Document:

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                                                                Exhibit 10.31

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                              MANAGEMENT AGREEMENT

                                       for

                                   Hampton Inn
                            Deerfield Beach, Florida

                                 by and between

                            ENN LEASING COMPANY, INC.

                                   as Lessee,

                                       and

                            HOSPITALITY GROUP, INC.,

                                   as Manager,

                             Dated October 21, 2004

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                              MANAGEMENT AGREEMENT

         THIS AGREEMENT, made as of _________________ , 2004 by and between ENN
Leasing Company, Inc., a Tennessee corporation ("Lessee"), having its principal
office at 7700 Wolf River Boulevard, Germantown, Tennessee 38138 and Hospitality
Group, Inc., a Florida corporation ("Manager"), having a principal office at 123
North Congress Avenue #358, Boynton Beach, Florida 33426.

                              PRELIMINARY STATEMENT

         A. Lessee is the lessee of a first-class hotel (the "Hotel") on the
land herein described.

         B. Manager is an independent contractor engaged in the management of
hotels throughout the United States, and Manager is experienced in the various
phases of hotel operations.

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

         NOW, THEREFORE, Lessee and Manager agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

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

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

                  1.01.2 Capital Renewals - a collective term for (a) normal
capital replacements of, or additions to, FF&E, and (b) special projects
designed to maintain the Hotel in a first-class condition in accordance with the
standards contemplated by this Agreement, including without limitation,
renovation of the guest room areas, public space, food and beverage facilities,
or back of the house areas, which projects will generally comprise replacements
of, or additions to, FF&E, but may include revisions and alterations in the
Improvements; most of the expenditures for such special projects will be
capitalized, but a portion thereof may be currently expended, such as the
purchase of smaller items of FF&E, or expenditures which are ancillary to the
overall

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project but which are properly chargeable to Property Operations and Maintenance
under the Uniform System of Accounts for Hotels.

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

                  1.01.4 Claims - as defined in Subsection 12.03.1.

                  1.01.5 CPI - as defined in Subsection 4.02.3.

                  1.01.6 Commencement Date - the date on which an affiliate of
Lessee purchases the Hotel and Manager begins operating the Hotel under the
Agreement.

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

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

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

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

                  1.01.12 Gross Operating Profit (GOP) - the excess of Gross
Operating Revenues over expenses and deductions incurred in the operation of the
Hotel by Manager in fulfilling its duties hereunder, determined in accordance
with the accounting system established by the Uniform System (except as modified
by this Agreement). In arriving at Gross Operating Profit, all expenses shall be
proper deductions from Gross Operating Revenues insofar as they relate to the
operation of the Hotel including, without limit, all Base Management Fees,
license fees, franchisor royalties and fees, and direct out-of-pocket charges of
Manager or its affiliates as well as corporate charges.

                  1.01.13 Gross Revenues - as defined in the Management Fee
Rider.

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

                  1.01.15 Group Services - as defined in Section 4.03.

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

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

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

                  1.01.20 Initial Term - as defined in Section 2.01.

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

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

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

                  1.01.24 License Agreement - the Franchise Agreement dated

___________ between Hilton Hotels, as franchisor, and Lessee, as franchisee,
licensing the operation of the Hotel under the Hotel name.

                  1.01.25 Local Operating Account - one or more bank accounts
established by Manager for Lessee in one or more banks approved by Lessee.

                  1.01.26 Major Capital Improvements - as defined in Subsection
12.08.1.

                  1.01.27 Managed Hotels - a collective term for the Hotel and
all other hotels within the United States of America owned, leased and/or
operated under the Hotel name by Manager or its Affiliates.

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

                  1.01.29 Minimum Balance - as defined in Section 7.02.

                  1.01.30 Mortgage - as defined in Section 9.03.2.

                  1.01.31 Net Operating Income - as defined in the Management
Fee Rider.

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

                  1.01.33 Operating Funds - as defined in Section 7.02.

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

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

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

                  1.01.37 Other Managed Hotels - all hotels and inns within the
United States other than the Hotel owned, leased and/or operated by Manager or
any of its Affiliates.

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

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

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

                  1.01.41 Term - as defined in Section 2.01.

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

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

                                   ARTICLE II

                                TERM AND RENEWAL

         2.01 The Term. The initial term of this Agreement ("Initial Term")
shall commence on the date hereof and shall expire at midnight of the day
preceding the date which is three (3) years from the Commencement Date.

                                   ARTICLE III

Intentionally Deleted.

                                   ARTICLE IV

                                OPERATING PERIOD

         4.01 Authority and Duty of Manager. Manager shall have the sole and
exclusive right and obligation to manage and operate the Hotel pursuant to the
terms of this Agreement and Manager agrees that it shall manage and operate the
Hotel as a first-class hotel comparable to Other Managed Hotels in accordance
with the standards for Hampton Inn / Hampton Inn & Suites hotels, taking into
account the size, location and character of the Project. In connection
therewith, Manager shall have the authority and responsibility, subject to the
provisions of this Agreement, to (i) determine operating policy, standards of
operation, quality of service, the maintenance and physical appearance of the
Hotel and any other matters affecting operations and management; (ii) supervise
and direct all phases of advertising, sales and business promotion for the
Hotel; and (iii) carry out all programs contemplated by the Operating Budgets
and, as directed by Lessee, the Capital Renewals Budgets, which have been
approved by Lessee pursuant to Section 4.02. Lessee agrees that it will
cooperate reasonably with Manager to permit and assist Manager to carry out its
duties hereunder. Manager agrees to provide management services to the Hotel to
the degree and to the scope of services that Manager provided at the time this
agreement was executed. As such, Manager agrees that Manager will not reduce
Manager's corporate office staffing levels, alter the level and scope of support
and managerial services provided to the Hotel by Manager, or assess additional
corporate charges to the Hotel without the written consent of the Lessee.

         4.02 Operating Budgets and Capital Renewals Budgets.

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

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

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

Budgets for Major Capital Improvements initiated under Section 12.08 shall be
treated separately and shall not be included in the Capital Renewals Budget.

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

                  4.02.3 Approval of Budgets. The Operating Budgets and the
Capital Renewals Budget shall be subject to the approval of Lessee, which shall
not be unreasonably withheld or delayed, it being contemplated that each such
Operating Budgets and Capital Renewals Budget shall be agreed upon by the
parties within thirty (30) days after the submission of the same by Manager to
Lessee. If Lessee shall fail to approve any Operating Budgets or Capital
Renewals Budget within thirty (30) days after its submittal by Manager, or to
submit its written objections thereof to Manager within such period, in case of
a dispute with regard to any Operating Budgets, then pending the settlement
thereof, or until such dispute is resolved in accordance with Section 12.04,
Manager shall be entitled to continue to operate the Hotel in accordance with
the standards set forth herein and shall be entitled to make expenditures which
are consistent with the Operating Budget for the immediately preceding Operating
Year; provided that, subject to the standards of performance described in
Subsection 4.02.4 below, the maximum approved amount of such expenditures shall
be equal to (a) the aggregate of all items set forth in the Operating Budget
which are not disputed by Lessee, plus (b) with respect to all items in the
Operating Budget which are disputed or objected to by Lessee, the amount
allocated to such item(s) in the Operating Budget for the immediately preceding
Operating Year increased by the greater of (i) five percent (5%), or (ii) the
difference between the Consumer Price Index (All Cities - All Items) (1982-84 =
100) (the "CPI"), on January 1 of the Operating Year immediately preceding the
Operating Year in question and the CPI on January 1 of the Operating Year in
question.

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

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                  4.02.5 Intentionally Deleted.

                  4.02.6 Compliance with Capital Renewals Budget. Manager shall
at all times comply with the applicable Capital Renewals Budget as directed by
Lessee, and shall not deviate in any substantial respect therefrom without the
prior written consent of the Lessee. Notwithstanding the foregoing, Manager
shall be entitled to make additional expenditures not authorized under the then
applicable Capital Renewals Budget in case of emergencies arising out of fire or
any other like or unlike casualty, or in order to comply with any applicable
Legal Requirements. Manager will promptly notify Lessee of any expenditures not
authorized under the then applicable Capital Renewals Budget.

         4.03     Intentionally Deleted.

         4.04     Intentionally Deleted.

         4.05     Personnel.

                  4.05.1 General. Manager shall hire, discharge, promote and
supervise the Executive Staff of the Hotel, and shall supervise through said
Executive Staff the hiring, discharging, promotion and work of all other
operating and service employees of the Hotel. All members of the Executive Staff
of the Hotel shall be properly qualified for their positions, and the direct
compensation payable to such persons shall be comparable to the direct
compensation paid to the members of the Executive Staff of other comparable
hotels, taking into account the location and size of the Hotel. Lessee shall
have the right to consult with Manager regarding the selection of any such
individual as the general manager of the Hotel.

                  4.05.2 Manager as Employer. All employees of the Hotel shall
be employees of Manager or an affiliate of Manager, and all Compensation of such
employees shall be paid by Manager, and the amount of such payments shall
immediately be reimbursed to Manager by Lessee in accordance with Section 4.07
hereof. In the event an affiliate of Manager employs the employees of the Hotel,
Manager shall remain primarily liable for said employment. Manager shall also
have the right to use employees of Manager or its Affiliates not located at the
Hotel to provide services to the Hotel ("Off-Site Personnel") and the right to
have the general manager of the Hotel serve as the regional manger for Other
Managed Hotels, and all Compensation of such Off-Site Personnel shall
immediately be reimbursed to Manager by Lessee in accordance with Section 4.07
hereof, except Manager shall allocate a portion of said Regional Managers'
salaries and benefits to other supervised hotels. Likewise, Manager may also
allocation a portion of other Regional Manager's salaries and benefits from
other supervised hotels to the Hotel for benefits received by Hotel for such
services; provided that all such allocations shall have been approved during the
budgeting process for the then-current year. Manager shall also have the right
to have Off-Site Personnel performing regional or area duties relating to the
Hotel and Other Managed Hotels lodged at the Hotel from time to time free of
charge. Accordingly, Manager shall establish appropriate payroll accounts
covering all such employees of the Hotel. Arrangements shall be made such that
Manager can draw on the Hotel Accounts to transfer funds to such payroll
accounts immediately upon its payment of such Compensation. Manager shall
indemnify and hold Lessee harmless from and against any and all actions, suits,
claims, penalties, losses, damages and expenses, including reasonable attorneys'
fees, based upon or arising out of

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Manager's gross negligence or willful misconduct in connection with the
employment of any and all Hotel employees, including but not limited to any
claims based upon discrimination in employment.

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

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

                  4.05.5 Business Expenses. The Executive Staff and other
appropriate employees of the Hotel shall also be reimbursed for all reasonable
business expenses pertaining to the Hotel, including business entertainment and
travel expenses, in accordance with the standard practices in effect at Other
Managed Hotels.

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

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

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

                  4.06 Additional Responsibilities of Manager.

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                  4.06.1 Manager, as agent shall, perform the following
additional services, or cause the same to be performed for the Hotel:

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

                           (b) subject to compliance with the applicable Capital
                  Renewals Budget and subject to Section 4.06.02(b) hereof, and
                  if directed by the Lessee, make all repairs, decorations,
                  revisions, alterations and improvements to the Hotel as shall
                  be reasonably necessary for the proper maintenance thereof in
                  good order, condition and repair;

                           (c) subject to Section 4.06.02(b) hereof, purchase
                  such Operating Equipment and Operating Supplies as shall be
                  reasonably necessary for the proper operation of the Hotel in
                  accordance with the Operating Budgets;

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

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

                           (f) in accordance with the Operating Budgets, pay all
                  Impositions and insurance premiums, when due;

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

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

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

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

                           (b) enter into any contracts, purchase orders or work
         orders for goods or services to the Hotel; provided that Lessee's prior
         written approval shall be required for any contract having a
         non-terminable term in excess of one year, or if the amount of the
         aggregate expenditures thereunder would, or are reasonably anticipated
         to, exceed $50,000.00 in the aggregate per annum.

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

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

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

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

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

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

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

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

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

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

                                    ARTICLE V

                                    INSURANCE

         5.01 Coverage.

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

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

                           (b) All risk business interruption insurance,
                  including fire, windstorm, flood, earthquake and other risks
                  covered by extended coverage endorsements for full recovery of
                  the net profits of the Hotel for the entire period of any such
                  business interruption, or not less than twelve (12) months;

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

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

                           (e) Comprehensive or Commercial general liability for
                  any claims or losses arising or resulting from the Hotel, with
                  combined single limits of $1,000,000 per each occurrence for
                  bodily injury and property damage. If the General Liability
                  coverages are provided by a Commercial General Liability
                  policy form, the General Aggregate Limit shall not be less
                  than $2,000,000, and it shall apply in total to this Hotel
                  only by specific endorsement. Such insurance shall be on an
                  occurrence policy form and shall include premised and
                  operations, independent contractors, blanket contractual,
                  products and completed operations, advertising injury,
                  employees as additional insureds, broad form property damage,
                  personal injury, incidental medical malpractice, severability
                  of interests, and explosion, collapse and underground coverage
                  during any construction;

                           (f) If the Manager will provide valet parking,
                  garagekeepers liability insurance in a minimum amount of
                  $100,000;

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                           (g) Statutory workers' compensation insurance on all
                  employees in accordance with the requirements of applicable
                  law;

                           (h) Employment practices liability insurance in an
                  amount not less that $1,000,000.00, per occurrence and
                  $1,000,000.00 in the aggregate (the amount of any deductible
                  under such insurance shall be paid out of Gross Revenues
                  unless the claim arises out of Manager's gross negligence or
                  willful misconduct); and

                           (i) Insurance against such other insurable risks as
                  any mortgagee may, from time to time, reasonably require;

                           (j) Liquor Liability (if applicable) for combined
                  single limits of bodily injury and property damage of not less
                  than $1,000,000 per occurrence;

                           (k) Business Auto Liability including owned,
                  non-owned and hired vehicles for combined single limits of
                  bodily injury and property damage of not less than $1,000,000
                  per occurrence;

                           (l) Umbrella Excess Liability in amounts not less
                  than $9,000,000 in excess of the liability insurance required
                  in subsections (e), (g), (j) and (k) immediately above. The
                  amount of such coverage shall be increased as Franchisor
                  requires;

                           (m) Comprehensive crime insurance in a minimum amount
                  of $50,000.

                  5.01.2 Responsibility to Maintain. During the Operating
Period, Lessee, or if and to the extent requested by Lessee, Manager at the
expense of Lessee, shall procure and maintain the insurance policies required
under clauses (a) through (f) and (i) through (l) of Subsection 5.01.1, and
Manager shall procure and maintain the coverages required under clauses (g), (h)
and (m) of that Subsection, at the expense of Lessee.

                  5.01.3 Requirements. All policies of insurance shall be
written on an "occurrence" basis, if possible. The insurance coverage shall in
any event comply with the requirements of the Mortgage, if any. Any deductibles
within the insurance policies required above shall not exceed $25,000, except
for wind, flood, and earthquake deductibles which shall be approved by Lessee or
bought down to $25,000 at the expense of Lessee.

         5.02 Policies and Endorsements.

                  5.02.1 Policies. All insurance provided for under the above
Section 5.01 shall be effected by policies issued by insurance companies of good
reputation and of sound and adequate financial responsibility, and rated no less
than A-VIII in Best's Insurance Guide. The party procuring such insurance shall
deliver to the other party certificates of insurance with respect to all of the
policies of insurance so procured, including existing, additional and renewal
policies, and in the case of insurance about to expire, shall deliver
certificates of insurance with respect to the renewal policies to the other
party not more than thirty (30) days after the respective dates of expiration.
If Lessee shall elect to procure any portion of the property insurance, it shall
also deliver to Manager full copies of the policies under which such insurance
is maintained.

                                       13
<PAGE>

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

                  5.02.3 Named Insureds. All policies of insurance required
under clauses (a) through (d) of Subsection 5.01.1 shall be carried in the name
of Lessee, and, if required, Mortgagee and the lessor under the Ground Lease, if
any, and Manager shall be named as a loss payee as to business interruption
insurance. Losses thereunder shall be payable to the parties as their respective
interests may appear. Notwithstanding the foregoing, if Mortgagee is an
institutional lender, and so requires, losses may be made payable to Mortgagee,
or to a bank or trust company qualified to do business in the state where the
Hotel is located, in either instance as trustee for the custody and disposition
of the proceeds therefrom. Lessee agrees to use reasonable efforts to attempt to
cause any mortgagee to agree that its mortgage shall contain a provision to the
effect that proceeds from property insurance shall be made available for
restoration of the Hotel. All insurance policies required in clauses (e), (f),
and (i) through (l) of Subsection 5.01.1, shall name Lessee and its Affiliates,
directors, officers, agents and employees of each such entity as named insureds,
and Manager, its Affiliates, directors, officers, agents and employees of each
such entity as insureds on a primary basis, irrespective of any other coverage,
whether collectable or not. Policies required in clauses (g), (h) and (m) shall
be written in the name of the employer.

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

         5.04 Insurance by Manager. Any insurance provided by Manager under this
Article V may, subject to Lessee's approval, be effected under policies of
blanket insurance which cover other properties of Manager and its Affiliates,
and Manager shall have the right to charge the Hotel with the Hotel's pro rata
share of such premiums shall be allocated to the Hotel on the same basis as
allocated to participating Other Managed Hotels. Any policies of insurance
maintained by Manager pursuant to the provisions of this Article V may contain
deductible provisions in such amounts as are maintained with respect to Other
Managed Hotels, for which Lessee shall be responsible or which Manager, at
Lessee's expense, may pay.

                                       14
<PAGE>

                                   ARTICLE VI

                                 MANAGEMENT FEE

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

                                   ARTICLE VII

                  ACCOUNTS; WORKING FUNDS; RECORDS AND REPORTS

7.01 Hotel Accounts: Expenditures.

         (a) All funds derived from the operation of the Hotel shall belong to
and be the property of Lessee and shall be deposited daily by Manager in the
Local Operating Account. All disbursements and withdrawals from said accounts as
required or permitted under this Agreement shall be made by bonded
representatives of Manager whose signatures have been authorized. Reasonable
petty cash funds and house banks, in amounts satisfactory to Lessee, shall be
maintained at the Hotel.

         (b) All payments to be made by Manager hereunder shall be made from
authorized bank accounts, from petty cash funds or from Operating Funds provided
by Lessee pursuant to Section 7.02. All debts and liabilities which have been
validly incurred by Manager as a result of its operation and management of the
Hotel pursuant to the terms hereof, whether asserted before or after
Termination, will be paid by Lessee to the extent funds are not available for
that purpose from Gross Revenues. Manager shall not be required to make any
advance or payment to or for the account of Lessee except out of such funds, and
Manager shall not be obligated to incur any liability or obligation for Lessee's
account without assurances that necessary funds for the discharge thereof will
be provided by Lessee.

         (c) All banks accounts shall be owned by Lessee and shall be solely
controlled and operated by Manager ; the agency status of Manager shall be
designated on the checks and drafts drawn on such bank accounts.

         (d) Manager shall, on a bi-weekly basis (on a Friday, or if Friday is a
legal holiday, on the next business day), cause all amounts in the Hotel
operating accounts in excess of the Minimum Balance (as defined below) to be
wired electronically to a bank account designated for such purposes by Lessee.

         (e) Manager shall submit to the Lessee by the fourteenth (14th)
calendar day of each Accounting Period a consolidated report for the Accounting
Period most recently ended detailing the flow of cash into and out of the Local
Operating Account, including investment income, cash deposits, credit card
deposits, payroll checks paid, operating expense checks paid, ACH drafts paid,
wires transmitted to Lessee and any other use of cash. This report must also
reconcile to the sum of the individual general ledger cash balances of the
Hotel.

                                       15
<PAGE>

         7.02 Minimum Balance. During the Term of this Agreement, Lessee shall
maintain cash in the Local Operating Account ("Operating Funds") sufficient in
amount to properly operate the Hotel. If at any time during the Term, the funds
in the Local Operating Account fall below the Minimum Balance (as defined
below), Lessee shall deposit in the Local Operating Account additional funds in
an amount equal to the difference between the funds therein and the Minimum
Balance. As used in this Agreement, "Minimum Balance" means $50,000 in cash.

         7.03 Books and Records. Manager shall keep full and adequate books of
account and such other records as are necessary to reflect the results of the
operation of the Hotel. For this purpose, Lessee agrees that it will make
available to Manager, or its representatives, all books and records pertaining
to the prior operation of the Hotel and any Major Capital Improvements. Manager
shall keep the books and records for the Hotel in all material respects in
accordance with the Uniform System of Accounts for Hotels, on an accrual basis
in accordance with generally accepted accounting principles consistently
applied.

         7.04 Reports to Lessee. Manager shall deliver, or cause to be
delivered, to Lessee the following statements:

                  (a) within fourteen (14) days after the end of each calendar
         month, a detailed profit and loss statement, substantially in the form
         used at Other Managed Hotels, showing the results of operation of the
         Hotel for such month and the year-to-date, and a statement of
         departmental operations, for such month and year-to-date, and having
         annexed thereto a computation in reasonable detail of the Management
         Fee for such preceding month and the year-to-date, calculated as
         provided in the Management Fee Rider and for the second full year of
         the Operating Period, such reports shall include a comparison with the
         prior year's results, and a balance sheet;

                  (b) within fourteen (14) days after the end of each Operating
         Year, an unaudited financial statement consisting of a balance sheet, a
         related statement of profit and loss and a statement of cash flows,,
         and having annexed thereto a computation in reasonable detail of the
         Management Fee for such year, calculated as provided in the Management
         Fee Rider and for the second full year of the Operating Period, such
         reports shall include a comparison with the prior year's results.
         Audited financial statements shall be at Lessee's sole cost and
         expense;

                  (c) Within fifteen (15) days of Lessee's request, a SAS 70
         letter to Lessee at Manager's sole cost and expense.

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

                                       16
<PAGE>

         7.07 Centralized Accounting Services. Manager may, in its reasonable
discretion, handle directly, or through an Affiliate or one of the Other Managed
Hotels, any of the accounting functions for the Hotel, including without
limitation, accounts payable, general ledger, payroll and accounts receivable,
or any part thereof, on a centralized basis with one or more Other Managed
Hotels for the purpose of achieving a more cost-efficient operation of the
Hotel. Manager or its Affiliate or the Other Managed Hotel furnishing such
centralized accounting functions shall be entitled to be reimbursed or paid from
the Hotel Accounts for (i) the pro rata share of the costs and expenses of
providing such accounting functions allocated to the Hotel on the same basis as
allocated to participating Other Managed Hotels utilizing such centralized
accounting services, and (ii) such amounts required to cover or reimburse
Manager, its Affiliate or Other Managed Hotel for the payment of authorized
expenditures by such entity as a part of such centralized accounting services
and as provided on the attached Management Fee Rider.

                                  ARTICLE VIII

                               TERMINATION RIGHTS

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

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

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

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

                           (d) the License Agreement is terminated due to the
                  action or inaction of Manager;

                                       17
<PAGE>

                           (e) the Hotel is sold pursuant to a Permitted
                  Transfer under Section 9.03.2(a) or (b); or

                           (f) In any Operating Year, if Manager fails to
                   maintain a Smith Travel Research RevPar Share Index of at
                   least 120 % market share for the Operating Year for the
                   Hotel.

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

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

                           (a) Lessee shall fail to provide funds to be
                   deposited in the Local Operating Account in accordance with
                   the provisions of Section 7.02 within ten (10) days after
                   Manager's request for such additional funds, and such failure
                   continues for an additional ten (10) day period after written
                   notice by Manager to Lessee that such funds have not yet been
                   received;

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

                           (c) [Intentionally Deleted.]

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

                           (e) if because of a default under the Ground Lease
                   (if any) or the Mortgage, the Ground Lease shall be
                   terminated or the Mortgage shall be foreclosed (or the Hotel
                   sold in lieu of foreclosure) or such steps shall be taken to
                   terminate the Ground Lease or foreclose on the Mortgage such
                   that Manager's ability to manage the Hotel shall be
                   materially adversely affected; or

                                       18
<PAGE>

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

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

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

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

         8.05 Remedies.

                           (a) If this Agreement is terminated due to an event
                  of default by Lessee arising under Section 8.02 which remains
                  uncured after any applicable cure period, Manager shall be
                  entitled to all damages incurred by Manager as a result of
                  such default, including damages resulting from early
                  termination of the Agreement, including but not limited to an
                  early termination fee equal to the average monthly amount of
                  the total Management Fee, including Incentive fees paid or
                  which would have been due or owed to Manager for the Hotel
                  during the immediately preceding twelve (12) month period,
                  multiplied by the lesser of either (i) thirty six (36),
                  provided there are at least three (3) years remaining under
                  the Term, or (ii) the total number of months remaining under
                  the Term if there is less than three (3) years remaining under
                  the Term.

                           (b) If this Agreement is terminated due to an event
                  of default by Manager arising under Section 8.01(a) and (d)
                  which remains uncured after any applicable cure period, Lessee
                  shall be entitled to all damages incurred by Lessee as a
                  result of such default, including damages resulting from early
                  termination of the Agreement, but excluding punitive
                  damages(c) Neither the right of termination nor the right to
                  sue for damages nor any other remedy available to either party
                  hereunder shall be exclusive of any other remedy given
                  hereunder or now or hereafter existing at law or in equity.

                                       19
<PAGE>

         8.06 Intentionally Deleted.

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

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

                                   ARTICLE IX

                                  TITLE MATTERS

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

         9.02 Sale or Assignment by Manager.

                  9.02.1 Prohibited Transfers. Except as provided in the
following Subsection 9.02.2, Manager shall not assign this Agreement,
voluntarily or by operation of law, without the prior written consent of Lessee.
The disposition by Manager of its controlling interest in any Affiliate to which
it has previously assigned this Agreement, shall be deemed to be a prohibited
assignment hereunder requiring the prior written consent of Lessee. Further,
Manager shall not transfer or sell its Management Company, or dispose of the
controlling interest of Manager (or an affiliate thereof) without Lessee's
consent, which shall not be unreasonably withheld. It is understood and agreed
that any consent granted by Lessee to any such assignment or other transfer
shall not be deemed a waiver of the covenant herein contained against assignment
or transfer in any subsequent case. No assignment or transfer of this Agreement
shall operate to release Manager from any of its obligations under this
Agreement.

                  9.02.2 Permitted Transfers. Manager, without the consent of
Lessee, shall have the right to assign this Agreement to any Affiliate of
Manager. Upon execution of any assignment as aforesaid under this Subsection
9.02.2, or with Lessee's consent under Subsection 9.02.1, notice thereof in the
form of a duplicate original of such assignment shall be delivered to Lessee
forthwith.

         9.03 Sale, Lease or Assignment by Lessee.

                                       20
<PAGE>

                  9.03.1 Prohibited Transfers. Except as otherwise provided
herein, Lessee (or the owner of the Hotel) agrees that, without the consent of
Manager, which shall not be unreasonably withheld, it will not sell, lease or
otherwise transfer or convey the Hotel, or any part thereof, or assign this
Agreement, except as provided in this Section 9.03; such prohibition shall
apply, without limitation, to any sale and leaseback transaction.
Notwithstanding the foregoing, Lessee may, without Manager's consent, sell or
otherwise transfer any part of the Land, or grant easements on or across the
Land, provided such conveyances do not materially and adversely affect the
operation of the Hotel.

                  9.03.2. Permitted Transfers.

                           (a) If the Term of this Agreement is not on a
                   month-to-month basis, and if Lessee (or the owner of the
                   Hotel) shall have received a bona fide written offer to
                   purchase or lease the Hotel and Lessee (or the owner of the
                   Hotel), pursuant to the terms of such offer, desires to sell
                   or lease the Hotel to any person, firm or corporation, Lessee
                   (or the owner of the Hotel) shall have the right to sell the
                   Hotel and terminate this Agreement, provided either (a)
                   Lessee pays to Manager a termination payment equal to the
                   average monthly amount of the total Management Fee, including
                   incentive fees paid or which would have been due or owed to
                   Manager for the Hotel during the immediately preceding twelve
                   (12) month period of the Term (or during the actual number of
                   months that have elapsed in the Term if such number of months
                   is less than twelve months), multiplied by the lesser of
                   either (i) Thirty Six (36), provided there are at least three
                   (3) years remaining under the Term, or (ii) the total number
                   of months remaining under the Term if there is less than
                   three 3) years remaining under the Term; or (b) within sixty
                   (60) days following termination, Lessee or any Affiliate)
                   enters into a management agreement with Manager for a
                   replacement hotel or hotels that are commercially reasonably
                   acceptable to Manager, which replacement property shall be a
                   reasonable distance from other hotels that Manager manages
                   and have budgeted annual Gross Operating Revenues no less
                   than the actual annual Gross Operating Revenues of the
                   terminated Hotel (provided that, if Lessee elects to replace
                   pursuant to this clause (b), for any period in which a
                   replacement management agreement is not yet in place Lessee
                   shall pay to Manager the fees which Manager would have
                   received for such period if the termination had not
                   occurred); or (c) Manager is engaged by the third party
                   purchaser to manage the Hotel, on terms acceptable to Manager
                   in its sole discretion, within sixty (60) days following such
                   termination.

                           (b) If the Term of this Agreement is on a
                   month-to-month basis, Lessee (or the owner of the Hotel) may
                   sell or otherwise transfer the Hotel, and terminate this
                   Agreement, upon thirty (30) days written notice to Manager.

                           (c) Notwithstanding the foregoing, Lessee (or the
                  owner of the Hotel) may sell or otherwise transfer the Hotel
                  to any Affiliate of the Lessee at any time.

                                       21
<PAGE>

                           (d) Notwithstanding the foregoing, Lessee (or the
                  owner of the Hotel) may grant a mortgage, deed of trust, or
                  other encumbrance or security interest ("Mortgage") in the
                  Hotel or any part thereof from time to time.

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

                                    ARTICLE X

                             DAMAGE OR DESTRUCTION;

                                 EMINENT DOMAIN

         10.01 Damage or Destruction. If the Hotel shall be substantially
damaged by fire or other casualty, or in the event that Mortgagee does not make
sufficient proceeds of insurance available to Lessee to permit Lessee to rebuild
and restore the Premises to a condition which permits the continued operation of
the Hotel by Manager as contemplated by this Agreement, then Lessee or Manager,
by written notice to the other party given within sixty (60) days after the
occurrence of such event, shall have the right to terminate this Agreement on
the basis that Lessee does not elect to rebuild or restore the Hotel, and
neither party shall have any further obligation to the other party hereunder,
except with respect to liability accruing, or based upon events occurring, prior
to the effective date of such termination. Notwithstanding the foregoing, if
Lessee terminates this Agreement due to fire or casualty as provided above,
Lessee shall pay to Manager a termination fee equal to the average monthly
amount of the total Management Fee, including Incentive fees paid or which would
have been due or owed to Manager for the Hotel during the immediately preceding
twelve (12) month period, multiplied by the lesser of either (i) thirty six
(36), provided there are at least three (3) years remaining under the Term, or
(ii) the total number of months remaining under the Term if there is less than
three (3) years remaining under the Term. Manager shall not be entitled to any
such termination fee in the event Manager terminates as provided above. For the
purposes hereof, the Hotel shall be deemed to have been substantially damaged if
the estimated length of time required to restore the Hotel substantially to its
condition and character just prior to the occurrence of such casualty shall be
in excess of one hundred eighty (180) days. If this Agreement shall not
terminate in the event of damage to the Hotel, either because (i) the damage
does not amount to substantial damage as described above, or (ii)
notwithstanding substantial damage to the Hotel, neither party has elected to
terminate this Agreement, Lessee shall elect to restore the Hotel, then Lessee
shall proceed with all due diligence to commence and complete the restoration of
the Hotel to its condition and character just prior to the occurrence of such
casualty, but only to the extent of insurance proceeds available to Lessee.

         10.02 Eminent Domain. If all of the Premises, or such substantial
portion thereof as to make it infeasible, in the reasonable opinion of Lessee or
Manager, to restore and continue to operate the remaining portion for the
purposes contemplated hereby, shall be taken through the exercise, or by
agreement in lieu of the exercise, of the power of eminent domain, then
effective upon the date that Lessee shall be required to surrender possession of
the Premises, or a portion thereof,

                                       22
<PAGE>

either party may terminate this Agreement and neither party shall have any
further obligation to the other party hereunder, except with respect to
liabilities accruing, or based upon events occurring, prior to the effective
date of such termination. In the event a substantial portion of the Premises is
taken, but Mortgagee fails or refuses to make available to Lessee sufficient
proceeds of such eminent domain proceedings in order to permit Lessee to make
appropriate alterations, restorations or repairs to the remainder of the
Premises, so that the Hotel would continue to be operable for the purposes
herein contemplated, then Lessee shall have the right to terminate this
Agreement upon written notice to Manager and, upon the date that Lessee shall be
required to surrender possession of the Premises to the condemning authority,
this Agreement shall terminate and neither party shall have any further
obligation to the other party hereunder, except with respect to liabilities
accruing, or based upon events occurring, prior to the effective date of such
termination. Any election to terminate this Agreement must be made within thirty
(30) days of receipt of actual written notice from the condemning authority
setting out the details of the proposed taking. If such notice does not provide
the parties with sufficient detail so that a decision may be made regarding
termination, the parties may mutually agree to extend the above time period in
their discretion. In the event this Agreement is not terminated due to eminent
domain in this section 10.02, then Lessee shall proceed with all due diligence
to repair any damage to the Hotel, or to alter or modify the Hotel so as to
render it a complete architectural unit which can be operated as a hotel of
substantially the same type and class as before, but only to the extent of
condemnation proceeds available to Lessee. Lessee and/or its Lessor shall be
solely entitled to any Award, subject only to any exceptions set out below.
Manager may seek an award from the condemning authority for its loss of business
interest only, if such separate claim is permitted. In the event the condemning
authority does award Manager for such loss, Manager shall only be entitled to
retain that portion of its condemnation award which is necessary to compensate
Manager for its lost management fees, which shall be calculated in the same
manner as termination fees for Damage by Casualty, as set out above in Section
10.01. Manager shall promptly remit any additional amount to Lessee. In the
event any jurisdiction would permit both Manager and Lessee to seek an award for
their loss of business interests (respectively), this section shall not prohibit
Lessee from making a separate claim therefor. Lessee shall compensate Manager
for its lost management fees (calculated in the same manner as termination fees
for Damage by Casualty, as set out above in Section 10.01) only if Manager is
not permitted to seek an award directly from the condemning authority, and only
to the extent of any actual condemnation proceeds received by Lessee.

                                   ARTICLE XI

                                 REPRESENTATIONS
         11.01 Manager's Representations. The Manager covenants, represents and
warrants as follows:

         11.01.1 Qualified Lodging Facility. During the Term of this Agreement,
the Manager shall qualify as an "eligible independent contractor" as defined in
Section 856(d)(9) of the Internal Revenue Code of 1986, as amended (the "Code").
To that end, during the Term of this Agreement, the Manager:

                                       23
<PAGE>

                           (i) shall not permit wagering activities to be
                  conducted at or in connection with the Hotel;

                           (ii) shall not own, directly or indirectly (within
                  the meaning of Section 856(d)(5) of the Code), more than 35%
                  of the shares of Equity Inns, Inc.;

                           (iii) shall be actively engaged in the trade or
                  business of operating "qualified lodging facilities" (defined
                  below) for persons who are not "related persons" within the
                  meaning of Section 856(d)(9)(F) of the Code with respect to
                  Equity Inns, Inc. or the Lessee ("Unrelated Persons"). In
                  order to meet this requirement, the Manager agrees that it (i)
                  shall derive at least 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 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 (so long as the Lessee has advised the Manager in
                  writing of such regulations or other administrative guidance).

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 Equity Inns, Inc.

         11.01.2 Rents from Real Property. During the Term of this Agreement,
the Manager shall not sublet the Hotel or enter into any similar arrangement on
any basis such that the rental or other amounts to be paid by the sublessee
thereunder would be based, in whole in part, on either (i) the net income or
profits derived by the business activities of the sublessee or (ii) any other
formula such that any portion of the rent would fail to qualify as "rents from
real property" within the meaning of Section 856(d) of the Code, or any similar
or successor provision thereto.

         11.01.3 Termination for Failure of Representations. In the event that
the foregoing representations become false, Lessee shall have the rights
afforded by Section 8.01 herein, and Manager shall have the benefit of any cure
period offered therein. Notwithstanding the foregoing and/or anything in Section
8.01 or elsewhere herein to the contrary, should the REIT status of Equity Inns,
Inc. and/or Equity Inns Trust be threatened because the foregoing
representations are false, then any cure period offered in Section 8.01 shall be
reduced in part or in full to the extent necessary to avoid any termination or
other material impact on the REIT status of Equity Inns, Inc. and/or Equity Inns
Trust whereupon Lessee may summarily terminate this Agreement upon written
notice to Manager, and subject to Lessee's existing loan documents.

         11.02 Representations of Lessee. The Lessee covenants, represents and
warrants as follows:

                                       24
<PAGE>

     (a) The Lessee is the lessee of the Hotel and has full power and authority
to enter into this Agreement;

     (b) The Hotel is zoned for use as a hotel, motor hotel or resort, and all
necessary governmental and other permits and approvals for such use and for the
food and beverage (including the sale and service of liquor, if applicable)
operations of the Hotel have been obtained and are in full force and effect; and

     (c) Throughout the term of this Agreement, the Lessee will pay, keep,
observe and perform all payments, terms, covenants, conditions and obligations
under any lease or other concession, any deed of trust, mortgage or other
security agreement, and any real estate taxes or assessments covering or
affecting the Hotel, unless compliance with or payment thereof is, in good
faith, being contested and enforcement thereof is stayed.

                                   ARTICLE XII

                               GENERAL PROVISIONS

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

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

                                       25
<PAGE>

         12.03 Indemnities.

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

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

                  12.03.3 Intentionally Deleted.

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

                  12.03.5 Intentionally Deleted.

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

         12.04 Arbitration of Financial Matters.

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

                           (a) computation of the Management Fee;

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

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

                                       26
<PAGE>

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

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

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

         12.05 Attorneys' Fees. In the event of any litigation arising out of
this Agreement, the prevailing party shall be entitled to reasonable costs and
expenses, including without limitation, reasonable attorneys' fees.

         12.06 Intentionally Omitted.

         12.07 Restriction Upon Area Projects. Lessee agrees that Manager has
and shall retain the right to own, have an ownership interest in, develop,
operate, manage, license, franchise, sell or rent other hotels or inns of any
kind, or shared ownership projects commonly known as vacation ownership or
time-share ownership projects (or similar real estate projects), under the
"Manager" or other name and wherever located except on the Land under this
Agreement, and nothing contained in this Agreement shall prohibit or limit
Manager from engaging in any such activities, which shall not give rise to any
liability for claims relating to unfair competition and/or breach of the implied
covenant of good faith and fair dealing; provided that Manager shall

                                       27
<PAGE>

not own, have an interest in develop, operate, manage, license, or rent a hotel
within the geographic radius of the Competitive Set of the Hotel as listed in
the Smith Travel Research Report as of the date of this Agreement, except with
Lessee's written consent or as is specifically provided in the section herein
entitled "Right of First Refusal". The following properties shall be
specifically excluded from the immediately preceding restriction: Hampton Inn -
Palm Beach Airport and Hampton Inn & Suites - Wellington Green Mall.

         12.08 Major Capital Improvements.

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

                   12.08.2 Development. The development of any Major Capital
Improvement shall be the responsibility of Lessee and shall be paid for out of
separate funds of Lessee.

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

         12.09 Force Majeure. If act of God, acts of war, acts of terrorism,
civil disturbance, labor strikes, governmental action, including the revocation
of any material license or permit necessary for the operation contemplated in
this Agreement where such revocation is not due to Manager's fault, or any other
causes beyond the control of Manager shall, in Manager's reasonable opinion,
have a significant adverse effect upon the operations of the Hotel, then Manager
shall be entitled to terminate this Agreement upon sixty (60) days' written
notice from the date of such event; provided, however, such termination shall
not be effective if the event giving rise to the termination has been cured to
the reasonable satisfaction of Manager within such sixty (60) day period.

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

         If to Lessee:
                           Lessee
                           7700 Wolf River Boulevard
                           Germantown, TN 38138
                           Attn: Richard Mitchell
                           Phone: (901) 754-7774
                           Fax: (901) 754-2374

                                       28
<PAGE>

         If to Manager:
                           Hospitality Group, Inc.
                           123 North Congress #358
                           Boynton Beach, Florida  33426
                           Attn: John Costas
                           Phone: (561) 738-1405
                           Fax: (561) 738-6706

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

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

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

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

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

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

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

                                       29
<PAGE>

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

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

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

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

         12.21 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         12.22 Subordination. This Agreement shall be subordinate to any
mortgage encumbering the Hotel, and Manager agrees to enter into a
lender-manager agreement with respect to the Hotel, which agreement shall
contain reasonable lender-manager provisions, including, without limitation,
Manager's acknowledgement that its real estate interest in and to the Hotel, if
any, created by this Agreement is subordinate to any mortgage encumbering such
Hotel, including providing any purchaser of such Hotel at a foreclosure sale or
deed-in-lieu of foreclosure (including the lender) with the right to terminate
this Agreement with respect to such Hotel; provided, however, in no event will
Manager agree to subordinate or waive its right to receive fees, reimbursements
or indemnification payments under this Agreement arising prior to termination
(but (a) if this Agreement is terminated by the lender or such purchaser with
respect to such Hotel, Manager shall not look to the lender for payment of such
fees, reimbursements or indemnification payments and Manager's right to receive
such fees, reimbursements or indemnification payments shall be subordinated to
the lender's rights and (b) if this Agreement is not terminated by the lender or
such purchaser with respect to such Hotel, then such fees, reimbursements or
indemnification payments shall be payable by the lender or such purchaser).

                                       30
<PAGE>

         12.24 Closing Contingency. This Agreement will only become effective
upon the successful closing of the purchase and sale of the Hotel from an
affiliate of Manager to an affiliate of Lessee.

         12.25 Right of First Refusal. (A) During the period which ends upon the
earlier of (i) sixty (60) months from the date hereof, (ii) the first date on
which Manager no longer manages the Hotel, or (iii) Lessee or its affiliates
sells the hotel or sells controlling interest of the Company (herein the "ROFR
Term"), Lessee shall have the right to negotiate with Manager, Fee Manager
and/or any affiliated or related entities (collectively herein, the "Manager
Entities") with regard to participation in any hotel purchases and/or
developments to be undertaken by the Manager Entities. If at any time during the
ROFR Term, the Manager Entities shall desire to purchase or develop a hotel
property within the geographic radius of the Competitive Set of the Hotel as
listed in the Smith Travel Research Report as of the date of this Agreement
("Competitive Area"), the Manager Entities shall notify Lessee thereof prior to
making such acquisition or development and/or prior to forming any new
investment entity to make such acquisition or development. Upon Lessee's
request, to be given by Lessee in writing no later than ten (10) days after
being notified by the applicable Manager Entities, the Applicable Manager
Entities shall promptly deliver to Lessee any pertinent information known to
Manager Entities and reasonably requested by Lessee regarding said transaction.
Lessee may, within thirty (30) days following notice from the Manager Entities,
negotiate with Manager Entities concerning participation in the transaction,
whether as Lessee (with one of the Manager Entities managing the hotel
property), or in a joint venture with one or more of the Manager Entities, or
otherwise. Manager Entities shall negotiate in good faith with Lessee, and shall
make their decisions whether Lessee shall participate and the manner of
participation based on the reasonable business judgment of the Manager Entities.
If no agreement is reached between Manager Entities and Lessee by the 31st day
after the Manager Entities' notice to Lessee, Manager Entities shall be free to
exploit the business opportunities concerning which Lessee was given notice,
free of any rights of, or interference by, Lessee. In such event, Manager
Entities shall not be required to exploit or be prohibited from exploiting, such
opportunities in any particular manner merely because such particular manner was
discussed (or not discussed) with Lessee in the negotiation process.

                  (B) Lessee's right to negotiate future opportunities set forth
above shall remain applicable to all intended purchases and developments by the
Manager Entities within the Competitive Area.

                  (C) Manager warrants that Manager will re-offer the
development of any project contemplated above to Lessee if the terms of
Manager's proposed offer to another party is materially more favorable to such
other party than was last offered to Lessee. Lessee will respond within seven
(7) days on such re-offer. Should Lessee not respond affirmatively within said
seven (7) days, then Manager shall be free to proceed with the development of
the Project.

                  (D) The following properties shall be specifically excluded
from the preceding right of first refusal: Hampton Inn - Palm Beach Airport and
Hampton Inn & Suites - Wellington Green Mall. IN WITNESS WHEREOF, the parties
hereto have executed or caused this Agreement to be executed, all as of the day
and year first above written.

                                       31
<PAGE>

                                            LESSEE:

                                            ENN Leasing Company, Inc.
                                            a Tennessee Corporation

                                            By  /s/ Howard Silver
                                               ---------------------------------
                                                   Howard Silver
                                                   President

                                            MANAGER:

                                            Hospitality Group, Inc.,
                                            a Florida corporation

                                            By: /s/ John S. Costas
                                               ---------------------------------
                                            Name:   John S. Costas
                                                 -------------------------------
                                            Title:  President
                                                  ------------------------------

                                       32

<PAGE>

                              MANAGEMENT FEE RIDER
                               Hotel - City, State

                  A. Gross Operating Revenues. The term Gross Operating Revenues
as used in this Agreement shall mean all receipts, revenues, income and proceeds
of sales of every kind received by Manager directly or indirectly from the
operation of the Hotel. Gross Operating Revenues shall exclude all sales and
excise taxes and any similar taxes collected as direct taxes payable to taxing
authorities; gratuities or service charges collected for payment to and paid to
employees; credit or refunds to guests; proceeds of insurance, save and except
for proceeds of insurance with respect to use and occupancy or business
interruption insurance; proceeds of sales of real estate and/or furniture,
fixtures and equipment; proceeds of refinancings; and proceeds of condemnation.

                  B. Net Operating Income. The term "Net Operating Income" as
used in this agreement shall mean the excess, during each Calendar Year (and
proportionally for any period less than a Calendar Year), of Gross Operating
Revenues over expenses and deductions incurred in the operation of the Hotel by
Manager in fulfilling its duties hereunder during such period determined in
accordance with the accounting system established by the Uniform System (except
as modified by this Agreement). In arriving at Net Operating Income, all
expenses shall be proper deductions from Gross Operating Revenues insofar as
they relate to the operation of the Hotel, including, without limit, all Base
Management Fees, license fees, franchisor royalties, real estate and special
assessment taxes, property and liability insurance, a reserve of three percent
(3%) of Gross Operating Revenue for capital improvements (whether or not such
reserve is held in escrow) and fees and direct out-of-pocket charges of Manager
or its affiliates as well as corporate charges (as described below).

In accordance with Manager's past practices, out-of-pocket costs and corporate
charges may include, but are not limited to travel costs for corporate staff
traveling specifically on behalf of or for the benefit of the Hotel;

                  C. Base Management Fee.  During each Calendar Year after the
Management Commencement Date (and for a fraction of any partial Calendar Year),
in consideration of the services Manager is to render under this Agreement,
Manager will be paid a fee ("Base Management Fee") at the rate of two percent
(3.0%) of Gross Operating Revenues of the Hotel per Calendar Year:

         The Base Management Fee will be paid in installments by deducting such
fee from Gross Operating Revenues of the Hotel immediately following each
Accounting Period at the rate of the corresponding percentage of Gross Operating
Revenues for that Accounting Period. At the end of each Accounting Period, an
adjustment will be made on a cumulative year-to-date basis, if necessary, and
all sums due either the Manager or Lessee shall be paid immediately.

                  E. Incentive Fees. Manager and Lessee have entered into
Management Agreements for the management of four (4) other properties. The
Hotel, in addition to the four (4) additional properties shall be referred to as
the "Hotel Group". The Hotel Group properties are: Hampton Inn, Boca Raton,
Florida; Hampton Inn & Suites, Boynton Beach, Florida; Hampton Inn, Deerfield
Beach, Florida; Hampton

                                       33
<PAGE>

Inn, Palm Beach Gardens, Florida; Hampton Inn, West Palm Beach, Florida. In
addition to the Base Management Fee, during each Calendar Year after the
Management Commencement Date (and for any partial Calendar Year) in which
Manager is to render services under this Agreement, Manager will be paid an
incentive fee as based on the consolidated Net Operating Income of the Hotel
Group as follows:

                  For any Calendar Year in which the Net Operating Income of the
                  Hotel Group on a consolidated basis, or for any partial
                  Calendar Year in which the Net Operating Income on a prorated
                  basis, is greater or equal to $7,600,000 (Target NOI), Manager
                  shall be paid an Incentive Fee equal to 1% of Gross Operating
                  Revenues.

Manager and Lessee shall mutually agree on an adjusted Target NOI any time
Lessee loses its legal interest in any of the hotels in the Hotel Group and/or
Manager ceases to manage any of the hotels in the Hotel Group.

                  G. The Incentive Fee will be payable to Manager from Gross
Operating Revenues of the Hotel Group on a quarterly basis with a final
reconciliation following the end of each Calendar Year, and shall be allocated
among the Hotel Group in accordance with Lessee's direction. The Manager will
submit to the Lessee the calculation of the Incentive Fee quarterly along with
the delivery of the financial statements pursuant to Section 7.04 of the
Management Agreement, after which the Lessee shall have ten (10) calendar days
to advise the Manager of any disagreement with such calculation quarterly and
annually. Following the Calendar Year-end audit conducted by Lessee or Lessee's
representatives, an adjustment will be made if necessary, and all sums due
either Manager or Lessee shall be paid immediately.

                                       34
<PAGE>

                                    EXHIBIT I
                                     "Land"

                                   Hampton Inn
                            Deerfield Beach, Florida

                                       35<PAGE>

                                                                 Exhibit 10.32

================================================================================

                              MANAGEMENT AGREEMENT

                                       for

                              Courtyard by Marriott
                                 Dalton, Georgia

                                 by and between

                            ENN LEASING COMPANY, INC.

                                   as Lessee,

                                       and

                           Gateway Lodging Co., Inc.,

                                   as Manager,

                             Dated November 1, 2004

================================================================================

<PAGE>

                              MANAGEMENT AGREEMENT

         THIS AGREEMENT, made as of November 1, 2004 by and between ENN
LEASING COMPANY, INC., a Tennessee corporation ("Lessee"), having its principal
office at 7700 Wolf River Boulevard, Germantown, Tennessee 38138 and GATEWAY
LODGING CO., INC., a _____________________ corporation ("Manager"), having a
principal office at ______________________.

                              PRELIMINARY STATEMENT

         A. Lessee is the lessee of a first-class Courtyard by Marriott hotel on
the land herein described.

         B. Manager is an independent contractor engaged in the management of
hotels throughout the United States, and Manager is experienced in the various
phases of hotel operations.

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

         NOW, THEREFORE, Lessee and Manager agree as follows:

                                    ARTICLE I

                                   DEFINITIONS

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

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

                  1.01.2 Capital Renewals - a collective term for (a) normal
capital replacements of, or additions to, FF&E, and (b) special projects
designed to maintain the Hotel in a first-class condition in accordance with the
standards contemplated by this Agreement, including without limitation,
renovation of the guest room areas, public space, food and beverage facilities,
or back of the house areas, which projects will generally comprise replacements
of, or additions to, FF&E, but may include revisions and alterations in the
Improvements; most of the expenditures for such special projects will be
capitalized, but a portion thereof may be currently expended, such as the
purchase of smaller items of FF&E, or expenditures which are ancillary to the
overall

                                       2
<PAGE>

project but which are properly chargeable to Property Operations and Maintenance
under the Uniform System of Accounts for Hotels.

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

                  1.01.4 Claims - as defined in Subsection 12.03.1.

                  1.01.5 CPI - as defined in Subsection 4.02.3.

                  1.01.6 Commencement Date - ___________, 2004 (or such other
date as the parties may agree upon), the date Manager begins operating the Hotel
under the Agreement.

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

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

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

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

                  1.01.12 Gross Operating Profit (GOP) - the excess of Gross
Operating Revenues over expenses and deductions incurred in the operation of the
Hotel by Manager in fulfilling its duties hereunder, determined in accordance
with the accounting system established by the Uniform System (except as modified
by this Agreement). In arriving at Gross Operating Profit, all expenses shall be
proper deductions from Gross Operating Revenues insofar as they relate to the
operation of the Hotel including, without limit, all Base Management Fees,
license fees, franchisor royalties and fees, and direct out-of-pocket charges of
Manager or its affiliates as well as corporate charges.

                  1.01.13 Gross Revenues - as defined in the Management Fee
Rider.

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

                  1.01.15 Intentionally Deleted.

                                       3
<PAGE>

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

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

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

                  1.01.20 Initial Term - as defined in Section 2.01.

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

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

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

                  1.01.24 License Agreement - the Franchise Agreement dated
_______________ between Marriott International, Inc., as franchisor, and Lessee,
as franchisee, licensing the operation of the Hotel under the Courtyard by
Marriott name.

                  1.01.25 Local Operating Account - one or more bank accounts
established by Manager for Lessee in one or more banks approved by Lessee.

                  1.01.26 Major Capital Improvements - as defined in Subsection
12.08.1.

                  1.01.27 Managed Hotels - a collective term for the Hotel and
all other hotels within the United States of America owned, leased and/or
operated under the Courtyard by Marriott name by Manager or its Affiliates.

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

                  1.01.29 Minimum Balance - as defined in Section 7.02.

                  1.01.30 Mortgage - as defined in Section 9.03.2.

                  1.01.31 Net Operating Income - as defined in the Management
Fee Rider.

                                       4
<PAGE>

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

                  1.01.33 Operating Funds - as defined in Section 7.02.

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

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

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

                  1.01.37 Other Managed Hotels - all hotels and inns within the
United States other than the Hotel owned, leased and/or operated by Manager or
any of its Affiliates.

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

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

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

                  1.01.41 Term - as defined in Section 2.01.

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

                                       5
<PAGE>

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

                                   ARTICLE II

                                TERM AND RENEWAL

         2.01 The Term. The initial term of this Agreement ("Initial Term")
shall commence on the date hereof and shall expire at midnight of the day
preceding the date which is three (3) years from the Commencement Date.

         2.02 Renewal. There is no renewal term being granted in this Agreement.
Lessee and Manager shall, prior to the expiration of the Initial Term, use
reasonable efforts to agree on the terms and conditions necessary for renewal of
this Agreement. If Lessee and Manager have not agreed upon such terms and
conditions prior to the expiration of the Initial Term, this Agreement shall
continue in effect on a month-to-month basis for a maximum period of six months
following expiration of the Initial Term. If Lessee and Manager have not agreed
on acceptable renewal terms and conditions on or before the expiration of any of
the month-to-month periods, either Lessee or Manager may terminate this
Agreement on 30 days written notice to the other party.

                                   ARTICLE III

Intentionally Deleted.

                                   ARTICLE IV

                                OPERATING PERIOD

         4.01 Authority and Duty of Manager. Manager shall have the sole and
exclusive right and obligation to manage and operate the Hotel pursuant to the
terms of this Agreement and Manager agrees that it shall manage and operate the
Hotel as a first-class hotel comparable to Other Managed Hotels in accordance
with the standards for Courtyard by Marriott hotels, taking into account the
size, location and character of the Project. In connection therewith, Manager
shall have the authority and responsibility, subject to the provisions of this
Agreement, to (i) determine operating policy, standards of operation, quality of
service, the maintenance and physical appearance of the Hotel and any other
matters affecting operations and management; (ii) supervise and direct all
phases of advertising, sales and business promotion for the Hotel; and (iii)
carry out all programs contemplated by the Operating Budgets and, as directed by
Lessee,

                                       6
<PAGE>

the Capital Renewals Budgets, which have been approved by Lessee pursuant to
Section 4.02. Lessee agrees that it will cooperate reasonably with Manager to
permit and assist Manager to carry out its duties hereunder.

         4.02 Operating Budgets and Capital Renewals Budgets.

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

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

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

Budgets for Major Capital Improvements initiated under Section 12.08 shall be
treated separately and shall not be included in the Capital Renewals Budget.

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

                  4.02.3 Approval of Budgets. The Operating Budgets and the
Capital Renewals Budget shall be subject to the approval of Lessee, which shall
not be unreasonably withheld or delayed, it being contemplated that each such
Operating Budgets and Capital Renewals Budget shall be agreed upon by the
parties within thirty (30) days after the submission of the same by Manager to
Lessee. If Lessee shall fail to approve any Operating Budgets or Capital
Renewals Budget within thirty (30) days after its submittal by Manager, or to
submit its written objections thereof to Manager within such period, in case of
a dispute with regard to any Operating Budgets, then pending the settlement
thereof, or until such dispute is resolved in accordance with Section 12.04,
Manager shall be entitled to continue to operate the Hotel in accordance with
the standards set forth herein and shall be entitled to make expenditures which
are consistent with the Operating Budget for the immediately preceding Operating
Year; provided that, subject to the standards of performance described in
Subsection 4.02.4 below, the maximum approved amount of such expenditures shall
be equal to (a) the aggregate of all items set forth in the Operating Budget
which are not disputed by Lessee, plus (b) with respect to all items in the
Operating Budget which are disputed or objected to by Lessee, the amount
allocated to such item(s) in the Operating Budget for the immediately preceding
Operating Year increased by the greater of (i) five percent (5%), or (ii) the
difference between the Consumer Price Index (All Cities - All Items) (1982-84 =
100) (the "CPI"), on January 1 of the Operating Year immediately preceding the
Operating Year in question and the CPI on January 1 of the Operating Year in
question.

                                       7
<PAGE>

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

                  4.02.5 Intentionally Deleted.

                  4.02.6 Compliance with Capital Renewals Budget. Manager shall
at all times comply with the applicable Capital Renewals Budget as directed by
Lessee, and shall not deviate in any substantial respect therefrom without the
prior written consent of the Lessee. Notwithstanding the foregoing, Manager
shall be entitled to make additional expenditures not authorized under the then
applicable Capital Renewals Budget in case of emergencies arising out of fire or
any other like or unlike casualty, or in order to comply with any applicable
Legal Requirements. Manager will promptly notify Lessee of any expenditures not
authorized under the then applicable Capital Renewals Budget.

         4.03 Intentionally Deleted.

         4.04 Intentionally Deleted.

         4.05 Personnel.

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

                  4.05.2 Manager/Affiliate as Employer. All employees (other
than the Executive Staff as employed under 4.05.1) of the Hotel shall be
employees of Manager or an affiliate of Manager ("Affiliate"), and all
Compensation of such employees shall be paid by Manager or Affiliate, and the
amount of such payments shall immediately be reimbursed to Manager/Affiliate by
Lessee in accordance with Section 4.07 hereof. Manager shall also have the right
to use employees of Manager or its Affiliates not located at the Hotel to
provide services to the Hotel ("Off-Site Personnel") and the right to have the
general manager of the Hotel serve as the regional manger for Other Managed
Hotels, and all Compensation of such Off-Site Personnel shall immediately be
reimbursed to Manager/Affiliate by Lessee in accordance with Section 4.07
hereof, except Manager shall allocate a portion of said Regional Managers'
salaries and benefits to the supervised hotels. Likewise, Manager may also
allocate a

                                       8
<PAGE>

portion of other Regional Manager's salaries and benefits from other supervised
hotels to the Hotel for benefits received by Hotel for such services; provided
that all such allocations shall have been approved during the budgeting process
for the then-current year. Manager shall also have the right to have Off-Site
Personnel performing regional or area duties relating to the Hotel and Other
Managed Hotels lodged at the Hotel from time to time free of charge.
Accordingly, Manager shall arrange to have established appropriate payroll
accounts covering all such employees of the Hotel. Arrangements shall be made
such that Manager can draw on the Hotel Accounts to transfer funds to such
payroll accounts immediately upon payment of such Compensation. Manager shall
indemnify and hold Lessee harmless from and against any and all actions, suits,
claims, penalties, losses, damages and expenses, including reasonable attorneys'
fees, based upon or arising out of Manager's gross negligence or willful
misconduct in connection with the employment of any and all Hotel employees,
including but not limited to any claims based upon discrimination in employment.

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

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

                  4.05.5 Business Expenses. The Executive Staff and other
appropriate employees of the Hotel shall also be reimbursed for all reasonable
business expenses pertaining to the Hotel, including business entertainment and
travel expenses, in accordance with the standard practices in effect at Other
Managed Hotels.

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

                  The parties agree and acknowledge that Manager may (but shall
not be required to) provide benefits and allow participation in such plans on
whatever modified basis as it may determine appropriate under the circumstances,
and may waive any waiting period or any

                                       9
<PAGE>

preconditions to coverage or participation otherwise applicable to such
employees. No statement, promise, representation or warranty regarding the terms
of such plans or the participation or coverage of employees shall be
enforceable, binding or effective in any way unless made in writing and signed
by an authorized representative of Manager.

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

                  4.06 Additional Responsibilities of Manager.

                  4.06.1 Manager shall in its own name, perform the following
additional services, or cause the same to be performed for the Hotel:

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

                           (b) subject to compliance with the applicable Capital
                  Renewals Budget and subject to Section 4.06.02(b) hereof, and
                  if directed by the Lessee, make all repairs, decorations,
                  revisions, alterations and improvements to the Hotel as shall
                  be reasonably necessary for the proper maintenance thereof in
                  good order, condition and repair;

                           (c) subject to Section 4.06.02(b) hereof, purchase
                  such Operating Equipment and Operating Supplies as shall be
                  reasonably necessary for the proper operation of the Hotel in
                  accordance with the Operating Budgets;

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

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

                           (f) in accordance with the Operating Budgets, pay all
                  Impositions and insurance premiums, when due;

                           (g) use its reasonable best efforts to cause the
                  Hotel to comply with all applicable covenants and provisions
                  of the Ground Lease (if any) and Mortgage,

                                       10
<PAGE>

                  and pay, when due, the installments of rental under the Ground
                  Lease (if any) and of principal and interest on the Mortgage,
                  if directed by the Lessee; and

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

                           4.06.02. Except in the following instances, the
                  parties agree that Manager shall not be acting as agent of
                  Lessee. Manager shall, as agent of Lessee, either in its own
                  name or in the name of the Lessee, perform the following
                  additional services, or cause the same to be performed for the
                  Hotel:

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

                           (b) enter into any contracts, purchase orders or work
         orders for goods or services to the Hotel; provided that Lessee's prior
         written approval shall be required for any contract having a
         non-terminable term in excess of one year, or if the amount of the
         aggregate expenditures thereunder would, or are reasonably anticipated
         to, exceed $25,000.00 in the aggregate per annum.

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

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

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

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

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

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

                                       11
<PAGE>

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

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

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

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

                                    ARTICLE V

                                    INSURANCE

         5.01 Coverage.

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

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

                           (b) All risk business interruption insurance,
                  including fire, windstorm, flood, earthquake and other risks
                  covered by extended coverage endorsements for full recovery of
                  the net profits of the Hotel for the entire period of any such
                  business interruption, or not less than twelve (12) months;

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

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

                           (e) Comprehensive or Commercial general liability for
                  any claims or losses arising or resulting from the Hotel, with
                  combined single limits of $1,000,000 per each occurrence for
                  bodily injury and property damage. If the General Liability
                  coverages are provided by a Commercial General Liability

                                       12
<PAGE>

                  policy form, the General Aggregate Limit shall not be less
                  than $2,000,000, and it shall apply in total to this Hotel
                  only by specific endorsement. Such insurance shall be on an
                  occurrence policy form and shall include premised and
                  operations, independent contractors, blanket contractual,
                  products and completed operations, advertising injury,
                  employees as additional insureds, broad form property damage,
                  personal injury, incidental medical malpractice, severability
                  of interests, and explosion, collapse and underground coverage
                  during any construction;

                           (f) If the Manager will provide valet parking,
                  garagekeepers liability insurance in a minimum amount of
                  $100,000;

                           (g) Statutory workers' compensation insurance on all
                  employees in accordance with the requirements of applicable
                  law;

                           (h) Employment practices liability insurance in an
                  amount not less that $1,000,000.00, per occurrence and
                  $1,000,000.00 in the aggregate (the amount of any deductible
                  under such insurance shall be paid out of Gross Revenues
                  unless the claim arises out of Manager's gross negligence or
                  willful misconduct); and

                           (i) Insurance against such other insurable risks as
                  any mortgagee may, from time to time, reasonably require;

                           (j) Liquor Liability (if applicable) for combined
                  single limits of bodily injury and property damage of not less
                  than $1,000,000 per occurrence;

                           (k) Business Auto Liability including owned,
                  non-owned and hired vehicles for combined single limits of
                  bodily injury and property damage of not less than $1,000,000
                  per occurrence;

                           (l) Umbrella Excess Liability in amounts not less
                  than $9,000,000 in excess of the liability insurance required
                  in subsections (e), (g), (j) and (k) immediately above. The
                  amount of such coverage shall be increased as Franchisor
                  requires;

                           (m) Comprehensive crime insurance in a minimum amoun
                  of $50,000.

                  5.01.2 Responsibility to Maintain. During the Operating
Period, Lessee, or if and to the extent requested by Lessee, Manager at the
expense of Lessee, shall procure and maintain the insurance policies required
under clauses (a) through (f) and (i) through (l) of Subsection 5.01.1, and
Manager shall procure and maintain the coverages required under clauses (g), (h)
and (m) of that Subsection, at the expense of Lessee.

                  5.01.3 Requirements. All policies of insurance shall be
written on an "occurrence" basis, if possible. The insurance coverage shall in
any event comply with the requirements of the Mortgage, if any. Any deductibles
within the insurance policies required above shall not exceed $25,000, except
for wind, flood, and earthquake deductibles which shall be approved by Lessee or
bought down to $25,000 at the expense of Lessee.

                                       13
<PAGE>

         5.02 Policies and Endorsements.

                  5.02.1 Policies. All insurance provided for under the above
Section 5.01 shall be effected by policies issued by insurance companies of good
reputation and of sound and adequate financial responsibility, and rated no less
than A-VIII in Best's Insurance Guide. The party procuring such insurance shall
deliver to the other party certificates of insurance with respect to all of the
policies of insurance so procured, including existing, additional and renewal
policies, and in the case of insurance about to expire, shall deliver
certificates of insurance with respect to the renewal policies to the other
party not more than thirty (30) days after the respective dates of expiration.
If Lessee shall elect to procure any portion of the property insurance, it shall
also deliver to Manager full copies of the policies under which such insurance
is maintained.

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

                  5.02.3 Named Insureds. All policies of insurance required
under clauses (a) through (d) of Subsection 5.01.1 shall be carried in the name
of Lessee, and, if required, Mortgagee and the lessor under the Ground Lease, if
any, and Manager shall be named as a loss payee as to business interruption
insurance. Losses thereunder shall be payable to the parties as their respective
interests may appear. Notwithstanding the foregoing, if Mortgagee is an
institutional lender, and so requires, losses may be made payable to Mortgagee,
or to a bank or trust company qualified to do business in the state where the
Hotel is located, in either instance as trustee for the custody and disposition
of the proceeds therefrom. Lessee agrees to use reasonable efforts to attempt to
cause any mortgagee to agree that its mortgage shall contain a provision to the
effect that proceeds from property insurance shall be made available for
restoration of the Hotel. All insurance policies required in clauses (e), (f),
and (i) through (l) of Subsection 5.01.1, shall name Lessee and its Affiliates,
directors, officers, agents and employees of each such entity as named insureds,
and Manager, its Affiliates, directors, officers, agents and employees of each
such entity as additional insureds on a primary basis, irrespective of any other
coverage, whether collectable or not. Policies required in clauses (g), (h) and
(m) shall be written in the name of the employer.

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

                                       14
<PAGE>

         5.04 Insurance by Manager. Any insurance provided by Manager under this
Article V may, subject to Lessee's approval, be effected under policies of
blanket insurance which cover other properties of Manager and its Affiliates,
and Manager shall have the right to charge the Hotel with the Hotel's pro rata
share of such premiums shall be allocated to the Hotel on the same basis as
allocated to participating Other Managed Hotels. Any policies of insurance
maintained by Manager pursuant to the provisions of this Article V may contain
deductible provisions in such amounts as are maintained with respect to Other
Managed Hotels, for which Lessee shall be responsible or which Manager, at
Lessee's expense, may pay.

                                   ARTICLE VI

                                 MANAGEMENT FEE

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

                                   ARTICLE VII

                  ACCOUNTS; WORKING FUNDS; RECORDS AND REPORTS

         7.01 Hotel Accounts: Expenditures.

         (a) All funds derived from the operation of the Hotel shall belong to
and be the property of Lessee and shall be deposited daily by Manager in the
Local Operating Account. All disbursements and withdrawals from said accounts as
required or permitted under this Agreement shall be made by bonded
representatives of Manager whose signatures have been authorized. Reasonable
petty cash funds and house banks, in amounts satisfactory to Lessee, shall be
maintained at the Hotel.

         (b) All payments to be made by Manager hereunder shall be made from
authorized bank accounts, from petty cash funds or from Operating Funds provided
by Lessee pursuant to Section 7.02. All debts and liabilities which have been
validly incurred by Manager as a result of its operation and management of the
Hotel pursuant to the terms hereof, whether asserted before or after
Termination, will be paid by Lessee to the extent funds are not available for
that purpose from Gross Revenues. Manager shall not be required to make any
advance or payment to or for the account of Lessee except out of such funds, and
Manager shall not be obligated to incur any liability or obligation for Lessee's
account without assurances that necessary funds for the discharge thereof will
be provided by Lessee.

         (c) All banks accounts shall be owned by Lessee and shall be solely
controlled and operated by Manager ; the agency status of Manager shall be
designated on the checks and drafts drawn on such bank accounts.

         (d) Manager shall, on a bi-weekly basis (on a Friday, or if Friday is a
legal holiday, on

                                       15
<PAGE>

the next business day), cause all amounts in the Hotel operating accounts in
excess of the Minimum Balance (as defined below) to be wired electronically to a
bank account designated for such purposes by Lessee.

         (e) Manager shall submit to the Lessee by the fourteenth (14th)
calendar day of each Accounting Period a consolidated report for the Accounting
Period most recently ended detailing the flow of cash into and out of the Local
Operating Account, including investment income, cash deposits, credit card
deposits, payroll checks paid, operating expense checks paid, ACH drafts paid,
wires transmitted to Lessee and any other use of cash. This report must also
reconcile to the sum of the individual general ledger cash balances of the
Hotel.

         7.02 Minimum Balance. During the Term of this Agreement, Lessee shall
maintain cash in the Local Operating Account ("Operating Funds") sufficient in
amount to properly operate the Hotel. If at any time during the Term, the funds
in the Local Operating Account fall below the Minimum Balance (as defined
below), Lessee shall deposit in the Local Operating Account additional funds in
an amount equal to the difference between the funds therein and the Minimum
Balance. As used in this Agreement, "Minimum Balance" means $50,000 in cash.

         7.03 Books and Records. Manager shall keep full and adequate books of
account and such other records as are necessary to reflect the results of the
operation of the Hotel. For this purpose, Lessee agrees that it will make
available to Manager, or its representatives, all books and records pertaining
to the prior operation of the Hotel and any Major Capital Improvements. Manager
shall keep the books and records for the Hotel in all material respects in
accordance with the Uniform System of Accounts for Hotels, on an accrual basis
in accordance with generally accepted accounting principles consistently
applied.

         7.04 Reports to Lessee. Manager shall deliver, or cause to be
delivered, to Lessee the following statements:

                  (a) within fourteen (14) days after the end of each calendar
         month, a detailed profit and loss statement, substantially in the form
         used at Other Managed Hotels, showing the results of operation of the
         Hotel for such month and the year-to-date, and a statement of
         departmental operations, for such month and year-to-date, and having
         annexed thereto a computation in reasonable detail of the Management
         Fee for such preceding month and the year-to-date, calculated as
         provided in the Management Fee Rider and for the second full year of
         the Operating Period, such reports shall include a comparison with the
         prior year's results, and a balance sheet;

                  (b)      within fourteen (14) days after the end of each
                           Operating Year, an unaudited financial statement
                           consisting of a balance sheet, a related statement of
                           profit and loss and a statement of cash flows,, and
                           having annexed thereto a computation in reasonable
                           detail of the Management Fee for such year,
                           calculated as provided in the Management Fee Rider
                           and for the second full year of the Operating Period,
                           such reports shall include a comparison with the
                           prior year's results. Audited financial statements
                           shall be at Lessee's sole cost and expense.

                                       16
<PAGE>

                  (c)      Within fourteen (14) days of any demand by Lessee
                           therefore, a SAS letter, at Manager's sole cost and
                           expense.

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

         7.07 Centralized Accounting Services. Manager may, in its reasonable
discretion, handle directly, or through an Affiliate or one of the Other Managed
Hotels, any of the accounting functions for the Hotel, including without
limitation, accounts payable, general ledger, payroll and accounts receivable,
or any part thereof, on a centralized basis with one or more Other Managed
Hotels for the purpose of achieving a more cost-efficient operation of the
Hotel. Manager or its Affiliate or the Other Managed Hotel furnishing such
centralized accounting functions shall be entitled to be reimbursed or paid from
the Hotel Accounts for (i) the pro rata share of the costs and expenses of
providing such accounting functions allocated to the Hotel on the same basis as
allocated to participating Other Managed Hotels utilizing such centralized
accounting services, and (ii) such amounts required to cover or reimburse
Manager, its Affiliate or Other Managed Hotel for the payment of authorized
expenditures by such entity as a part of such centralized accounting services
and as provided on the attached Management Fee Rider.

                                  ARTICLE VIII

                               TERMINATION RIGHTS

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

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

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

                                       17
<PAGE>

                  adjudicating Manager a bankrupt or insolvent or approving a
                  petition seeking reorganization of Manager or appointing a
                  receiver, trustee or liquidator of Manager or of all or a
                  substantial part of its assets, and such order, judgment or
                  decree shall continue unstayed and in effect for any period of
                  sixty (60) consecutive days;

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

                           (d) the License Agreement is terminated due to the
                  action or inaction of Manager;

                           (e) the Hotel is sold pursuant to a Permitted
                  Transfer under Section 9.03.2(a) or (b); or

                           (f) In any Operating Year, Manager fails to both (1)
                   achieve 90% of budgeted Gross Operating Profit for the
                   Operating Year, provided, however, Manager shall have the
                   right, but not the obligation, to cure such failure by within
                   sixty (60) days following the end of such Operating Year,
                   contributing to Gross Operating Profit for such Operating
                   Year an amount necessary to cause Gross Operating Profit to
                   equal at least ninety percent (90%) of the amount of Gross
                   Operating Profit set forth in the Operating Budget for such
                   Operating Year, in which event Lessee shall have no right to
                   terminate this Management Agreement with respect to the
                   Hotel; and (2) fails to maintain a Smith Travel Research
                   RevPar Share Index of at least 110% market share for the
                   Operating Year.

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

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

                           (a) Lessee shall fail to provide funds to be
                  deposited in the Local Operating Account in accordance with
                  the provisions of Section 7.02 within ten (10) days after
                  Manager's request for such additional funds, and such failure
                  continues for an additional ten (10) day period after written
                  notice by Manager to Lessee that such funds have not yet been
                  received;

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

                           (c) [Intentionally Deleted.]

                                       18
<PAGE>

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

                           (e) if because of a default under the Ground Lease
                  (if any) or the Mortgage, the Ground Lease shall be terminated
                  or the Mortgage shall be foreclosed (or the Hotel sold in lieu
                  of foreclosure) or such steps shall be taken to terminate the
                  Ground Lease or foreclose on the Mortgage such that Manager's
                  ability to manage the Hotel shall be materially adversely
                  affected; or

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

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

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

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

         8.05 Remedies.

                           (a) If this Agreement is terminated due to an event
                  of default by

                                       19
<PAGE>

                  Lessee arising under Section 8.02 which remains uncured after
                  any applicable cure period, Manager shall be entitled to all
                  damages incurred by Manager as a result of such default,
                  including damages resulting from early termination of the
                  Agreement, including but not limited to an early termination
                  fee equal to the average monthly amount of the total
                  Management Fee, including Incentive fees paid or which would
                  have been due or owed to Manager for the Hotel during the
                  immediately preceding twelve (12) month period, multiplied by
                  the lesser of either (i) thirty six (36), provided there are
                  at least three (3) years remaining under the Term, or (ii) the
                  total number of months remaining under the Term if there is
                  less than three (3) years remaining under the Term.

                           (b) If this Agreement is terminated due to an event
                  of default by Manager arising under Section 8.01(a) and (d)
                  which remains uncured after any applicable cure period, Lessee
                  shall be entitled to all damages incurred by Lessee as a
                  result of such default, including damages resulting from early
                  termination of the Agreement, but excluding punitive
                  damages(c) Neither the right of termination nor the right to
                  sue for damages nor any other remedy available to either party
                  hereunder shall be exclusive of any other remedy given
                  hereunder or now or hereafter existing at law or in equity.

         8.06 Intentionally Deleted.

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

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

                                   ARTICLE IX

                                  TITLE MATTERS

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

                                       20
<PAGE>

         9.02 Sale or Assignment by Manager.

                  9.02.1 Prohibited Transfers. Except as provided in the
following Subsection 9.02.2, Manager shall not assign this Agreement,
voluntarily or by operation of law, without the prior written consent of Lessee.
The disposition by Manager of its controlling interest in any Affiliate to which
it has previously assigned this Agreement, shall be deemed to be a prohibited
assignment hereunder requiring the prior written consent of Lessee. Further,
Manager shall not transfer or sell its Management Company without Lessee's
consent, which shall not be unreasonably withheld. It is understood and agreed
that any consent granted by Lessee to any such assignment or other transfer
shall not be deemed a waiver of the covenant herein contained against assignment
or transfer in any subsequent case. No assignment or transfer of this Agreement
shall operate to release Manager from any of its obligations under this
Agreement.

                  9.02.2 Permitted Transfers. Manager, without the consent of
Lessee, shall have the right to assign this Agreement to any Affiliate of
Manager. Upon execution of any assignment as aforesaid under this Subsection
9.02.2, or with Lessee's consent under Subsection 9.02.1, notice thereof in the
form of a duplicate original of such assignment shall be delivered to Lessee
forthwith.

         9.03 Sale, Lease or Assignment by Lessee.

                  9.03.1 Prohibited Transfers. Except as otherwise provided
herein, Lessee (or the owner of the Hotel) agrees that, without the consent of
Manager, which shall not be unreasonably withheld, it will not sell, lease or
otherwise transfer or convey the Hotel, or any part thereof, or assign this
Agreement, except as provided in this Section 9.03; such prohibition shall
apply, without limitation, to any sale and leaseback transaction.
Notwithstanding the foregoing, Lessee may, without Manager's consent, sell or
otherwise transfer any part of the Land, or grant easements on or across the
Land, provided such conveyances do not materially and adversely affect the
operation of the Hotel.

                  9.03.2. Permitted Transfers.

                           (a) If the Term of this Agreement is not on a
                   month-to-month basis, and if Lessee (or the owner of the
                   Hotel) shall have received a bona fide written offer to
                   purchase or lease the Hotel and Lessee (or the owner of the
                   Hotel), pursuant to the terms of such offer, desires to sell
                   or lease the Hotel to any person, firm or corporation, Lessee
                   (or the owner of the Hotel) shall have the right to sell the
                   Hotel and terminate this Agreement, provided either (a)
                   Lessee pays to Manager a termination payment equal to the
                   average monthly amount of the total Management Fee, including
                   incentive fees paid or which would have been due or owed to
                   Manager for the Hotel during the immediately preceding twelve
                   (12) month period of the Term (or during the actual number of
                   months that have elapsed in the Term if such number of months
                   is less than twelve months), multiplied by the lesser of
                   either (i) Thirty Six (36), provided there are at least three
                   (3) years remaining under the Term, or (ii) the total number
                   of months remaining under the Term if there is less than
                   three 3) years remaining under the

                                       21
<PAGE>

                  Term; or (b) within sixty (60) days following termination,
                  Lessee or any Affiliate) enters into a management agreement
                  with Manager for a replacement hotel or hotels that are
                  commercially reasonably acceptable to Manager, which
                  replacement property shall be a reasonable distance from other
                  hotels that Manager manages and have budgeted annual Gross
                  Operating Revenues no less than the actual annual Gross
                  Operating Revenues of the terminated Hotel (provided that, if
                  Lessee elects to replace pursuant to this clause (b), for any
                  period in which a replacement management agreement is not yet
                  in place Lessee shall pay to Manager the fees which Manager
                  would have received for such period if the termination had not
                  occurred); or (c) Manager is engaged by the third party
                  purchaser to manage the Hotel, on terms acceptable to Manager
                  in its sole discretion, within sixty (60) days following such
                  termination.

                           (b) If the Term of this Agreement is on a
                  month-to-month basis, Lessee (or the owner of the Hotel) may
                  sell or otherwise transfer the Hotel, and terminate this
                  Agreement, upon thirty (30) days written notice to Manager.

                           (c) Notwithstanding the foregoing, Lessee (or the
                  owner of the Hotel) may sell or otherwise transfer the Hotel
                  to any Affiliate of the Lessee at any time.

                           (d) Notwithstanding the foregoing, Lessee (or the
                  owner of the Hotel) may grant a mortgage, deed of trust, or
                  other encumbrance or security interest ("Mortgage") in the
                  Hotel or any part thereof from time to time.

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

                                    ARTICLE X

                             DAMAGE OR DESTRUCTION;

                                 EMINENT DOMAIN

         10.01 Damage or Destruction. If the Hotel shall be substantially
damaged by fire or other casualty, or in the event that Mortgagee does not make
sufficient proceeds of insurance available to Lessee to permit Lessee to rebuild
and restore the Premises to a condition which permits the continued operation of
the Hotel by Manager as contemplated by this Agreement, then Lessee or Manager,
by written notice to the other party given within sixty (60) days after the
occurrence of such event, shall have the right to terminate this Agreement on
the basis that Lessee does not elect to rebuild or restore the Hotel, and
neither party shall have any further obligation to the other party hereunder,
except with respect to liability accruing, or based upon events occurring, prior
to the effective date of such termination. Notwithstanding the foregoing, if
Lessee terminates this Agreement due to fire or casualty as provided above,
Lessee shall pay to Manager a termination fee equal to the average monthly
amount of the total Management Fee, including Incentive fees paid or which would
have been due or owed to Manager for the Hotel

                                       22
<PAGE>

during the immediately preceding twelve (12) month period, multiplied by the
lesser of either (i) thirty six (36), provided there are at least three (3)
years remaining under the Term, or (ii) the total number of months remaining
under the Term if there is less than three (3) years remaining under the Term.
Manager shall not be entitled to any such termination fee in the event Manager
terminates as provided above. For the purposes hereof, the Hotel shall be deemed
to have been substantially damaged if the estimated length of time required to
restore the Hotel substantially to its condition and character just prior to the
occurrence of such casualty shall be in excess of one hundred eighty (180) days.
If this Agreement shall not terminate in the event of damage to the Hotel,
either because (i) the damage does not amount to substantial damage as described
above, or (ii) notwithstanding substantial damage to the Hotel, neither party
has elected to terminate this Agreement, Lessee shall elect to restore the
Hotel, then Lessee shall proceed with all due diligence to commence and complete
the restoration of the Hotel to its condition and character just prior to the
occurrence of such casualty, but only to the extent of insurance proceeds
available to Lessee.

         10.02 Eminent Domain. If all of the Premises, or such substantial
portion thereof as to make it infeasible, in the reasonable opinion of Lessee or
Manager, to restore and continue to operate the remaining portion for the
purposes contemplated hereby, shall be taken through the exercise, or by
agreement in lieu of the exercise, of the power of eminent domain, then
effective upon the date that Lessee shall be required to surrender possession of
the Premises, or a portion thereof, either party may terminate this Agreement
and neither party shall have any further obligation to the other party
hereunder, except with respect to liabilities accruing, or based upon events
occurring, prior to the effective date of such termination. In the event a
substantial portion of the Premises is taken, but Mortgagee fails or refuses to
make available to Lessee sufficient proceeds of such eminent domain proceedings
in order to permit Lessee to make appropriate alterations, restorations or
repairs to the remainder of the Premises, so that the Hotel would continue to be
operable for the purposes herein contemplated, then Lessee shall have the right
to terminate this Agreement upon written notice to Manager and, upon the date
that Lessee shall be required to surrender possession of the Premises to the
condemning authority, this Agreement shall terminate and neither party shall
have any further obligation to the other party hereunder, except with respect to
liabilities accruing, or based upon events occurring, prior to the effective
date of such termination. Any election to terminate this Agreement must be made
within thirty (30) days of receipt of actual written notice from the condemning
authority setting out the details of the proposed taking. If such notice does
not provide the parties with sufficient detail so that a decision may be made
regarding termination, the parties may mutually agree to extend the above time
period in their discretion. In the event this Agreement is not terminated due to
eminent domain in this section 10.02, then Lessee shall proceed with all due
diligence to repair any damage to the Hotel, or to alter or modify the Hotel so
as to render it a complete architectural unit which can be operated as a hotel
of substantially the same type and class as before, but only to the extent of
condemnation proceeds available to Lessee. Lessee and/or its Lessor shall be
solely entitled to any Award, subject only to any exceptions set out below.
Manager may seek an award from the condemning authority for its loss of business
interest only, if such separate claim is permitted. In the event the condemning
authority does award Manager for such loss, Manager shall only be entitled to
retain that portion of its condemnation award which is necessary to compensate
Manager for its lost management fees, which shall be calculated in the same
manner as termination fees for Damage by Casualty, as set out above in Section
10.01. Manager shall promptly remit any additional amount to Lessee. In the
event any jurisdiction

                                       23
<PAGE>

would permit both Manager and Lessee to seek an award for their loss of business
interests (respectively), this section shall not prohibit Lessee from making a
separate claim therefor. Lessee shall compensate Manager for its lost management
fees (calculated in the same manner as termination fees for Damage by Casualty,
as set out above in Section 10.01) only if Manager is not permitted to seek an
award directly from the condemning authority, and only to the extent of any
actual condemnation proceeds received by Lessee.

                                   ARTICLE XI

                                 REPRESENTATIONS

         11.01 Manager's Representations. The Manager covenants, represents and
warrants as follows:

         11.01.1 Qualified Lodging Facility. During the Term of this Agreement,
the Manager shall qualify as an "eligible independent contractor" as defined in
Section 856(d)(9) of the Internal Revenue Code of 1986, as amended (the "Code").
To that end, during the Term of this Agreement, the Manager:

                            (i) shall not permit wagering activities to be
                  conducted at or in connection with the Hotel;

                           (ii) shall not own, directly or indirectly (within
                  the meaning of Section 856(d)(5) of the Code), more than 35%
                  of the shares of Equity Inns, Inc.;

                           (iii) shall be actively engaged in the trade or
                  business of operating "qualified lodging facilities" (defined
                  below) for persons who are not "related persons" within the
                  meaning of Section 856(d)(9)(F) of the Code with respect to
                  Equity Inns, Inc. or the Lessee ("Unrelated Persons"). In
                  order to meet this requirement, the Manager agrees that it (i)
                  shall derive at least 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 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 (so long as the Lessee has advised the Manager in
                  writing of such regulations or other administrative guidance).

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 Equity Inns, Inc.

                                       24
<PAGE>

         11.01.2 Rents from Real Property. During the Term of this Agreement,
the Manager shall not sublet the Hotel or enter into any similar arrangement on
any basis such that the rental or other amounts to be paid by the sublessee
thereunder would be based, in whole in part, on either (i) the net income or
profits derived by the business activities of the sublessee or (ii) any other
formula such that any portion of the rent would fail to qualify as "rents from
real property" within the meaning of Section 856(d) of the Code, or any similar
or successor provision thereto.

         11.01.3 Termination for Failure of Representations. In the event that
the foregoing representations become false, Lessee shall have the rights
afforded by Section 8.01 herein, and Manager shall have the benefit of any cure
period offered therein. Notwithstanding the foregoing and/or anything in Section
8.01 or elsewhere herein to the contrary, should the REIT status of Equity Inns,
Inc. and/or Equity Inns Trust be threatened because the foregoing
representations are false, then any cure period offered in Section 8.01 shall be
reduced in part or in full to the extent necessary to avoid any termination or
other material impact on the REIT status of Equity Inns, Inc. and/or Equity Inns
Trust whereupon Lessee may summarily terminate this Agreement upon written
notice to Manager, and subject to Lessee's existing loan documents.

         11.02 Representations of Lessee. The Lessee covenants, represents and
warrants as follows:

     (a) The Lessee is the lessee of the Hotel and has full power and authority
to enter into this Agreement;

     (b) The Hotel is zoned for use as a hotel, motor hotel or resort, and all
necessary governmental and other permits and approvals for such use and for the
food and beverage (including the sale and service of liquor, if applicable)
operations of the Hotel have been obtained and are in full force and effect; and

     (c) Throughout the term of this Agreement, the Lessee will pay, keep,
observe and perform all payments, terms, covenants, conditions and obligations
under any lease or other concession, any deed of trust, mortgage or other
security agreement, and any real estate taxes or assessments covering or
affecting the Hotel, unless compliance with or payment thereof is, in good
faith, being contested and enforcement thereof is stayed.

                                   ARTICLE XII

                               GENERAL PROVISIONS

         12.01 Purchases from Manager and Manager's Affiliates. In purchasing
goods, supplies, equipment and services for the Hotel, including, without
limitation, Operating Supplies, Operating Equipment, insurance and long distance
telephone services, Manager may utilize purchasing procurement services of
affiliates of Manager and/or other group buying techniques involving Other
Managed Hotels, as well as other hotels operated by Manager and its Affiliates,
provided that the cost thereof shall be competitive with that which would be
charged by non-affiliated third party vendors in an arms-length transaction. In
such event, such affiliates and/or

                                       25
<PAGE>

Manager (as the case may be) may mark up their costs or receive and retain a fee
or other compensation from vendors and service providers for their services in
making the benefit of volume purchases available to the Hotel or negotiating and
implementing the arrangements with such vendors or providers, provided that the
total cost thereof (including such mark-up, fee or other compensation charged or
retained by Manager or its affiliates) shall be competitive as aforesaid.

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

         12.03 Indemnities.

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

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

12.03.3 Intentionally Deleted.

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

                  12.03.5 Intentionally Deleted.

                                       26
<PAGE>

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

         12.04 Arbitration of Financial Matters.

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

                           (a) computation of the Management Fee;

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

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

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

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

                  12.04.3 Procedures. In all arbitration proceedings submitted
to the Accountants, the Accountants shall be required to agree upon and approve
the substantive position advocated by Lessee or Manager with respect to each
disputed item. Any decision rendered by the Accountants that does not reflect
the position advocated by Lessee or Manager shall be beyond the scope of
authority granted to the Accountants and, consequently, may be overturned by
either

                                       27
<PAGE>

party. All proceedings by the Accountants shall be conducted in accordance with
the Uniform Arbitration Act, except to the extent the provisions of such act are
modified by this Agreement or the mutual agreement of the parties. Unless
otherwise agreed, all arbitration proceedings shall be conducted at the Hotel.

         12.05 Attorneys' Fees. In the event of any litigation arising out of
this Agreement, the prevailing party shall be entitled to reasonable costs and
expenses, including without limitation, reasonable attorneys' fees.

         12.06 Intentionally Omitted.

         12.07 No Restriction. Lessee agrees that Manager has and shall retain
the right to own, have an ownership interest in, develop, operate, manage,
license, franchise, sell or rent other hotels or inns of any kind, or shared
ownership projects commonly known as vacation ownership or time-share ownership
projects (or similar real estate projects), under the "Manager" or other name
and wherever located except on the Land under this Agreement, and nothing
contained in this Agreement shall prohibit or limit Manager from engaging in any
such activities, which shall not give rise to any liability for claims relating
to unfair competition and/or breach of the implied covenant of good faith and
fair dealing; provided that Manager shall not own, have an interest in develop,
operate, manage, license, or rent a hotel within the geographic radius of the
Competitive Set of the Hotel as listed in the Smith Travel Research Report as of
the date of this Agreement, except as is provided in the Right of First Refusal
in the Purchase and Sale Agreement for this Property or with Lessee's written
consent.

         12.08 Major Capital Improvements.

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

                   12.08.2 Development. The development of any Major Capital
Improvement shall be the responsibility of Lessee and shall be paid for out of
separate funds of Lessee.

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

         12.09 Force Majeure. If act of God, acts of war, acts of terrorism,
civil disturbance, labor strikes, governmental action, including the revocation
of any material license or permit necessary for the operation contemplated in
this Agreement where such revocation is not due to Manager's fault, or any other
causes beyond the control of Manager shall, in Manager's reasonable opinion,
have a significant adverse effect upon the operations of the Hotel, then Manager
shall be entitled to terminate this Agreement upon sixty (60) days' written
notice from

                                       28
<PAGE>

the date of such event; provided, however, such termination shall not be
effective if the event giving rise to the termination has been cured to the
reasonable satisfaction of Manager within such sixty (60) day period.

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

         If to Lessee:
                           ENN Leasing Company, Inc.
                           7700 Wolf River Boulevard
                           Germantown, TN 38138
                           Attn: Richard Mitchell
                           Phone: (901) 754-7774
                           Fax: (901) 754-2374

         If to Manager:
                           Gateway Lodging Co., Inc.
                           1401 Spring Bank Drive
                           Building A, Suite 8
                           P.O. Box 21950
                           Owensboro, KY 42303
                           Attn: Glenn Higdon
                           Phone: (270) 683-1555
                           Fax: (270) 685-0393

         Copy to:
                           John Bickel, Esq.
                           209 West Fourth
                           P.O. Box 39
                           Owensboro, KY 42302
                           Phone: (270) 926-4500
                           Fax: (270) 926-4576

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

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

                                       29
<PAGE>

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

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

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

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

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

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

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

         12.19 Partial Invalidity. Any provision of this Agreement prohibited by
law or by court decree in any locality or state shall be ineffective to the
extent of such prohibition without in any way invalidating or affecting the
remaining provisions of this Agreement, or without invalidating or affecting the
provisions of this Agreement within the states or localities where not
prohibited or otherwise invalidated by law or by court decree. Further, in the
event that any provision of this

                                       30
<PAGE>

Agreement shall be held unenforceable by virtue of its scope, but may be made
enforceable by a limitation thereof, such provision shall be deemed to be
amended to the minimum extent necessary to render it enforceable under the laws
of the jurisdiction in which enforcement is sought.

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

         12.21 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

         12.22 Subordination. This Agreement shall be subordinate to any
mortgage encumbering the Hotel, and Manager agrees to enter into a
lender-manager agreement with respect to the Hotel, which agreement shall
contain reasonable lender-manager provisions, including, without limitation,
Manager's acknowledgement that its real estate interest in and to the Hotel, if
any, created by this Agreement is subordinate to any mortgage encumbering such
Hotel, including providing any purchaser of such Hotel at a foreclosure sale or
deed-in-lieu of foreclosure (including the lender) with the right to terminate
this Agreement with respect to such Hotel; provided, however, in no event will
Manager agree to subordinate or waive its right to receive fees, reimbursements
or indemnification payments under this Agreement arising prior to termination
(but (a) if this Agreement is terminated by the lender or such purchaser with
respect to such Hotel, Manager shall not look to the lender for payment of such
fees, reimbursements or indemnification payments and Manager's right to receive
such fees, reimbursements or indemnification payments shall be subordinated to
the lender's rights and (b) if this Agreement is not terminated by the lender or
such purchaser with respect to such Hotel, then such fees, reimbursements or
indemnification payments shall be payable by the lender or such purchaser).

         12.23 Compliance with License Agreement. During the Term of this
Agreement and so long as the Hotel is licensed as a Marriott International, Inc.
("Marriott") product, the following provisions shall apply to such Hotel:

         A.       Subject to the provisions of this Agreement, Lessee and
                  Manager acknowledge and agree that the Manager shall have the
                  authority for the day-to-day management of the Hotel;

         B.       Subject to the provision by Lessee of sufficient funds to so
                  comply, the Manager will operate the Hotel during the Term of
                  this Agreement in strict compliance with the Marriott License
                  Agreement (specifically including, but not limited to,
                  Licensee's obligation to pay any and all fees, charges and
                  contributions set forth in the License Agreement) and Manager
                  shall keep the License Agreement in full force and effect
                  throughout the term of this Agreement;

         C.       Except in extraordinary circumstances, such as theft or fraud
                  on the part of the Manager or default by Lessee under the
                  License Agreement caused by the Manager for which the Lessee
                  needs to promptly remove the Manager from the

                                       31
<PAGE>

                  Hotel, this Agreement shall not be terminated by Lessee
                  without at least thirty (30) days' prior written notice to
                  Marriott;

         D.       If there are conflicts between any provision(s) of this
                  Agreement and the License Agreement, the provision(s) of the
                  License Agreement shall control; and

         E.       Manager and Lessee acknowledge that the License Agreement
                  permits Marriott to communicate directly with the Manager
                  regarding day-to-day operation of the Hotel.

         Nothing in this Agreement shall be interpreted in a manner which would
either (i) relieve Lessee of any of its obligations under the License Agreement
or (ii) prevent Lessee from validly contesting provisions of the License
Agreement.

         12.24 Closing Contingency. This Agreement will only become effective
upon the successful closing of the purchase and sale of the Hotel from an
affiliate of Manager to an affiliate of Lessee.

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

                                         LESSEE:

                                         ENN LEASING COMPANY, INC.
                                         a Tennessee corporation

                                         By /s/ Howard Silver
                                            ------------------------------------
                                                  Howard Silver
                                                  President

                                         MANAGER:

                                         Gateway Lodging Co., Inc.

                                         By: /s/ Glenn D. Higdon
                                            ------------------------------------
                                         Name: Glenn D. Higdon
                                              ----------------------------------
                                         Title: President
                                               ---------------------------------

                                       32
<PAGE>

                              MANAGEMENT FEE RIDER
                          Courtyard - Dalton, Georgia

                  A. Gross Operating Revenues. The term Gross Operating Revenues
as used in this Agreement shall mean all receipts, revenues, income and proceeds
of sales of every kind received by Manager directly or indirectly from the
operation of the Hotel. Gross Operating Revenues shall exclude all sales and
excise taxes and any similar taxes collected as direct taxes payable to taxing
authorities; gratuities or service charges collected for payment to and paid to
employees; credit or refunds to guests; proceeds of insurance, save and except
for proceeds of insurance with respect to use and occupancy or business
interruption insurance; proceeds of sales of real estate and/or furniture,
fixtures and equipment; proceeds of refinancings; and proceeds of condemnation.

                   B. Net Operating Income. The term "Net Operating Income" as
used in this agreement shall mean the excess, during each Calendar Year (and
proportionally for any period less than a Calendar Year), of Gross Operating
Revenues over expenses and deductions incurred in the operation of the Hotel by
Manager in fulfilling its duties hereunder during such period determined in
accordance with the accounting system established by the Uniform System (except
as modified by this Agreement). In arriving at Net Operating Income, all
expenses shall be proper deductions from Gross Operating Revenues insofar as
they relate to the operation of the Hotel, including, without limit, all Base
Management Fees, license fees, franchisor royalties, real estate and special
assessment taxes, property and liability insurance, a reserve of four percent
(4%) of Gross Operating Revenue for capital improvements (whether or not such
reserve is held in escrow) and fees and direct out-of-pocket charges of Manager
or its affiliates as well as corporate charges (as described below).

In accordance with Manager's past practices, out-of-pocket costs and corporate
charges may include, but are not limited to travel costs for corporate staff
traveling specifically on behalf of or for the benefit of the Hotel;

                  C. Base Management Fee.  During each Calendar Year after the
Management Commencement Date (and for a fraction of any partial Calendar Year),
in consideration of the services Manager is to render under this Agreement,
Manager will be paid a fee ("Base Management Fee") at the rate of three percent
(3.0%) of Gross Operating Revenues of the Hotel per Calendar Year:

         The Base Management Fee will be paid in installments by deducting such
fee from Gross Operating Revenues of the Hotel immediately following each
Accounting Period at the rate of the corresponding percentage of Gross Operating
Revenues for that Accounting Period. At the end of each Accounting Period, an
adjustment will be made on a cumulative year-to-date basis, if necessary, and
all sums due either the Manager or Lessee shall be paid immediately.

                  E. Incentive Fees. In addition to the Base Management Fee,
during each Calendar Year after the Management Commencement Date (and for any
partial Calendar Year) in which Manager is to render services under this
Agreement, Manager

<PAGE>

will be paid an incentive fee as based on the consolidated Net Operating Income
of the Hotel Group as follows:

                  For any Calendar Year in which the Net Operating Income of the
                  Hotel, or for any partial Calendar Year in which the Net
                  Operating Income on a prorated basis, is greater or equal to
                  $635,000 (Target NOI), Manager shall be paid an Incentive Fee
                  equal to 1% of Gross Operating Revenues.

                  G. The Incentive Fee will be payable to Manager from Gross
Operating Revenues of the Hotel Group on a quarterly basis with a final
reconciliation following the end of each Calendar Year. The Manager will submit
to the Lessee the calculation of the Incentive Fee quarterly along with the
delivery of the financial statements pursuant to Section 7.04 of the Management
Agreement, after which the Lessee shall have ten (10) calendar days to advise
the Manager of any disagreement with such calculation quarterly and annually.
Following the Calendar Year-end audit conducted by Lessee or Lessee's
representatives, an adjustment will be made if necessary, and all sums due
either Manager or Lessee shall be paid immediately.

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