves actually in conflict with such constitution, statute or rule of
public policy, but this Agreement shall be reformed and construed in any such
jurisdiction or case as if such invalid, inoperative or unenforceable provision
had never been contained herein and such provision reformed so that it would be
valid, operative and enforceable to the maximum extent permitted in such
jurisdiction or in such case.

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

         24.6 Formalities. Any amendment or modification of this Agreement must
be in writing signed by all parties hereto. This Agreement may be executed in
one or more counterparts, each of which will be deemed an original.

         24.7 Consent to Jurisdiction; No Jury Trial.

         (a) Except as provided in Section 24.19, all actions and proceedings
arising out of or in any way relating to this Agreement shall be brought, heard,
and determined exclusively in an otherwise appropriate federal or state court
located within the State of New York. Except as provided in Section 24.19, the
parties hereby (a) submit to the exclusive jurisdiction of any New York federal
or state court of otherwise competent jurisdiction for the purpose of any action
or proceeding arising out of or relating to this Agreement and (b) voluntarily
and irrevocably waive, and agree not to assert by way of motion, defense, or
otherwise in any such action or proceeding, any claim or defense that they are
not personally subject to the jurisdiction of such a court, that such a court
lacks personal jurisdiction over any party or the matter, that the action or
proceeding has been brought in an inconvenient or improper forum, that the venue
of the action or proceeding is improper, or that this Agreement may not be
enforced in or by such a court. To the maximum extent permitted by applicable
law, each party consents to service of process by registered mail, return
receipt requested, or by any other manner provided by law.

                                      -71-
<PAGE>

         (b) To the maximum extent permitted by applicable law, each of the
parties hereto waives its rights to trial by jury with respect to this Agreement
or matter arising in connection herewith.

         24.8 Performance on Business Days. In the event the date on which
performance or payment of any obligation of a party required hereunder is other
than a Business Day, the time for payment or performance shall automatically be
extended to the first Business Day following such date.

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

         24.10 Section and Other Headings. The headings contained in this
Agreement are for reference purposes only and shall not in any way affect the
meaning or interpretation of this Agreement.

         24.11 Documents. Throughout the Term, Owner agrees to furnish Manager
copies of all notices relating to real and personal property taxes and insurance
statements, all financing documents (including notes and mortgages) relating to
the Hotel and such other documents pertaining to the Hotels as Manager may
request.

         24.12 No Consequential Damages. Except as may be expressly provided
herein, in no event shall either party be liable for any consequential,
exemplary or punitive damages suffered by the other as the result of a breach of
this Agreement. Time is of the essence with respect to this Agreement.

         24.13 No Political Contributions. Notwithstanding anything contained in
this Agreement to the contrary, no money or property of the Hotels shall be paid
or used or offered, nor shall Owner or Manager directly or indirectly use or
offer, consent or agree to use or offer, any money or property of the Hotels (i)
in aid of any political party, committee or organization, (ii) in aid of any
corporation, joint stock or other association organized or maintained for
political

                                      -72-
<PAGE>

purposes, (iii) in aid of any candidate for political office or nomination for
such office, (iv) in connection with any election, (v) for any political purpose
whatever, or (vi) for the reimbursement or indemnification of any person for any
money or property so used.

         24.14 REIT Qualification. Manager shall, as an Operating Cost, take all
actions reasonably requested by Owner or any Landlord as may be necessary to
ensure that the Landlords' rental income from Owner under the Leases qualifies
as "rents from real property" pursuant to Sections 856(d)(2), 856(d)(8)(B) and
856(d)(9) of the Code; provided, however, any additional costs or expenses
(including internal costs and expenses) incurred by Manager in complying with
such a request shall be borne by Owner (and shall not be an Operating Cost) to
the extent the same together with the costs to Manager referred to in Section
24.16 exceeds $25,000 over the Term in the aggregate.

         24.15 Further Compliance with Section 856(d) of the Code. Throughout
the Term (including the Effective Date), the Manager shall qualify as an
"eligible independent contractor" as defined in Section 856(d)(9)(A) of the
Code. To that end, Manager:

         (a) shall not permit wagering activities to be conducted at or in
connection with any Hotel by any person who is engaged in the business of
accepting wagers and who is legally authorized to engage in such business at or
in connection with such Hotel;

         (b) shall use reasonable efforts to cause each Hotel to qualify as a
"qualified lodging facility" under Section 856(d)(9)(D) of the Code;

         (c) shall not own, directly or indirectly or constructively (within the
meaning of Section 856(d)(5) of the Code), more than thirty five percent (35%)
of the shares of HPT (whether by vote, value or number of shares), and Manager
shall otherwise comply with any regulations or other administrative or judicial
guidance now or hereafter existing under said Section 856(d)(5) of the Code with
respect to such ownership limits; and

         (d) shall be actively engaged (or shall, within the meaning of Section
856(d)(9)(F) of the Code, be related to a person that is so actively engaged) in
the trade or business of operating "qualified lodging facilities" (defined
below) for a

                                      -73-
<PAGE>

person who is not a "related person" within the meaning of Section 856(d)(9)(F)
of the Code with respect to HPT or Owner ("Unrelated Persons"). In order to meet
this requirement, the Manager agrees that it (or any "related person" with
respect to Manager within the meaning of Section 856(d)(9)(F) of the Code) (i)
shall derive at least ten percent (10%) of both its revenue and profit from
operating "qualified lodging facilities" for Unrelated Persons and (ii) shall
comply with any regulations or other administrative or judicial guidance under
Section 856(d)(9) of the Code with respect to the amount of hotel management
business with Unrelated Persons that is necessary to qualify as an "eligible
independent contractor" within the meaning of such Code Section.

         (e) A "qualified lodging facility" is defined in Section 856(d)(9)(D)
of the Code and means a "lodging facility" (defined below), unless wagering
activities are conducted at or in connection with such facility by any person
who is engaged in the business of accepting wagers and who is legally authorized
to engage in such business at or in connection with such facility. A "lodging
facility" is a hotel, motel or other establishment more than one-half of the
dwelling units in which are used on a transient basis, and includes customary
amenities and facilities operated as part of, or associated with, the lodging
facility so long as such amenities and facilities are customary for other
properties of a comparable size and class owned by other owners unrelated to
HPT.

         24.16 Adverse Regulatory Event. In the event of an Adverse Regulatory
Event arising from or in connection with this Agreement, Owner and Manager shall
work together in good faith to amend this Agreement to eliminate the impact of
such Adverse Regulatory Effect; provided, however, Manager shall have no
obligation to materially reduce its rights or materially increase its obligation
under this Agreement, all taken as a whole, or to bear any costs or expenses
(including internal costs and expenses) in excess of $25,000 in the aggregate
over the Term under Section 24.14 and this Section 24.16. For purposes of this
Agreement, the term "Adverse Regulatory Effect" means any time that a law,
statute, ordinance, code, rule or regulation imposes (or could impose in Owner's
reasonable opinion) any material threat to HPT's status as a "real estate
investment trust" under the Code or to the treatment of amounts paid to any
Landlord as "rents from real property" under Section 856(d) of the Code. Each of
Manager and Owner shall inform the other of any Adverse Regulatory Event of
which it is aware and

                                      -74-
<PAGE>

which it believes likely to impair compliance of any of the Hotels with respect
to the aforementioned sections of the Code.

         24.17 Commercial Leases. Manager shall not enter into any sublease with
respect to any Hotel (or any part thereof) unless the same has been approved by
the Master Landlord or the Overland Landlord, as the case may be, in its sole
and absolute discretion; provided, however, Manager may sublease or grant
concessions or licenses to shops or any other space at a Hotel subject to the
following terms and conditions: (a) subleases and concessions are for newsstand,
gift shop, parking garage, heath club, restaurant, bar or commissary purposes or
similar concessions; (b) such subleases and concessions do not have a term in
excess of lesser of five (5) years or the remaining Term under this Agreement;
(c) such subleases and concessions do not demise, (i) in the aggregate, in
excess of Two Thousand (2,000) square feet of any Hotel, or (ii) for any single
sublease, in excess of Five Hundred (500) square feet of any Hotel; (d) any such
sublease, license or concession to an Affiliate of a Manager shall be on terms
consistent with those that would be reached through arms-length negotiation; (e)
for so long as the Landlords or any Affiliate of the Landlords shall seek to
qualify as a real estate investment trust under the Code, anything contained in
this Agreement to the contrary notwithstanding, Manager shall not sublet or
otherwise enter into any agreement with respect to a Hotel on any basis such
that in the opinion of the Owner the rental or other fees to be paid by any
sublessee thereunder would be based, in whole or in part, on either (i) the
income or profits derived by the business activities of such sublessee, or (ii)
any other formula such that any portion of such sublease rental would fail to
qualify as "rents from real property" within the meaning of Section 865(d) of
the Internal Revenue Code of 1986, as amended, or any similar or successor
provision thereto; (f) such lease or concession will not violate or affect any
Legal Requirement or Insurance Requirement; (g) Manager shall obtain or cause
the subtenant to obtain such additional insurance coverage applicable to the
activities to be conducted in such subleased space as Owner and any mortgagee
under an Authorized Mortgage may reasonably require; and (h) not less than
twenty (20) days prior to the date on which Manager proposes to enter into any
sublease or concession, Manager shall provide a copy thereof to Owner.

         24.18 Nonliability of Trustees. THE DECLARATION OF TRUST ESTABLISHING
MASTER LANDLORD, A COPY OF WHICH, TOGETHER WITH ALL AMENDMENTS THERETO (THE
"DECLARATION"), IS DULY FILED

                                      -75-
<PAGE>

WITH THE DEPARTMENT OF ASSESSMENTS AND TAXATION OF THE STATE OF MARYLAND,
PROVIDES THAT, AND MANAGER HEREBY AGREES 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 MASTER LANDLORD SHALL BE HELD TO ANY PERSONAL LIABILITY,
JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, MASTER LANDLORD.
ALL PERSONS DEALING WITH MASTER LANDLORD, IN ANY WAY, SHALL LOOK ONLY TO THE
ASSETS OF MASTER LANDLORD FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY
OBLIGATION. Further, if the Overland Landlord is a Maryland real estate
investment trust, the foregoing terms of this Section 24.18 shall apply to it
and its trustees, officer, shareholder, employee or agent mutatis mutandis.

         24.19 Arbitration.

         (a) Whenever in this Agreement it is provided that a dispute is to be
resolved by an Arbitration, such dispute shall be finally resolved pursuant to
an arbitration before a panel of three (3) arbitrators who will conduct the
arbitration proceeding in accordance with the provisions of this Agreement and
the rules of the American Arbitration Association. Unless otherwise mutually
agreed by Owner and Manager, the arbitration proceedings will be conducted in
New York, New York. All arbitrators appointed by or on behalf of either party
shall be independent persons with recognized expertise in the operation of
hotels of similar size and class as the Hotels with not less than five (5)
years' experience in the hotel industry. The party desiring arbitration will
give written notice to that effect to the other party, specifying in such notice
the name, address and professional qualifications of the person designated as
arbitrator on its behalf. Within fifteen (15) days after service of such notice,
the other party will give written notice to the party desiring such arbitration
specifying the name, address and professional qualifications of the person
designated to act as arbitrator on its behalf. The two arbitrators will, within
fifteen (15) days thereafter, select a third, neutral arbitrator. As soon as
possible after the selection of the third arbitrator, and no later than fifteen
(15) days thereafter, the parties will submit their positions on each disputed
item in writing to the three arbitrators. The decision of the arbitrators so
chosen shall be given within a period of twenty (20) days after the appointment
of such third arbitrator. The arbitrators must, by majority vote, agree upon and
approve the substantive position of either Owner or Manager with respect to each
disputed item, and are not authorized to agree upon or

                                      -76-
<PAGE>

impose any other substantive position which has not been presented to the
arbitrators by Manager or Owner. It is the intention of the parties that the
Arbitrator's rule only on the substantive positions submitted to them by the
parties and the Arbitrators are not authorized to render rulings which are a
compromise as to any such substantive position. A decision in which any two (2)
arbitrators so appointed and acting hereunder concur in writing with respect to
each disputed item shall in all cases be binding and conclusive upon Owner and
Manager and a copy of said decision shall be forwarded to the parties. The
parties request that the Arbitrator assess the costs and expenses of the
Arbitration and their fees against the parties based on a finding as to which
parties substantive positions were not upheld. Otherwise the fees and expenses
of the arbitration will be treated as an Operating Cost unless otherwise
determined by the Arbitrators.

         (b) If the party receiving a request for Arbitration fails to appoint
its arbitrator within the time above specified, or if the two arbitrators so
selected cannot agree on the selection of the third arbitrator within the time
above specified, then either party, on behalf of both parties, may request such
appointment of such second or third arbitrator, as the case may be, by
application to any judge of any court in New York County, New York of competent
jurisdiction upon ten (10) days' prior written notice to the other party of such
intent.

         (c) If there shall be a dispute with respect to whether a party has
unreasonably withheld, conditioned or delayed its consent with respect to a
matter for which such party has agreed herein not to unreasonably withhold its
consent, such dispute shall be resolved by Arbitration.

         (d) Any disputes under Sections 2.1 or 7.6 shall be resolved by
Arbitration; provided, however, notwithstanding the foregoing, Owner shall be
entitled to seek and obtain injunctive and other equitable relief if it believes
there has been a breach of Manager's obligation under either of said Sections.

         24.20 Estoppel Certificates. Each party to this Agreement shall at any
time and from time to time, upon not less than fifteen (15) days' prior notice
from the other party, execute, acknowledge and deliver to such other party, or
to any third party specified by such other party, a statement in writing: (a)
certifying that this Agreement is unmodified and in full force and effect (or if
there have been modifications, that the same, as modified, is in full force and
effect and

                                      -77-
<PAGE>

stating the modifications); (b) stating whether or not to the best knowledge of
the certifying party (i) there is a continuing default by the non-certifying
party in the performance or observance of any covenant, agreement or condition
contained in this Agreement, or (ii) there shall have occurred any event which,
with the giving of notice or passage of time or both, would become such a
default, and, if so, specifying each such default or occurrence of which the
certifying party may have knowledge; (c) stating the date to which distributions
of Operating Profits have been made; and (d) stating such other information as
the non-certifying party may reasonably request. Such statement shall be binding
upon the certifying party and may be relied upon by the non-certifying party
and/or such third party specified by the non-certifying party as aforesaid,
including, without limitation its and its Affiliates' lenders and any
prospective purchaser or mortgagee of any Hotel.

         24.21 Confidentiality.

         (a) The parties hereto agree that the matters set forth in this
Agreement and the information provided pursuant to the terms hereof are strictly
confidential and each party will make every effort to ensure that the
information is not disclosed to any outside person or entities (including the
press) without the prior written consent of the other party except may be
required by law and as may be reasonably necessary to obtain licenses, permits,
and other public approvals necessary for the refurbishment or operation of the
Hotels, or in connection with financing, proposed financing, sale or proposed
sale. Notwithstanding anything to the contrary contained in this Agreement, the
parties (and each employee, representative, or other agent of the parties) may
disclose to any and all persons, without limitation of any kind, the tax
treatment and tax structure of the transaction, and all materials of any kind
(including opinions or other tax analyses) that are provided to the taxpayer
relating to such tax treatment and tax structure; provided, however, that
neither party (nor any employee, representative or other agent thereof) may
disclose any information that is not necessary to understanding the tax
treatment and tax structure of the transaction (including the identity of the
parties and any information that could lead another to determine the identity of
the parties), or any other information to the extent that such disclosure could
result in a violation of any federal or state securities law.

         (b) No reference to Manager or to any of its Affiliates will be made in
any prospectus, private placement memorandum,

                                      -78-
<PAGE>

offering circular or offering documentation related thereto (collectively
referred to as the "Prospectus"), issued by Owner or any of its Affiliates,
which is designated to interest potential investors in a Hotel, unless Manager
has previously received a copy of all such references. However, regardless of
whether Manager does or does not so receive a copy of all such references,
neither Manager nor any of its Affiliates will be deemed a sponsor of the
offering described in the Prospectus, nor will it have any responsibility for
the Prospectus, and the Prospectus will so state. Unless Manager agrees in
advance, the Prospectus will not include any trademark, symbols, logos or
designs of Manager or any of its Affiliates.

         24.22 Hotel Warranties. Manager shall be entitled to enforce in the
name of Owner any warranties held by Owner with respect to the Hotels or any
portion thereof.

         24.23 Effective Date. If the Effective Date does not occur on or before
February 28, 2004 this agreement shall be of no force or effect.

         24.24 Overland Landlord.

         (a) Pursuant to a separate agreement, on the Effective Date, the
Overland Landlord will acquire the Hotel in Overland Park, Kansas. Such Hotel is
subject to the Assumed Mortgage which is intended to be assumed by the Overland
Landlord. The parties agree to cooperate in connection therewith. Without
limiting the generality of the foregoing, the parties acknowledge and agree that
any reserves for taxes or insurance required under or in connection with the
Assumed Mortgage shall be funded as an Operating Cost as and when required and
any reserves for Repairs of FF&E required under or in connection with the
Assumed Mortgage shall be funded as and when required from amounts in the
Reserve Account or amounts to otherwise to be contributed thereto. The parties
anticipate that such holder may seek to impose certain conditions on the
structure and organization of the Overland Landlord. Accordingly, the Overland
Landlord has not been formed and has not yet entered into the Overland Lease. On
or before the Effective Date, Owner shall cause Overland Landlord to be duly
formed, to execute and deliver the Overland Lease and join in this Agreement on
the same terms and conditions upon which Master Landlord has joined herein.

         (b) Upon any foreclosure of the Assumed Mortgage, this Agreement shall
terminate with respect to the Hotel subject

                                      -79-
<PAGE>

thereto. Upon such termination, the Owner's Fixed Priority shall each be reduced
proportionately so that after giving effect to such reduction the ratio of
Owner's Fixed Priority to the NOI of the Hotels (other than the Hotel with
respect to which this Agreement has been so terminated) for the most recently
ended twelve (12) months as of the date of such foreclosure equals the ratio of
Owner's Fixed Priority before such reduction to the NOI of all the Hotels
(including, the Hotel with respect to which this Agreement has been terminated)
for such period.

         24.25 Jersey City Hotel.

         (a) The parties acknowledge that on and after the Effective Date the
Hotel located in Jersey City, New Jersey may continue to be owned by Candlewood
Jersey City-Urban Renewal L.L.C. and leased to Master Landlord. In the event
that is the case, then on the Effective Date Owner shall cause Candlewood Jersey
City-Urban Renewal L.L.C. to join in this Agreement for purposes of agreeing to
be bound by the terms of Sections 4.1 through and including 4.7, ARTICLE 15 and
ARTICLE 16 hereof with the same force and effect as though it were a Landlord.

         (b) Manager recognizes that such Hotel is subject to the Declaration of
Environmental Restrictions, made as of July 9, 1993 by National Bulk Carriers,
Inc. and recorded with the Hudson County Registrar of Deeds and Mortgages in
Book 4617, Page 63 on July 16, 1993. Manager hereby recognizes the restrictions
contained therein and recognizes that its interests are expressly subject to the
provisions contained therein and agrees to not violate any of the conditions
therein.

         (c) Owner and Manager shall cause all leases, grants and other written
transfers of interest in such Hotel to contain a provision expressly requiring
all holders thereof to take the property subject to the restrictions and not to
violate any of the conditions of the Declaration of Environmental Restrictions.

         24.26 Opinion. On or before the Effective Date, Manager shall deliver
to Owner one or more written opinions from counsel to the Guarantor, in form and
substance reasonably satisfactory to the Owner, regarding the organization and
authority of the Guarantor and the enforceability of the Guaranty together with
certified copies of all charter documents of the Guarantor.

                                      -80-
<PAGE>
         IN WITNESS WHEREOF, the parties hereto have duly executed and delivered
this Agreement effective as of the day and year first above written.

                                      OWNER:

                                 HPT TRS IHG-1, INC.

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

                                 MANAGER:

                                 INTERCONTINENTAL HOTELS GROUP RESOURCES, INC.

                                 By: /s/ Stevan D. Porter
                                    ---------------------------------------
                                 Name:  Stevan D. Porter
                                 Title: President

                                      -81-
<PAGE>

Master Landlord in consideration of good and valuable consideration, joins in
the foregoing Agreement to evidence its agreement to be bound by the terms of
Sections 2.6 and 4.1 through and including 4.7 and ARTICLE 15 and ARTICLE 16
thereof subject to the terms of Section 24.18.

                                 MASTER LANDLORD:

                                 HPT CW PROPERTIES TRUST,
                                 a Maryland real estate investment trust

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

                                 HPT CW MA REALTY TRUST
                                 a Massachusetts business trust

                                 By: /s/ John G. Murray
                                    --------------------------------------------
                                    John G. Murray
                                    as Trustee and not individually

                                 HH HPTCW II PROPERTIES LLC,
                                 a Delaware limited liability company

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

                                      Date of Execution:

                                      -82-
<PAGE>
The following exhibits have been omitted and will be supplementally furnished to
the Securities and Exchange Commission upon request:

Exhibits A1-A76   Property descriptions
Exhibit C         Certain representations with respect to the Hotels

Please note that there is no Exhibit B to the Agreement.

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