EQUITY INNS INC
MATERIAL CONTRACTS
<DOCUMENT>
<TYPE>EX-10.7
<SEQUENCE>7
<FILENAME>0007.txt
<DESCRIPTION>MATERIAL CONTRACTS
<TEXT>





                                                                    EXHIBIT 10.7












                              MANAGEMENT AGREEMENT

                                     between



                          ENN LEASING COMPANY I, L.L.C.
                                    ("Owner")


                                       and


                        CRESTLINE HOTELS & RESORTS, INC.
                             ("Management Company")



















<PAGE>














                                TABLE OF CONTENTS




                                                                            Page

ARTICLE I - APPOINTMENT OF MANAGEMENT COMPANY

         1.01  Appointment.....................................................1
         1.02  Delegation of Authority.........................................1
         1.03  No Covenants or Restrictions....................................2
         1.04  Representations of Management Company...........................2

ARTICLE II - DEFINITION OF TERMS...............................................2

ARTICLE III - THE HOTEL

         3.01  Ownership.......................................................9
         3.02  Subordination of Management Agreement..........................10
         3.03  Non-Disturbance Agreement......................................10

ARTICLE IV - PRE-OPENING/TAKEOVER EXPENSES....................................11

ARTICLE V - TERM..............................................................10

         5.01  Term...........................................................12
         5.02  Actions to be Taken upon Termination...........................12

ARTICLE VI - COMPENSATION OF MANAGEMENT COMPANY

         6.01  Management Fees................................................14

         6.02  Accounting and Interim Payment.................................14

         6.03  Reimbursements to Management Company...........................15

ARTICLE VII - WORKING CAPITAL AND FIXED ASSET SUPPLIES








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         7.01  Working Capital and Inventories................................15

         7.02  Fixed Asset Supplies...........................................15



ARTICLE VIII - MAINTENANCE, REPLACEMENT AND CHANGES

         8.01  Routine Repairs and Maintenance................................16

         8.02  [Intentionally Deleted]........................................16

         8.03  Building Alterations, Improvements, Renewals and
         Replacements.........................................................16

         8.04  Liens..........................................................16

         8.05  Ownership of Replacements......................................17


ARTICLE IX - BOOKKEEPING AND BANK ACCOUNTS

         9.01  Books and Records..............................................17

         9.02  Hotel Accounts:  Expenditures..................................17

         9.03  Annual Operating Projection....................................18

         9.04  Operating Deficits, Credit.....................................20

         9.05  Reduction of Working Capital...................................20


ARTICLE X -LICENSE AGREEMENT..................................................20


ARTICLE XI - POSSESSION AND USE OF HOTEL

         11.01  Use...........................................................20







<PAGE>




         11.02  Owner's Right to Inspect......................................21

         11.03  Group Services................................................21


ARTICLE XII - INSURANCE

         12.01  Property and Operational Insurance............................22

         12.02  General Insurance Provisions..................................24

         12.03  Coverage......................................................24

         12.04  Cost and Expense..............................................24

         12.05  Policies and Endorsements.....................................24

         12.06  Indemnification...............................................25


ARTICLE XIII - REAL ESTATE AND PROPERTY TAXES

         13.01  Impositions...................................................26

         13.02  Owner's Responsibility........................................27


ARTICLE XIV - HOTEL EMPLOYEES

         14.01  Employees.....................................................27

         14.02  Termination...................................................28

         14.03  Employee Claims...............................................29


ARTICLE XV - DAMAGE AND CONDEMNATION

         15.01  Damage and Repair.............................................29

         15.02  Condemnation..................................................30






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ARTICLE XVI - DEFAULTS

         16.01  Default.......................................................30

         16.02  Event of Default..............................................31

         16.03  Remedies upon Event of Default................................32


ARTICLE XVII - PROPRIETARY MARKS; INTELLECTUAL PROPERTY

         17.01  Proprietary Marks.............................................32

         17.02  Computer Software and Equipment...............................33

         17.03  Intellectual Property.........................................33


ARTICLE XVIII - WAIVER AND INVALIDITY

         18.01  Waiver........................................................33

         18.02  Partial Invalidity............................................34


ARTICLE XIX - ASSIGNMENT......................................................30


         19.01  Assignment by Management Company and Owner....................34


ARTICLE XX - TERMINATION OF AGREEMENT

         20.01  Sale of the Hotel - Assumption of Management Agreement........35







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         20.02  Sale of the Hotel - Termination of Management Agreement.......36

         20.03  Termination without Cause.....................................36

         20.04  Termination upon Demolition or Foreclosure....................37

         20.05  Performance Termination.......................................37


ARTICLE XXI - MANAGEMENT COMPANY CONDITIONS

         21.01  Conditions upon Management Company's Obligations..............37


ARTICLE XXII - MISCELLANEOUS

         22.01  Right to Make Agreement.......................................38

         22.02  Agency........................................................38

         22.03  Failure to Perform............................................38

         22.04  Breach of Covenant............................................39

         22.05  Consents......................................................39

         22.06  Applicable Law................................................39

         22.07  Headings......................................................39

         22.08  Notices.......................................................39

         22.09  Environmental Matters.........................................40

         22.10  Equity and Debt Offerings.....................................41







<PAGE>




         22.11  Estoppel Certificates.........................................41

         22.12  Counterparts..................................................42

         22.13  Entire Agreement..............................................42



         Exhibit A - Legal Description of Hotel Site







<PAGE>




                              MANAGEMENT AGREEMENT


                  This Management Agreement (this "Agreement") is made effective
as of January 1, 2001  ("Effective  Date") by and between ENN Leasing Company I,
L.L.C,  a  Delaware  limited  liability  company,  with its  principal  place of
business at 7700 Wolf River  Boulevard,  Germantown,  Tennessee 38138 ("Owner"),
and Crestline Hotels & Resorts, Inc., a Delaware corporation, with its principal
place of business at 6600 Rockledge Drive, 6th Floor,  Bethesda,  Maryland 20817
("Management Company").

                                                    WITNESSETH:

                  WHEREAS,  Owner owns leasehold  title of the _______ Inn hotel
at  ______________________________  ("Hotel")  which is located on that  certain
real property as described on Exhibit A attached  hereto and made a part hereof;
and

                  WHEREAS,  Owner desires to have Management  Company manage and
operate the Hotel from and after the Effective  Date, and Management  Company is
willing  to  perform  such  services  for the  account of Owner on the terms and
conditions set forth in this Agreement;

                  NOW,  THEREFORE,  in  consideration  of the  premises  and the
mutual covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which is hereby  acknowledged by each of the parties,
the parties hereto agree as follows:


                                    ARTICLE I
                        APPOINTMENT OF MANAGEMENT COMPANY
1.01     Appointment
         Owner  hereby  appoints  and  employs  Management  Company  as  Owner's
exclusive agent to supervise, direct and control management and operation of the
Hotel for the term  provided  in  Article V.  Management  Company  accepts  said
appointment  and agrees to manage the Hotel during the term of this Agreement in
accordance with the terms and conditions  hereinafter set forth. The performance
of all activities by Management  Company,  including the maintenance of all bank
accounts, shall be as the agent of and for the account of Owner.







<PAGE>




1.02     Delegation of Authority

         Except as otherwise specifically provided in this Agreement,  the Hotel
shall be operated  under the  exclusive  supervision  and control of  Management
Company which shall be responsible for the proper and efficient operation of the
Hotel. Except as otherwise  specifically provided in this Agreement,  Management
Company shall have discretion and control, free from interference,  interruption
or disturbance,  in all matters  relating to the management and operation of the
Hotel,  including,  without limitation,  charges for rooms and commercial space,
credit policies, food and beverage services,  granting of concessions or leasing
of shops and agencies  within the Hotel  (provided that no such lease term shall
extend beyond the term hereof without Owner's  approval),  receipt,  holding and
disbursement of funds, maintenance of bank accounts (including Working Capital),
procurement of inventories,  supplies and services, promotion and publicity and,
generally, all activities necessary for the operation of the Hotel.

1.03     No Covenants or Restrictions

     Owner  warrants  that there will be on the  Effective  Date no covenants or
restrictions which would prohibit or limit Management Company from operating the
Hotel, including cocktail lounges,  restaurants and other facilities customarily
a part of or related to a Holiday Inn hotel facility.  Owner agrees upon request
by  Management  Company to sign  promptly and without  charge  applications  for
licenses, permits or other instruments reasonably necessary for operation of the
Hotel.

1.04     Representations of Management Company

     Management  Company  represents  that it is experienced  and capable in the
planning,  decorating,   furnishing,   equipping,  promoting,   management,  and
operation of first-class  hotels, and Management Company covenants and agrees to
manage and  operate  the Hotel as a Holiday  Inn hotel in  accordance  with that
certain  License  Agreement  dated  as  of  January  1,  2001,  between  Holiday
Hospitality Franchising,  Inc./Bass Hotels & Resorts, Inc. as the "Licensor" and
Owner, as the "Licensee" (as such agreement may have been or may be amended, the
"License Agreement"), respecting the Hotel.


                                   ARTICLE II
                               DEFINITION OF TERMS

     The  following  terms when used in this  Agreement  shall have the meanings
indicated:

         A.  Accounting Period means a calendar month.






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         B.  [Intentionally Deleted]

         C.  Affiliate  means any  individual or entity,  directly or indirectly
through one or more intermediaries,  controlling, controlled by, or under common
control with a party.  The term "control," as used in the immediately  preceding
sentence, means, with respect to a corporation,  the right to exercise, directly
or indirectly,  fifty percent (50%) or more of the voting rights attributable to
the shares of the controlled corporation, and, with respect to an entity that is
not a  corporation,  the  possession,  directly or  indirectly,  of the power to
direct or cause the direction of the  management  or policies of the  controlled
entity.

         D.  Annual Operating Projection shall have the meaning set forth in
Section 9.03.

         E.  Annual Operating Statement shall have the meaning set forth in
Section 9.01.

         F.  Base Management Fee shall have the meaning set forth in Section
6.01 A.

         G.  Building Estimate shall have the meaning set forth in Section
8.03 A.

         H.  Capitalization Multiple means the number ten (10).

         I.  Coverage Ratio means the number one and three-tenths (1.3).

         J.  Deductions shall have the meaning set forth in Article II JJ.

         K.  Default shall have the meaning set forth in Section 16.01.

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

         M.  Employee Claims  means any and all  claims  (including  all  fines,
judgments,  penalties, costs, litigation and/or arbitration expenses, attorneys'
fees and expenses,  and costs of  settlement  with respect to any such claim) by
any employee or employees of  Management  Company  against  Owner or  Management
Company  with  respect  to the  employment  at the  Hotel  of such  employee  or
employees.  "Employee Claims" shall include, without limitation,  the following:
(i) claims which are  eventually  resolved by  arbitration,  by litigation or by
settlement;  (ii) claims  which also  involve  allegations  that any  applicable
employment-related  contracts  affecting  the  employees  at the Hotel have been
breached;  and (iii) claims which involve  allegations that one or more state or
federal employment laws have been violated.

         N.  Event of Default shall have the meaning set forth in Section 16.02.






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         O.  Executive Employees shall have the meaning set forth in Section
14.02.

         P.  [Intentionally Deleted]

         Q.  [Intentionally Deleted]

         R. Fiscal Year means Management Company's Fiscal Year, which now begins
at 12:01 a.m.  on January 1 and ends at  midnight  on  December  31. The partial
Fiscal Year between the end of the last full Fiscal Year and the  Termination of
this  Agreement  shall,  for purposes of this  Agreement,  constitute a separate
Fiscal  Year.  If  Management  Company's  Fiscal  Year is changed in the future,
appropriate  adjustment to this Agreement's  reporting and accounting procedure,
shall be made with Owner's approval,  which shall not be unreasonably  withheld;
provided,  however,  that no such change or  adjustment  shall alter the term of
this  Agreement or in any way reduce the  distributions  of Operating  Profit or
other payments due Owner or alter and/or modify the rights of Owner hereunder.

         S. Fixed Asset Supplies means supply items included within Property and
Equipment  under  the  Uniform  System  of  Accounts,  including  linen,  china,
glassware, silver, uniforms and similar items. The value of Fixed Asset Supplies
shall be included in the calculation of Working Capital.

         T. Gross Revenues means all revenues and receipts of every kind derived
from  operating  the Hotel and parts  thereof,  including,  but not  limited to:
income  (from  both  cash  and  credit  transactions),  before  commissions  and
discounts for prompt or cash payments,  from rental of rooms,  stores,  offices,
meeting,  exhibit or sales space of every kind;  license,  lease and  concession
fees and  rentals  (not  including  gross  receipts  of  licensees,  lessees and
concessionaires  from their  operations);  income from vending machines;  health
club membership  fees;  food and beverage  sales;  wholesale and retail sales of
merchandise;  service charges, and proceeds,  if any, from business interruption
or other  loss of  income  insurance.  Gross  Revenues  shall  not  include  (i)
gratuities,  including  tips,  paid to Hotel  employees by third  parties;  (ii)
federal,   state,  and  municipal  excise,  sales,  and  use  taxes  or  similar
impositions collected directly from patrons or guests or included as part of the
sales price of any rooms,  goods, or services;  (iii) the proceeds realized from
the sale of fixtures,  furniture,  furnishings and equipment no longer necessary
to the  operation  of the  Hotel;  (iv)  proceeds  of any  insurance  other than
business  interruption  insurance (or other insurance against loss of income) of
the type  described in Section  12.01 A3; (v)  condemnation  awards;  (vi) gross
receipts received by lessees,  licensees, or concessionaires of the Hotel; (vii)
proceeds from any financing or refinancing;  and (viii) proceeds of any judgment
or settlement not received as compensation for actual or potential loss of Gross
Revenues or Operating Profit.






<PAGE>



         U.  Group Services shall have the meaning set forth in Section 11.03.

         V.  Hotel means the Holiday Inn at Charleston-Mt. Pleasant, South
Carolina.

         W.  Impositions shall have the meaning set forth in Section 13.01.

         X.  Incentive Fee shall have the meaning set forth in Section 6.01 B.

         Y.  Initial Term shall have the meaning set forth in Article V.

         Z.  Intellectual Property shall have the meaning set forth in Section
17.03.

         AA.  Inventories  means Inventories as defined in the Uniform System of
Accounts,  such  as  provisions  in  storerooms,   refrigerators,  pantries  and
kitchens;  beverages in wine cellars and bars;  other  merchandise  intended for
sale; fuel; mechanical supplies;  stationery;  and other expenses,  supplies and
similar items.

         BB. [Intentionally Deleted]

         CC. License Agreement shall have the meaning set forth in Section 1.04.

         DD. Licensee shall have the meaning set forth in Section 1.04.

         EE. Licensor shall have the meaning set forth in Section 1.04.

         FF. Management Company means Crestline Hotels & Resorts, Inc., a
Delaware corporation.

         GG.  Mortgage means any security  instrument  which encumbers the Hotel
and/or the Hotel premises,  including,  without limitation,  mortgages, deeds of
trust, security deeds and similar instruments.

         HH. Non-Disturbance Agreement means an agreement, in recordable form in
the  jurisdiction  in which the Hotel is located,  executed  and  delivered by a
holder of a Secured Loan (which agreement shall by its terms by binding upon all
assignees of such holder and upon any  individual or entity that acquires  title
to or  possession  of the Hotel at or through a  foreclosure  (referred  to as a
"Subsequent Owner")), for the benefit of Management Company,  pursuant to which,
in the event such holder (or its  assignee) or any  Subsequent  Owner comes into
possession  of  or  acquires  title  to  the  Hotel  either  at or  following  a
foreclosure, such holder (and its assignees) and all Subsequent Owners shall (x)
recognize  Management  Company's rights under this Agreement,  and (y) shall not
name Management Company as a party in any foreclosure action or proceeding,  and
(z) shall





<PAGE>



not  disturb  Management  Company in its right to  continue  to manage the Hotel
pursuant  to this  Agreement;  provided,  however,  that at such time,  (i) this
Agreement  has not expired or otherwise  been earlier  terminated  in accordance
with its  terms,  and  (ii)  there  are no  outstanding  Events  of  Default  by
Management  Company,  and (iii) no material  event has  occurred and no material
condition  exists  which,  after  notice or the  passage of time or both,  would
entitle  Owner  to  terminate  this  Agreement  (excluding  events  which  would
constitute an Event of Default,  which are to be governed  exclusively by clause
(ii) hereof).

         II. Operating Loss means a negative Operating Profit.

         JJ. Operating Profit means the excess of Gross Revenues over the
following deductions ("Deductions") incurred by Management Company in operating
the Hotel:

                  1.    Cost of sales, salaries, wages, fringe benefits, payroll
taxes and other cash payroll costs related to Hotel employees;

                  2.    Departmental expenses, administrative and general
expenses and the cost of Hotel advertising and business promotion, heat, light
and power, and routine repairs, maintenance and minor alterations treated as
Deductions under Section 8.01;

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

                  4.  A reasonable reserve for uncollectible accounts receivable
as determined by Management Company and approved by Owner;

                  5. All costs and fees of  independent  professionals  or other
third parties who perform services required or permitted hereunder if and to the
extent the cost and expense is not  capitalized  in  accordance  with  generally
accepted  accounting  principles,  including without  limitation,  third parties
providing  legal  services to  Management  Company in  connection  with  matters
involving the Hotel  (excluding  matters in dispute between Owner and Management
Company),  which services shall be charged at rates which approximate Management
Company's Affiliates' costs associated with such personnel;

                  6.       The cost and expense of technical consultants and
operational experts for specialized services in connection with non-routine
Hotel work, as set forth in the Annual Operating Projection;

                  7.       Management Company's Base Management Fee (referred to
in Section 6.01) of two and one-half percent (2.5%) of Gross Revenues for
services rendered in connection with the operation of the Hotel;






<PAGE>



                  8. All the costs and expenses  incurred by Management  Company
pursuant to the License Agreement including, but not limited to, franchise fees,
advertising,  chain services,  insurance,  etc.; provided,  however, any initial
licensing fees or capital expenditures necessary for compliance with the License
Agreement  shall not be a  Deduction  from Gross  Revenues  for  purposes of the
calculation of Operating Profit;

                  9.  [Intentionally Deleted]

                  10.  Insurance costs and expenses as described in Article XII;

                  11. Taxes, if any, payable by or assessed  against  Management
Company  related to this Agreement or to Management  Company's  operation of the
Hotel  (exclusive  of Management  Company's  income taxes) and real and personal
property taxes assessed against the Hotel along with related  expenses  incurred
in connection with all such assessments, unless such taxes are paid by Owner;

                  12.  All costs and  expenses  to obtain and keep in full force
and effect any licenses and permits  required for the operation of the Hotel and
related facilities,  including without limitation,  liquor licenses for the sale
of alcoholic beverages at all restaurants, bars, lounges, banquet rooms, meeting
rooms and guest rooms at the Hotel; and

                  13.  Such other  costs and  expenses  incurred  by  Management
Company as are specifically provided for elsewhere in this Agreement (including,
without  limitation,   Group  Services  and  certain  reimbursable  expenses  of
Management Company's corporate staff described in Section 6.03) or are otherwise
reasonably  necessary for the proper and efficient operation of the Hotel unless
any such costs and expenses are  specifically  stated not to be Deductions under
any provision of this Agreement.

         The term  "Deductions"  shall not  include  (i) debt  service  payments
pursuant  to any Secured  Loan,  nor (ii) ground  lease  rental or other  rental
payments  pursuant to any ground lease in connection  with the Hotel,  nor (iii)
any  expenditures  by Owner in the  acquisition or conversion of the Hotel;  nor
(iv)  rental  payments  pursuant to any capital  leases  approved by  Management
Company;  nor (v) the cost of external (third party) audits of Hotel  operations
and/or  with  respect to the Owner  entity  itself;  nor (vi) other  recurring &
non-recurring ownership costs, such as Owner's entity administration & servicing
costs;  all of which  shall be paid by Owner  from its own  funds,  and not from
Gross Revenues.

     KK.          Owner means ENN Leasing Company I, L.L.C., a Delaware limited
liability company.

         LL.      Owner-Funded Capital Expenditures shall have the meaning set
forth in Section 8.03.





<PAGE>




         MM.      [Intentionally Deleted]

         NN.      [Intentionally Deleted]

     OO. Prime Rate means the "prime  rate" as  published  in the "Money  Rates"
section of The Wall Street Journal; however, if such rate is, at any time during
the term of this Agreement, no longer so published,  the term "Prime Rate" shall
mean the average of the prime interest  rates which are announced,  from time to
time,  by the three (3) largest  banks (by assets)  headquartered  in the United
States which publish a "prime rate."

         PP.      Proprietary Marks shall have the meaning set forth in Section
17.01.

         QQ.      Prospectus shall have the meaning set forth in Section 22.10.

     RR. Qualified Lender means any recognized third party institutional  lender
such as any  federally  insured  commercial or savings  bank,  national  banking
association,  savings and loan association,  investment banking firm, commercial
finance  company and other  similar  lending  institution  that is a holder of a
Secured Loan that is a Qualified Loan.

         SS.  Qualified  Loan  means  any  Secured  Loan in  which  the  initial
principal  amount,  as of the date such Secured Loan is incurred,  when added to
the current  principal balance of all existing Secured Loans as of that date, is
less than or equal to the greater of the following:

         (i)   Seventy percent (70%) of Owner's Investment; or

         (ii)  The result obtained by (a) dividing the Operating  Profit for the
               twelve  (12)  most  recent  full  Accounting  Periods  by  the
               Coverage Ratio; then, (b) multiplying the result of clause (a)
               by the Capitalization Multiple; or

         (iii) The existing  balance of any Secured Loans encumbering  the Hotel
               immediately  prior  to the  date  of the  incurrence  of  such
               Qualified Loan, plus commercially reasonable transaction costs
               (defined  as  all  normal  transaction  costs  to  the  extent
               actually  incurred)  associated with such refinancing up to an
               amount equal to four percent (4%) of the  principal  amount of
               such Qualified Loan.

         In addition,  regardless  of whether or not the above test set forth in
clauses (i), (ii) and (iii) are satisfied, (a) the existing (as of the Effective
Date) balance of any Secured Loan which is secured by a Mortgage  existing as of
the Effective Date shall be deemed to be a "Qualified Loan"; and (b) any Secured
Loan which Management  Company,  in its reasonable  discretion,  has approved in
writing shall be deemed to be a "Qualified  Loan"  (provided that an approval by
Management  Company that a given  Secured Loan shall be deemed to be a Qualified
Loan hereunder shall only apply to the specific hotel or hotels





<PAGE>



which are described in such approval,  and shall not be deemed to be an approval
with  respect to other  hotels,  regardless  of whether such Secured Loan by its
terms permits the  substitution or addition of such other hotels as security for
such Secured Loan).

         TT.  [Intentionally Deleted]

         UU.  Sale of the Hotel  means any sale,  assignment,  transfer or other
disposition, for value or otherwise,  voluntary or involuntary, of Owner's title
to the Hotel or the site  (either fee or leasehold  title,  as the case may be),
but shall not include a collateral assignment intended to provide security for a
loan. For purposes of this Agreement, a "Sale of the Hotel" shall also include a
lease (or sublease) of the entire Hotel or site.  The phrase "Sale of the Hotel"
shall  also  include  any sale,  transfer,  or other  disposition,  for value or
otherwise,  in a single transaction or a series of related transactions,  of the
controlling  interest in the Owner.  If the Owner is a  corporation,  the phrase
"controlling interest" shall mean the right to exercise, directly or indirectly,
fifty percent (50%) or more of the voting rights  attributable  to the shares of
Owner  (through  ownership  of such  shares or by  contract).  If Owner is not a
corporation,  the  phrase  "controlling  interest'  shall  mean the  possession,
directly or  indirectly,  of the power to direct or cause the  direction  of the
management or policies of Owner.  Notwithstanding the foregoing,  the term "Sale
of the  Hotel"  shall  not  include  any  sale,  assignment,  transfer  or other
disposition of the Hotel or the site by Owner to an Affiliate of Owner.

         VV. Secured Loan means and includes (i) any  indebtedness  secured by a
Mortgage  encumbering the Hotel or all or any part of Owner's interest  therein;
and (ii) all amendments,  modifications,  supplements and extensions of any such
Mortgage.

         WW.      Software shall have the meaning set forth in Section 17.02.

         XX.      Termination means the expiration or sooner cessation of this
Agreement.

         YY.     Uniform System of Accounts means the Uniform System of Accounts
for Hotels, Ninth Revised Edition, 1996, as revised and adopted by the Hotel
Association of New York City, Inc. from time to time and as modified by
applicable provisions of this Agreement.

         ZZ. Working Capital means funds which are reasonably  necessary for the
day-to- day operation of the Hotel's business,  including,  without  limitation,
amounts sufficient for the maintenance of change and petty cash funds, operating
bank accounts,  receivables,  payrolls,  prepaid  expenses and funds required to
maintain Inventories and Fixed Asset Supplies, less accounts payable and accrued
current liabilities.






<PAGE>


                                  ARTICLE III

                                    THE HOTEL

3.01     Ownership

         During the term of this  Agreement,  Owner shall take such action as is
appropriate  to  assure  that  Owner has good and  marketable  title to the land
described in Exhibit A and all improvements thereon, free and clear of all liens
and encumbrances other than:

         (i)    Easementsor other encumbrances  that  do  not  adversely  affect
                the operation of  the  Hotel by  Management  Company  and do not
                require  the  payment of any money,  other than  payment  from
                Owner's funds;

         (ii)   Mortgages which are given to secure any one or more Qualified
                Loans;

         (iii)  Liens for taxes, assessments, levies or other public charges
                which are not yet due or are being contested in good faith; and

         (iv)   Amendments or modifications to the ground lease, if any,
                existing as of the Effective Date to which Management Company
                consents (which consent shall not be unreasonably withheld,
                provided that (i) the proposed  amendment or modification  would
                not materially adversely affect the rights and/or obligations of
                Management Company, and (ii) in any event, such amendment or
                modification would have no  adverse  impact on the amount of the
                fees to be paid to Management Company under this Agreement).

3.02.    Subordination of Management Agreement

         Excluding  Management  Company's  right to receive  payment of the Base
Management  Fee, this Agreement and all of the rights and benefits of Management
Company  hereunder  are, and shall be subject and  subordinate  to any Qualified
Loan(s) which now or hereafter encumber the Hotel. This subordination  provision
shall be self-  operative and no other or further  instrument  of  subordination
shall be  required;  Management  Company  agrees,  however,  upon request of any
Qualified  Lender,  duly to execute  and  deliver  any  subordination  agreement
requested by such  Qualified  Lender to evidence  and confirm the  subordination
effected  under this Section 3.02,  provided that such  agreement also reaffirms
the Qualified Lender's obligations to Management Company under this Agreement.

3.03     Non-Disturbance Agreement

         Notwithstanding Section 3.02, Owner agrees that, prior to obtaining any
Qualified  Loan,  it will use its best  efforts to obtain from each  prospective
holder or holders thereof





<PAGE>



a Non-Disturbance  Agreement pursuant to which Management Company's rights under
this Agreement will not be disturbed as a result of a loan default stemming from
non- monetary  factors which (i) relate to Owner and do not relate solely to the
Hotel, and (ii) are not Defaults by Management Company under Article XVI of this
Agreement.  If Owner desires to obtain a Qualified Loan,  Management Company, on
written  request from Owner,  shall promptly  identify  those  provisions in the
proposed loan documents  which fall within the  categories  described in clauses
(i) and (ii) above, and Management  Company shall otherwise assist in expediting
the preparation of an agreement  between the  prospective  holder and Management
Company which will implement the provisions of this Section 3.03.

                                   ARTICLE IV
                          PRE-OPENING/TAKEOVER EXPENSES

         Owner shall  provide  all funds to pay any  amounts or, as  applicable,
reimburse any deficiencies arising in connection with the following  pre-opening
or takeover  expenses  in  accordance  with a  pre-opening  or  takeover  budget
prepared by Management Company prior to the Effective Date:

         (i)    payment of any application and/or other fees and expenses due in
connection with obtaining the franchise;

         (ii) payment of all expenses  (including,  without limitation,  any and
all legal  expenses)  related to or arising in  connection  with  obtaining  the
permits  and/or  licenses  necessary  for  the  operation  of the  Hotel  or any
facilities located therein, including, without limitation, any liquor licenses;

         (iii)         payment of expenses for operating equipment and operating
supplies which may be required as of the Effective Date;

         (iv)     any projected "startup losses" associated with the transfer of
operations of the Hotel; and

         (v)      any other expenses incurred by Owner or Management Company, as
the case may be, in connection with the transfer of operations of the Hotel.

         Owner  shall  advance  to  Management  Company  all funds  required  by
Management  Company for such pre-opening or takeover expenses in the amounts and
on the dates as may be specified by Management  Company in a "Request for Funds"
to be submitted by Management  Company to Owner.  Such amounts shall be provided
by Owner within  fifteen (15) days of Owner's  receipt of  Management  Company's
Request for Funds.  If following the Effective  Date,  funds for  pre-opening or
takeover expenses are owing to Management Company, Management Company shall have
the option to deduct such amounts from





<PAGE>



Owner's  share of Operating  Profit.  It is  understood,  that to the extent any
delay or  postponement  of the Effective  Date causes  increased  pre-opening or
takeover expenses that cannot be reasonably avoided,  Owner shall be responsible
for and promptly pay such increased  pre-opening or takeover  expenses.  No item
which is or should have been included as a pre-opening or takeover expense shall
be charged as a Deduction.


                                    ARTICLE V
                                      TERM

5.01     Term

         The initial term ("Initial  Term") of this Agreement  shall commence on
the Effective Date, and, unless sooner terminated as provided in this Agreement,
shall  continue  for a  period  ending  on  December  31,  2002.  Following  the
expiration of the Initial Term, this Agreement  shall,  upon the written consent
of both  Owner and  Management  Company at least  ninety  (90) days prior to the
expiration  of the Initial  Term,  continue in force and be extended for one (1)
successive five (5)-year term ("First  Renewal Term").  Following the expiration
of the First Renewal Term,  this Agreement  shall,  upon the written  consent of
both  Owner and  Management  Company  at least  ninety  (90)  days  prior to the
expiration  of the Initial  Term,  continue in force and be extended for one (1)
additional successive five (5)-year term.

5.02     Actions to be Taken upon Termination

         Upon  a  Termination  of  this   Agreement,   the  following  shall  be
applicable:

         A. Management Company shall,  within thirty (30) days after Termination
of this  Agreement,  prepare and deliver to Owner a final  accounting  statement
with respect to the Hotel, as more particularly described in Section 9.01, along
with a  statement  of any sums due from  Owner to  Management  Company  pursuant
hereto,  dated as of the date of Termination.  Within thirty (30) days after the
receipt by Owner of such  final  accounting  statement,  the  parties  will make
whatever cash adjustments are necessary  pursuant to such final  statement.  The
cost of preparing such final accounting  statement shall be a Deduction,  unless
the  Termination  occurs as a result of an Event of Default by either party,  in
which case the  defaulting  party  shall pay such cost.  Management  Company and
Owner acknowledge that there may be certain  adjustments for which the necessary
information will not be available at the time of such final accounting,  and the
parties agree to readjust such amounts and make the necessary  cash  adjustments
when such information becomes available;  provided,  however, that (unless there
are ongoing disputes of which each party has received notice) all accounts shall
be deemed final as of one hundred eighty (180) days after such Termination.





<PAGE>



         B. As of the date of the final  accounting  referred to in subsection A
above,  Management  Company  shall  release and transfer to Owner any of Owner's
funds which are held or  controlled  by  Management  Company with respect to the
Hotel,  with the  exception  of funds to be held in escrow  pursuant  to Section
12.04 B and Section 14.02. During the period between the date of Termination and
the date of such final  accounting,  Management  Company  shall pay (or  reserve
against) all  Deductions  which accrued (but were not paid) prior to the date of
Termination,  using for such purpose any Gross  Revenues  which accrued prior to
the date of Termination.

         C.  Management  Company  shall make  available  to Owner such books and
records  respecting  the Hotel  (including  those from prior  years,  subject to
Management Company's reasonable records retention policies) as will be needed by
Owner to prepare  the  accounting  statements,  in  accordance  with the Uniform
System of Accounts,  for the Hotel for the year in which the Termination  occurs
and for any  subsequent  year.  Such books and records  shall not  include:  (i)
employee records which must remain  confidential either under applicable laws or
regulations of any  governmental  authority or agency having  jurisdiction  over
such matters or under reasonable  corporate policies of Management  Company;  or
(ii) any Intellectual Property.

         D. Management  Company shall (to the extent permitted by law) assign to
Owner,  or to any other  manager  employed  by Owner to  operate  and manage the
Hotel, all operating licenses for the Hotel which have been issued in Management
Company's name;  provided that if Management Company has expended any of its own
funds  in the  acquisition  of any  of  such  licenses,  Owner  shall  reimburse
Management Company therefor if it has not done so already.

         E. Owner agrees that Hotel  reservations and any and all contracts made
in connection  with Hotel  convention,  banquet or other group  services made by
Management  Company in the  ordinary and normal  course of  business,  for dates
subsequent  to  the  date  of  Termination  and at  rates  prevailing  for  such
reservations  at the time they were made,  shall be honored and remain in effect
after Termination of this Agreement.

         F.       Various other actions shall be taken, as described in this
Agreement, including, but not limited to, the actions described in Sections
12.04 B, 14.02, 17.01, 17.02, and 17.03.

         G.      Management Company shall cooperate with the new operator of the
Hotel as to effect a smooth transition and shall peacefully vacate and surrender
the Hotel to Owner.

         Notwithstanding any provision in the Agreement to the contrary,  in the
event that Owner shall elect (i) not to renew this Agreement for the first (1st)
renewal term (described in Section 5.01 above) after the Initial Term or (ii) to
terminate this Agreement for any





<PAGE>



reason in accordance  with the terms hereof (except in the case of a Termination
by  Owner  under  Section  16.03  below),  Owner  shall be  responsible  for all
reasonable  and  customary  costs  actually  incurred by  Management  Company in
connection   with  the  Termination  of  this  Agreement   (including,   without
limitation,  in addition to those employee-related costs which are to be paid as
described and in accordance with Section 14.02,  any severance  payments paid to
any employee of the Hotel in connection with such Termination).

         The provisions of this Section 5.02 shall survive any Termination.

                                   ARTICLE VI
                       COMPENSATION OF MANAGEMENT COMPANY

6.01     Management Fees

         A.  Base  Management  Fees.  In  consideration  of the  services  to be
performed  during the term of this Agreement by Management  Company,  Management
Company shall be paid a periodic base management fee ("Base  Management Fee") in
the  amount  of two and  one-half  percent  (2.5%)  of Gross  Revenues  for each
Accounting  Period.  Each such periodic fee shall be paid to Management  Company
(or retained by Management  Company as provided below) at such time as the final
monthly report for such  Accounting  Period is submitted to Owner as provided in
Section 6.02 A below.

         B. Incentive  Management  Fees. In addition to the Base  Management Fee
and in  consideration  of the services to be  performed  during the term of this
Agreement,  Management  Company  shall be paid for each  Fiscal Year (or partial
Fiscal Year),  subject to Section 6.02 B, a quarterly  incentive fee ("Incentive
Fee") equal to fifteen percent (15%) of the amount by which Operating Profit for
such Fiscal Year  exceeds the  projected  Operating  Profit as  described in the
Annual  Operating  Projection  for such  Fiscal Year  (prorated  for any partial
Fiscal Year).  Each such  quarterly fee shall be paid to Management  Company (or
retained by Management  Company as provided below) within twenty (20) days after
the close of each calendar quarter, based upon the year-to-date actual Operating
Profit as compared to the year-to-date projected Operating Profit.

         C. Notwithstanding any provision in this Agreement to the contrary,  in
no event  shall  Management  Company be paid an amount in any  calendar  quarter
(prorated  for any  partial  calendar  quarter)  for  Base  Management  Fee plus
Incentive Fees exceeding four and one-half percent (4.5%) of Gross Revenues.

6.02     Accounting and Interim Payment

         A.   Within twenty (20) days after the close of each Accounting Period,
Management Company shall submit an accounting to Owner showing Gross Revenues,





<PAGE>



Deductions,  Operating  Profit,  and  distributions  thereof for such Accounting
Period.  Management  Company shall  transfer to Owner with each  accounting  any
Operating  Profit or other sums then  available  for  distribution  to Owner and
shall retain any  periodic  Base and  quarterly  Incentive  Fees due  Management
Company.  Such interim accountings shall be in the form of statements reasonably
approved by Owner.  Additionally,  Management  Company  shall  submit  operating
statistics of the Hotel on all business days,  via electronic  mail, to Owner in
form reasonably acceptable to Management Company and Owner.

         B.  The  calculation  and  payment  of  the  management  fees  and  the
distribution  of Operating  Profit made with respect to each  Accounting  Period
within a Fiscal Year shall be accounted  for  cumulatively.  Within  thirty (30)
days after the close of each Fiscal  Year,  Management  Company  shall submit an
accounting,  as more fully  described  in Section  9.01 for such  Fiscal Year to
Owner, which accounting shall be controlling over the interim  accountings.  Any
adjustments required for such Fiscal Year by such final accounting shall be made
promptly by the parties.

6.03     Reimbursements to Management Company

         In  addition  to all other  amounts  for which  Management  Company  is
entitled to reimbursement from Owner pursuant to this Agreement, Owner agrees to
reimburse Management Company for all travel and out-of-pocket  expenses (such as
fax,  postage,  telephone and express mail) of the corporate  staff (defined for
purposes  of this  Section  6.03 B as  those  employees  who are not  ordinarily
located at the Hotel) of Management Company and Management Company's Affiliates,
which are directly  related to the efforts of such staff on behalf of the Hotel;
provided,  however,  the  reimbursements  for such expenses shall be billed,  as
Deductions, to the Hotel at cost (without duplication of those expenses included
in Group Services).


                                   ARTICLE VII
                    WORKING CAPITAL AND FIXED ASSET SUPPLIES

7.01     Working Capital and Inventories

         At the Effective  Date,  Owner shall provide to Management  Company the
funds  necessary to supply the Hotel with Working  Capital and  Inventories in a
minimum  amount of $75,000  and shall at all times  thereafter  maintain  in the
Hotel's  operating  accounts a minimum  balance in the amount of $50,000 (or, if
necessary,  such  greater  amount  to assure  the  uninterrupted  and  efficient
operation of the Hotel, including,  without limitation,  sufficient funds to pay
budgeted  current  liabilities as they fall due and to replace  Inventories  and
Fixed Asset Supplies as they are consumed) in accordance  with the provisions of
Section 9.05 hereof. Working Capital so advanced shall remain the property





<PAGE>



of Owner  throughout the term of this  Agreement,  and Management  Company shall
make no claim thereto.

7.02     Fixed Asset Supplies

         Owner shall  provide such funds as  Management  Company may  reasonably
determine to be necessary to supply the Hotel with Fixed Asset  Supplies.  Fixed
Asset  Supplies  shall at all times be owned by,  and be the sole  property  of,
Owner, and Management Company shall make no claim thereto.




                                  ARTICLE VIII
                      MAINTENANCE, REPLACEMENT AND CHANGES

8.01     Routine Repairs and Maintenance

         From and after the Effective  Date,  Management  Company shall maintain
the Hotel in good repair and condition and in conformity  with  applicable  laws
and  regulations  and in  accordance  with  the  Licensor's  standards  for  the
operation  of the  Hotel  and  shall  make  or  cause  to be made  such  routine
maintenance,  repairs and minor  alterations,  the cost of which can be expensed
under generally accepted accounting principles, as Management Company, from time
to time,  deems  necessary  for  such  purposes.  The cost of such  maintenance,
repairs and  alterations  shall be paid from Gross Revenues and shall be treated
as a Deduction in determining Operating Profit.

8.02     [Intentionally Deleted]

8.03     Building Alterations, Improvements, Renewals and Replacements

         A.  Management  Company  shall  prepare an annual  estimate  ("Building
Estimate")   of  the  expenses   necessary  for  major   repairs,   alterations,
improvements,   renewals   and   replacements   (which   repairs,   alterations,
improvements  and  renewals  are not  routine  maintenance,  repairs  and  minor
alterations  referred  to  in  Section  8.01)  to  the  structural,  mechanical,
electrical,  heating,  ventilating,  air  conditioning,  plumbing  and  vertical
transportation   elements   of  the  Hotel   building   ("Owner-Funded   Capital
Expenditures") and shall submit such Building Estimate to Owner for its approval
at the same time the Annual  Operating  Projection  described in Section 9.03 is
submitted.   Management   Company  shall  not  make  any  Owner-Funded   Capital
Expenditures  without the prior  written  consent of Owner  except to the extent
such  expenditures are (i) required by any law (including,  without  limitation,
any law, ordinance, code or regulation of any





<PAGE>



governmental  authority  or agency  having  jurisdiction  over the  business  or
operation of the Hotel), or (ii) otherwise required to avoid the risk of harm or
further damage to persons or property.

         B. The cost of all  Owner-Funded  Capital  Expenditures  shall be borne
solely by Owner and shall not be paid from Gross Revenues.  The failure of Owner
to provide funding for any Owner-Funded Capital Expenditure  described in clause
(i) or (ii) of Section 8.03 A shall be a Default by Owner and Management Company
shall be entitled to terminate this Agreement  (along with other remedies it may
have under this Agreement).

8.04              Liens

                  Management  Company and Owner shall use their best  efforts to
prevent  any liens from  being  filed  against  the Hotel  which  arise from any
maintenance,   changes,   repairs,   alterations,   improvements,   renewals  or
replacements  in or to the Hotel.  They shall  cooperate  fully in obtaining the
release of any such liens, and the cost thereof,  if the lien was not occasioned
by the fault of either  party,  shall be treated  the same as the cost  incurred
pursuant to Section  8.03. If the lien arises as a result of the fault of either
party,  then the  party  at fault  shall  bear  the cost of  obtaining  the lien
release.

8.05              Ownership of Replacements

                  All changes, repairs, alterations,  improvements, renewals, or
replacements  to the Hotel  made  pursuant  to this  Article  VIII  shall be the
property of Owner.


                                   ARTICLE IX
                          BOOKKEEPING AND BANK ACCOUNTS

9.01              Books and Records

         Books of control and account  shall be kept on the accrual basis and in
material  respects in  accordance  with the Uniform  System of Accounts with the
exceptions provided in this Agreement. Owner may, at reasonable intervals during
Management Company's normal business hours, examine such records.  Within thirty
(30) days  following  the close of each Fiscal Year,  Management  Company  shall
furnish  Owner a statement  (the "Annual  Operating  Statement")  in  reasonable
detail  summarizing the Hotel  operations for such Fiscal Year and a certificate
of Management  Company's chief accounting  officer certifying that such year-end
statement is true and correct to the best of his knowledge and belief.  If Owner
raises no  objections  within  thirty  (30) days  after  receipt  of the  Annual
Operating Statement, the Annual Operating Statement shall be deemed to have been
accepted by Owner. If Owner does raise any such  objection,  Owner shall arrange
for an independent





<PAGE>



audit to be commenced  within sixty (60) days after the date of such  objection,
and shall diligently cause such audit to be completed within a reasonable period
of time. Owner shall pay all costs of such audit at its sole expense (and not as
a Deduction);  however,  if such audit  establishes that Management  Company has
understated  Operating Profit for that Fiscal Year by five percent (5%) or more,
the reasonable costs and expenses of such audit shall be paid as a Deduction.

9.02              Hotel Accounts: Expenditures

                  A. All funds  derived  from the  operation  of the Hotel shall
belong to and be the  property  of Owner and shall be  deposited  by  Management
Company in bank accounts  established by Management  Company for Owner in one or
more banks  approved  by Owner.  All  disbursements  and  withdrawals  from said
accounts as required or permitted under this Agreement (i.e., the payment of all
Deductions  and the  distribution  of Operating  Profit) shall be made by bonded
representatives  of Management  Company whose  signatures have been  authorized.
Reasonable  petty cash funds and house banks, in amounts  satisfactory to Owner,
shall be maintained at the Hotel.

                  B. All  payments to be made by  Management  Company  hereunder
shall be made from  authorized  bank  accounts,  from  petty  cash funds or from
Working  Capital  provided  by Owner  pursuant  to Section  7.01.  All debts and
liabilities  which have been validly incurred by Management  Company 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 Owner to the
extent funds are not available for that purpose from Gross Revenues.  Management
Company  shall not be  required  to make any  advance  or  payment to or for the
account of Owner except out of such funds,  and Management  Company shall not be
obligated  to incur any  liability or  obligation  for Owner's  account  without
assurances  that necessary  funds for the discharge  thereof will be provided by
Owner.

                  C. All bank  accounts  shall  be owned by Owner  and  shall be
solely controlled and operated by Management  Company as the agent of Owner; the
agency status of Management Company shall be designated on the checks and drafts
drawn on such banks accounts.

                  D. Management  Company shall, on a bi-weekly basis,  cause all
amounts in the Hotel operating accounts in excess of the $50,000 minimum balance
to be wired  electronically  to a bank account  designated  for such purposes by
Owner.

9.03        Annual Operating Projection

            A.   On or before the fifteenth day of November of each Fiscal Year,
excepting Fiscal Year 2000, a preliminary draft of the budget ("Annual Operating





<PAGE>



Projection"),  setting forth Management  Company's  reasonable estimate of Gross
Revenues, Deductions, Operating Profit and Building Estimate for the forthcoming
Fiscal Year for the Hotel, shall be prepared by Management Company and submitted
to Owner for its review and approval (which shall not be  unreasonably  withheld
or  delayed).  If Owner  does  not  approve  the  preliminary  Annual  Operating
Projection  in full,  within  forty- five (45) days of its receipt,  Owner shall
notify  Management  Company of each category of expenses (a "Category") of which
Owner does not approve. The preliminary Annual Operating  Projection  thereafter
shall be revised as Owner and  Management  Company  may agree,  and shall,  upon
Owner's  approval,  constitute the approved Annual Operating  Projection for the
forthcoming  Fiscal  Year.  In the event that  Owner does not notify  Management
Company in writing with said 45-day period that it does not approve of specified
Categories,  the preliminary  Annual  Operating  Projection shall constitute the
Annual  Operating  Projection for the  forthcoming  Fiscal Year. The approval of
Owner shall not be required  with  respect to any Category if, and to the extent
that, the preliminary Annual Operating  Projection with respect to such Category
for a given  Fiscal Year is, in all  material  respects,  the same as the Annual
Operating  Projection  for  the  preceding  Fiscal  Year  with  adjustments  for
inflation,  except  if such  Category  is no  longer  required,  or if  expenses
incurred  in such  Category  were not  reasonable,  in  Owner's  and  Management
Company's reasonable discretion.

                  B. The Annual  Operating  Projection  is an estimate  only and
Management  Company shall, from time to time during each Fiscal Year as it deems
appropriate,   suggest  revisions  thereto  for  Owner's  review  and  approval.
Management  Company will at all times give good faith  consideration  to Owner's
suggestions regarding any Annual Operating Projection.  Management Company shall
not,  except as provided  in Sections  8.03 A above and 9.03 C and 9.03 D below,
depart from any approved Annual Operating  Projection,  or make any expenditures
or incur any expenses not provided for therein, without Owner's prior approval.

                  C. If Owner and  Management  Company fail to mutually agree on
any given Category or Categories in the preliminary Annual Operating  Projection
within forty- five (45) days after the  submission  to Owner of the  preliminary
draft  described  in the first  sentence  of 9.03 A,  Management  Company  shall
continue  to manage and  operate the Hotel as follows  until such  agreement  is
reached:  (i) with respect to each Category in such preliminary Annual Operating
Projection  which has been  approved  or deemed  approved  by Owner,  Management
Company may make  expenditures and incur  obligations  under such Category as so
approved;  and (ii) with respect to any Category  which has not been approved by
Owner,   Management   Company  may  continue  to  make  expenditures  and  incur
obligations under such Category in accordance with the amounts provided for such
Category in the Annual Operating  Projection approved for the prior Fiscal Year,
with adjustments for inflation with such additional adjustments therein as shall
be necessary to take into account (x) any  differences in occupancy which may be
experienced in the





<PAGE>



current  Fiscal Year as compared to the prior Fiscal Year and (y) any  increased
costs  beyond  the  control of  Management  Company  for the same or  comparable
services or products.

                  D. Owner and Management  Company  acknowledge  that the Annual
Operating  Projection  approved by Owner is an estimate only and that unforeseen
circumstances  such as,  but not  limited  to,  the costs of  labor,  materials,
services  and  supplies,  casualty,  operation  of law, or  economic  and market
conditions may make adherence to the Annual Operating  Projection  impracticable
for  certain  Categories.  If in the  judgment  of the  Management  Company  the
expenditures  reasonably expected to be made in any of the following  Categories
during the then  current  Fiscal Year  exceed by ten  percent  (10%) or more the
amount  budgeted  for  such  Category  in  the  then  current  Annual  Operating
Projection,  Management  Company shall notify Owner promptly in writing:  Rooms;
Food, Beverage and Banquet;  Telephone, Gift Shop, and other; Administrative and
General;  Advertising and Sales;  Repairs and  Maintenance;  Salaries and Wages.
Management Company shall, as soon as practicable  thereafter,  consult with, and
advise,  Owner  concerning  expenditures  for such Category or  Categories.  The
Category under which any expenditure or obligation  falls shall be determined in
accordance with the Uniform System of Accounts.

9.04     Operating Deficits, Credit

         If Management  Company  should  anticipate  any Operating  Loss for any
Accounting  Period,  Management  Company  shall  immediately  so advise Owner in
writing,   setting  forth  the  estimated  amount  of  such  deficiency  and  an
explanation or justification therefor.

9.05     Reduction of Working Capital

     To the extent that the Working  Capital  becomes  reduced to an amount less
than  $75,000,  additional  funds in a sum equal to the  difference  between the
$75,000 and the then Working Capital shall be provided by Owner within three (3)
days  after  Management  Company  has  given  written  notice  to  Owner of such
reduction of Working Capital.


                                    ARTICLE X
                                LICENSE AGREEMENT

         During the term of this Agreement, Management Company agrees to operate
the  Hotel  in  accordance   with  all  rules,   regulations,   inspections  and
requirements of Licensor under the License  Agreement.  If the License Agreement
pertaining to the Hotel shall





<PAGE>



terminate,  Management  Company shall cease operating the Hotel as a Holiday Inn
hotel. In the event of any conflicts  between any provision(s) of this Agreement
and the License  Agreement,  the  provision(s)  of the License  Agreement  shall
control.  Notwithstanding the consent of Licensor to this Management  Agreement,
Owner and all guarantors  shall remain liable to Licensor under the terms of the
License Agreement pertaining to the Hotel.


                                   ARTICLE XI
                           POSSESSION AND USE OF HOTEL

11.01     Use

    A.  Owner  covenants  that,  so long as an Event of  Default  by  Management
Company has not occurred and Owner has not exercised any right to terminate this
Agreement (under any Section of this Agreement),  Management  Company shall have
the right to quietly hold, occupy and enjoy the Hotel throughout the term hereof
free from hindrance or ejection by Owner or other party claiming under,  through
or by right of Owner, except as may be otherwise specified in this Agreement.

         B.  Management Company shall manage and operate the Hotel in accordance
with the License Agreement and shall in addition comply with and abide by all
applicable laws, ordinances, and regulations.

         C. Provided that Owner shall first have employed a replacement  manager
for the Hotel  satisfactory to and approved by the "Licensor" under the Licensee
Agreement,  Management Company shall have the option to terminate this Agreement
at any time upon  sixty  (60)  days'  written  notice to Owner in the event of a
withdrawal  or  revocation,  by any lawful  governing  body having  jurisdiction
thereof,  of any material  license or permit  required for Management  Company's
performance hereunder,  if such withdrawal or revocation is due to circumstances
beyond Management Company's control,  such termination to be effective as of the
date such replacement manager has commenced  management of the Hotel pursuant to
its agreement with Owner.

11.02    Owner's Right to Inspect

         Owner  or its  agent  shall  have  access  to the  Hotel at any and all
reasonable  times for the purpose of inspecting  or protecting  the same against
fire or other casualty,  prevention of damage to the Hotel,  inspection,  making
repairs, or showing the Hotel to prospective purchasers,  tenants or mortgagees.
Owner shall  provide at least 24 hours'  notice to  Management  Company prior to
exercising  its  rights  under  this  Section  11.02,  except in the event of an
emergency.






<PAGE>



11.03    Group Services

         A. Owner shall reimburse  Management Company for certain other services
("Group  Services")  as may  from  time to  time be  provided  to the  Hotel  by
Management  Company or Management  Company's  Affiliates  more  efficiently on a
group rather than on an individual  basis.  The Group  Services  shall  include,
without limitation, the following: (a) marketing, advertising and promotion; (b)
payroll  processing,  accounting  and  MIS  support  services;  (c)  recruiting,
training,  career  development  and  relocation  in accordance  with  Management
Company's  or  its   Affiliates'   relocation   plan;   (d)  employee   benefits
administration; (e) engineering and risk management; (f) information technology;
(g) legal  support  (such as license and permit  coordination  and  standardized
contracts);  (h) purchasing  arising out of ordinary hotel  operations;  and (i)
such other  additional  services as are or may be, from time to time,  furnished
for the benefit of Management  Company's  hotels or in substitution for services
now  performed  at  Management  Company's  individual  hotels  which may be more
efficiently  performed on a group basis.  Notwithstanding  any provision in this
Agreement to the contrary, in the event and so long as Management Company or any
Management Company Affiliate provides centralized  accounting support systems to
the Hotel, Owner shall pay to Management Company a "Centralized  Accounting Fee"
equal to One Thousand  Dollars  ($1,000.00) per calendar month (prorated for any
partial  calendar month),  to be paid (or retained by Management  Company in the
manner  provided in Section 6.02 above) at the same time the Base Management Fee
is paid to (or retained by) Management Company.

         B. Group  Services  shall  consist of the actual  cost of the  services
without mark- up or profit to Management  Company or any  Affiliates,  but shall
include (a) salary and employee  benefit  costs,  (b) cost of equipment  used in
performing Group Services, and (c) overhead costs,  reasonably allocated thereto
of any office providing Group Services. Costs and expenses incurred in providing
Group  Services shall be allocated on a fair and equitable  basis,  consistently
applied, among all of Management Company's hotels receiving such services in the
manner described in the Annual Operating Projection;  the costs and expenses for
Group  Services  shall not exceed the amounts for such services set forth in the
Annual Operating  Projection.  Costs of Group Services shall be a Deduction.  In
addition,  if equipment is installed  and  maintained at the Hotel in connection
with the rendition of any Group  Services,  all costs thereof will be charged to
the operation of the Hotel,  as  determined by Management  Company in good faith
and  consistent  with  GAAP and the  Uniform  System of  Accounts,  and shall be
approved in advance by Owner, such approval not to be unreasonably withheld.

         C. In no event shall Management  Company's Affiliates be deemed a party
to this Agreement or responsible in any way for Management Company's obligations
pursuant to this Agreement by virtue of providing any services described in this
Agreement (including,  without limitation, Group Services) to Management Company
and Owner reimbursing Management Company for the expenses in connection
therewith.





<PAGE>






                                   ARTICLE XII
                                    INSURANCE

12.01    Property and Operational Insurance

         A.  Management  Company shall,  commencing  with the Effective Date and
continuing  throughout the term of this  Agreement,  procure and maintain,  as a
Deduction,  with insurance companies reasonably  acceptable to Owner,  Licensor,
and any Qualified Lender, or by legally  qualifying itself as a self insurer,  a
minimum of the following insurance:

                  1. Insurance on the Hotel (including contents) against loss or
damage by fire,  lightning  and all other  risks  covered by the usual  standard
extended coverage endorsements,  with deductible limits approved by Owner, in an
amount  not less than  ninety  percent  (90%) of the  replacement  cost  thereof
(Management Company  acknowledges that Owner may require such insurance to be in
an amount up to one hundred percent (100%) of replacement cost);

                  2. Insurance against loss or damage from explosion of boilers,
pressure vessels, pressure pipes and sprinklers, to the extent applicable,
installed in the Hotel;

                  3. Insurance on the Hotel (including contents) against loss or
damage by earth movement, with deductible limits approved by Owner, in an amount
to be reasonably determined by Owner consistent with local market conditions;

                  4. Business  interruption  insurance  covering loss of profits
and necessary  continuing  expenses for  interruptions  caused by any occurrence
covered by the insurance  referred to in Section 12.01 A 1, and 3, of a type and
in amounts and with such deductible limits as are approved by Owner;

                  5. Workers' compensation and employer's liability insurance as
may be required under applicable laws and employment-related practices insurance
covering all of Management  Company's  employees at the Hotel in each case, with
such deductible limits as are approved by Owner;

                  6.  Fidelity  bonds,  in amounts  and with  deductible  limits
approved   by   Owner,   covering   Management   Company's   employees   in  job
classifications  which Owner reasonably  requests be bonded,  and  comprehensive
crime insurance to the extent that  Management  Company and Owner mutually agree
it is necessary for the Hotel;






<PAGE>



                  7. Comprehensive General Public Liability insurance (including
protective  liability coverage on operations of independent  contractors engaged
in  construction,   operation  or  management,   blanket  contractual  liability
insurance,  liquor law legal liability insurance,  products liability insurance,
and garage  keeper's  liability  insurance),  on an  "occurrence"  basis for the
benefit of Owner and Management  Company  against  claims for "personal  injury"
liability,  including,  without  limitation,  bodily injury,  death, or property
damage  liability,  with a  limit  of not  less  than  Fifteen  Million  Dollars
($15,000,000)  in the event of  "personal  injury"  to any  number of persons or
damage to property arising out of any one occurrence;  such insurance, which may
be furnished  under a "primary  policy"  (which shall  include an aggregate  per
location  endorsement) and an "umbrella" policy or policies,  shall also include
(i) coverage  against  liability for bodily  injuries or property damage arising
out of the use by or on  behalf of Owner or  Management  Company  of any  owned,
non-owned,  or  hired  automotive  equipment  for a limit  not  less  than  that
specified  above  and  (ii)  if  applicable,  garage  keeper's  legal  liability
insurance in the amount sufficient to prevent Owner from becoming a co-insurer;

                  8. Crime insurance and errors and omissions insurance insuring
Owner against  intentional or negligent acts or omissions of Management  Company
or its employees,  such insurance to be in such amounts, with such carriers, and
under such  policies,  as may from time to time be  requested  and  approved  by
Owner; and

                  9. Such other  insurance in amounts as Management  Company and
Owner, Licensor, or any Qualified Lender, in their reasonable judgment, mutually
deem advisable for protection against claims, liabilities and losses arising out
of or connected with the operation of the Hotel.

12.02    General Insurance Provisions

     All policies of insurance  required  under Section  12.01,  Paragraphs  1-4
shall be  carried in the name of  Management  Company,  Owner and the  Qualified
Lender;  and  losses  thereunder  shall  be  payable  to the  parties  as  their
respective  interests  may appear.  All  insurance  described in Section  12.01,
Paragraphs 6-8 shall name Owner as an additional insured.

12.03    Coverage

         All insurance  described in Section 12.01 may be obtained by Management
Company by endorsement or equivalent means under its blanket insurance policies,
provided that such blanket  policies are  satisfactory  to and approved by Owner
(and any  Qualified  Lender).  Management  Company may self insure or  otherwise
retain such risks or portions  thereof as it does with respect to other  similar
hotels it owns, leases or manages.






<PAGE>



12.04    Cost and Expense

     A.         Insurance premiums and any costs or expenses with respect to the
insurance described in Section 12.01 shall be Deductions in determining
Operating Profit.

         B. Upon  Termination  of this  Agreement,  an escrow  fund in an amount
reasonably  acceptable to Management  Company  shall be  established  from Gross
Revenues  (or, if Gross  Revenues  are not  sufficient,  with funds  provided by
Owner)  to  cover  the  amount  of any  costs  which,  in  Management  Company's
reasonable  business  judgement,  will likely need to be paid by either Owner or
Management Company with respect to pending or contingent claims, including those
which arise after such  Termination  for causes  arising during the term of this
Agreement.  Upon the final disposition of all such pending or contingent claims,
any unexpended funds remaining in such escrow shall be paid to Owner.

12.05    Policies and Endorsements

         A. The party procuring  insurance  hereunder shall deliver to the other
party  certificates  of  insurance  with  respect to all  policies 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  not less than ten (10) days  prior to the  respective
dates of expiration.

         B. All policies of insurance provided for under this Article XII shall,
to the extent obtainable,  have attached thereto an endorsement that such policy
shall not be canceled or materially  changed  without at least thirty (30) days'
prior written notice to Owner and Management Company.

         C. Owner  may,  at its  option,  procure  and  maintain  the  insurance
specified in Section  12.01,  Paragraphs 1 through 4, with  insurance  companies
reasonably acceptable to Management Company,  subject to the following:  (i) all
such  policies  of  insurance  shall  be  carried  in the  name of  Owner,  with
Management Company as an additional insured, (ii) any property losses thereunder
shall be payable to the respective  parties as their  interests may appear,  and
(iii)  premiums  for such  insurance  coverage  shall be treated as  Deductions,
provided that if the cost of such  insurance  procured by Owner exceeds the cost
of Management Company's comparable coverage,  all such excess costs shall be the
sole responsibility of Owner and shall not be a Deduction. Should Owner exercise
its option to procure the insurance described in this subsection C, Owner hereby
waives its rights of recovery from  Management  Company and its Affiliates  (and
their respective directors,  officers,  shareholders,  agents and employees) for
loss or damage to the Hotel, and any resultant interruption of business.






<PAGE>



12.06    Indemnification

         A. Owner shall indemnify, defend and hold Management Company, Crestline
Capital  Corporation and their  respective  directors,  officers,  shareholders,
employees and agents (collectively,  "Management Company Indemnified  Parties"),
harmless from and against all claims, causes of action, losses,  attorneys' fees
and other costs and expenses (including, but not limited to, liquidated damages,
transfer fees, and termination  costs),  liabilities  and damages  (collectively
referred  to as  "Claims")  imposed  upon or  incurred  by or  asserted  against
Management Company  Indemnified Parties under, or on account of, or with respect
to this Agreement arising out of or resulting from (i) Management  Company's due
performance of this Agreement or (ii) the failure by Owner to provide  necessary
funds to make  necessary  Owner-Funded  Capital  Expenditures  required  in this
Agreement or to comply with applicable  legal  requirements or any  requirements
imposed by the Licensor in accordance with the License Agreement or necessary to
maintain the safety or structural  soundness of the Hotel.  Without limiting the
generality of the foregoing,  Owner shall indemnify,  defend and hold Management
Company Indemnified Parties harmless from and against all Claims imposed upon or
incurred by or asserted against Management Company  Indemnified Parties under or
with respect to the License Agreement which arise as a result of (a) any default
by Owner under the terms of this Agreement or the License  Agreement (or related
"Owner  Agreement")  unless  such  default  is a result of gross  negligence  or
willful misconduct on the part of Management Company;  (b) the transfer by Owner
of the Hotel or any interest of Owner in the Hotel;  or (c) the failure by Owner
to provide necessary funds to make necessary  Owner-Funded  Capital Expenditures
required  to comply  with  applicable  legal  requirements  or any  requirements
imposed by the Licensor in accordance with the License Agreement or necessary to
maintain the safety or structural soundness of the Hotel.

         B.  Owner  shall   indemnify,   defend  and  hold  Management   Company
Indemnified  Parties  harmless  from and  against  all Claims  arising out of or
resulting  from all  liabilities  which accrued (or which stem from events which
occurred) prior to the Effective Date (referred to as "Prior Liabilities").  Any
such Prior  Liabilities shall be paid for by Owner (not from Gross Revenues) and
shall not be treated as Deductions.

         C. Management  Company shall  indemnify,  defend and hold Owner and its
directors,  officers,  shareholders,  employees  and  agents  harmless  from and
against all Claims  arising out of or  resulting  from any gross  negligence  or
willful misconduct on the part of Management Company, its employees or agents.

         D.    The provisions of this Section 12.06 shall survive Termination of
this Agreement.








<PAGE>

                                  ARTICLE XIII

                         REAL ESTATE AND PROPERTY TAXES

13.01    Impositions

         During the term of the Agreement all real estate or ad valorem property
taxes, assessments, inventory and personal property taxes and similar charges on
or relating to the Hotel  (referred to in this  Article  XIII as  "Impositions")
following or allocable to the period  following the Effective Date shall be paid
by  Management  Company  (except as Owner  shall  advise  Management  Company of
Owner's  intent to pay such taxes),  to the extent  sufficient  Working  Capital
exists,  from Gross Revenues before any fine,  penalties,  or interest are added
thereto or liens  placed upon the Hotel,  unless  payment is in good faith being
contested and enforcement there is stayed. Management Company, either in its own
name or, if  legally  required,  in Owner's  name,  may  contest by  appropriate
proceedings conducted in good faith and with due diligence the amount,  validity
or application in whole or in part of any such  imposition or any lien therefor,
and Owner shall have the right to  participate in any such  proceedings.  In the
event Gross Revenues are likely to be insufficient to pay such  Impositions when
due,  Management  Company  shall so advise  Owner no later than thirty (30) days
prior to the due date of such  Impositions in order to provide Owner  sufficient
time in which to provide funds  sufficient for the payment of such  Impositions.
Management  Company shall also, no later than thirty (30) days prior to the date
payment is due or three (3) days  following  the  written  request  from  Owner,
furnish Owner with copies of official tax bills and  assessments and evidence of
payment or contest  thereof.  Any refund or rebate of any  Impositions  shall be
credited  to  Operating  Profit  in the  Fiscal  Year in which  such  refund  is
received. All reasonable costs incurred in connection with any such negotiations
or proceedings shall constitute a Deduction for the year in which they are paid.
Notwithstanding the foregoing,  no such contest shall be conducted if it will in
any way endanger  title to the Hotel,  the land on which the Hotel is located or
Owner's  interest in the Hotel,  create a cloud on title to any of the foregoing
or constitute a default under any  financing  secured by the Hotel.  Owner shall
within  thirty (30) days of receipt of  evidence  of payment or contest  furnish
Management  Company  with copies of official  tax bills and  assessments  and of
payment or contest  thereof.  All Impositions  shall constitute a Deduction from
Gross Revenues n determining Operating Profit provided, however, that any fines,
penalties or interest added thereto to the extent resulting from Owner's acts or
omissions shall be paid by Owner at its sole expense.

13.02    Owner's Responsibility

         "Impositions"  shall not include the  following,  all of which shall be
paid solely by Owner, not from Gross Revenues: (1) Any income, excess profits or
revenue taxes of Owner or any person,  firm or entity as a partner of Owner; (2)
Special assessments imposed because of facilities which are constructed by or on
behalf of the assessing  jurisdiction (e.g.,  roads,  sidewalks,  sewers,  etc.)
which directly benefit the Hotel; (3)





<PAGE>



"Impact Fees" which are required of Owner as a condition to the issuance of site
plan approval,  zoning  variances or building  permits;  and (4)  "Tax-increment
financing"  or  similar  financing  whereby  the  municipality  or other  taxing
authority has assisted in financing the construction of the Hotel by temporarily
reducing or abating normal Impositions in return for substantially higher levels
of Impositions at later dates.


                                   ARTICLE XIV
                                 HOTEL EMPLOYEES

14.01    Employees

         A. Management Company shall have the discretion and obligation to hire,
promote, supervise, direct, train all employees at the Hotel, to fix their terms
of compensation  and,  generally to establish and maintain  policies relating to
employment  at the Hotel,  such  policies to be  comparable to policies at other
similar hotels managed by Management  Company.  All such employees  shall at all
times be the employees of Management  Company and not of Owner,  and Owner shall
have no  responsibility  or control  respecting such employees  unless otherwise
specified in this Agreement.  No collective bargaining agreements will be signed
without Owner's approval.  Management Company shall inform Owner as to the name,
background,  and  qualifications  of the Hotel's General Manager.  If Management
Company desires to change the General Manager, Management Company shall endeavor
to give Owner at least forty-five (45) days prior notice,  if feasible,  of such
change  stating the reasons  for such  change and  informing  Owner of the name,
background,  and qualifications of any replacement General Manager.  Owner shall
have the right to interview the proposed  replacement  General Manager and shall
be given the  opportunity  to meet with the  appropriate  senior  executives  of
Management  Company to discuss the  advisability  of  effectuating  any proposed
hiring, dismissal or transfer and any possible alternatives thereto.  Management
Company  shall  consider in good faith the  opinions  and requests of Owner with
respect to such matters,  and, if Management Company elects not to implement any
such  request,  Management  Company  shall  explain  its  decision  to  Owner in
reasonable detail.

         B. Owner shall  reimburse  Management  Company for (i) salaries,  wages
and/or benefits of any officers, directors or employees of Management Company or
Management  Company's  Affiliates who shall be regularly or temporarily employed
or assigned on a full- time basis at the Hotel and (ii)  personnel of Management
Company or Management  Company's  Affiliates not employed at the Hotel providing
information  systems support or legal,  accounting or tax services to Management
Company in connection  with the operation of the Hotel  (without  duplication of
reimbursements included in Group Services).

         C.   Management Company and Owner agree to cooperate with each other to





<PAGE>



attempt to avoid any  disqualification  of qualified  employee  benefit plans of
either of them to the extent  such plans may be affected  by the  provisions  of
this  Agreement or the services  provided  hereunder;  provided,  however,  that
neither  Management  Company  nor Owner shall be required to change the terms of
any such plan as part of such cooperation.

         D. All  personnel  employed at the Hotel shall be recruited and trained
by Management Company in a manner consistent with Management Company's practices
at  other  comparable  hotels  managed  and  operated  by  Management   Company.
Management  Company  shall  decide  which,  if any, of the Hotel's  employees or
guests shall  reside at the Hotel and shall be  permitted to provide  gratuitous
accommodations,   services,  and  amenities  to  its  employees  and  guests  in
accordance with the usual practices of the hotel and travel industry, subject to
such guidelines as Owner may from time to time approve.

14.02    Termination

         At  Termination,  other  than by  reason  of an  Event  of  Default  by
Management  Company  hereunder,  an escrow fund shall be established  from Gross
Revenues  (or, if Gross  Revenues  are not  sufficient,  with funds  provided by
Owner) to reimburse  Management  Company for all costs and expenses  incurred by
Management  Company which arise out of either the transfer or the termination of
employment of Management  Company's  employees at the Hotel,  such as reasonable
transfer  costs,  unemployment  compensation,  other  employee  liability  costs
(including  without  limitation costs incurred pursuant to the Worker Retraining
and  Notification  Act of 1990 (as  amended,  the "WARN  Act")) and a reasonable
allowance for severance  pay for Executive  Employees (as defined  below) of the
Hotel who do not continue to be employed  with respect to the Hotel and who will
not be transferred to another hotel owned or managed by Management Company,  the
amount of such  allowance not to exceed an amount equal to Management  Company's
then current severance benefit for such terminated Executive  Employees,  unless
Owner otherwise approves. As used herein, the term

"Executive  Employees"  shall mean each member of the senior executive staff and
each department head of the Hotel.

14.03    Employee Claims

     A.  Management  Company  shall pay from its own  funds,  and not from Gross
Revenues,  for any  Employee  Claim and for the  defense of any  Employee  Claim
which:  (i) is a  substantial  violation of the standards of  responsible  labor
relations as generally practiced by prudent owners or operators of similar hotel
properties  in the  general  geographic  area of the  Hotel,  or (ii) is not the
isolated act of individual employees, but rather is a direct result of corporate
policies of Management Company which either encourage or fail to discourage such
conduct. In addition, Management Company shall





<PAGE>



indemnify,  defend  and hold  harmless  Owner  from  and  against  any  fines or
judgments arising out of such conduct,  and all litigation  expenses  (including
reasonable attorneys' fees and expenses) incurred in connection  therewith.  Any
dispute  between  Owner and  Management  Company as to  whether  or not  certain
conduct by Management Company is not in accordance with the aforesaid  standards
shall be resolved by arbitration.


                                   ARTICLE XV
                             DAMAGE AND CONDEMNATION

15.01    Damage and Repair

     A. If,  during the term hereof,  the Hotel is damaged or destroyed by fire,
casualty,  or other cause,  Owner shall, with all reasonable  diligence,  to the
extent that proceeds from the insurance described in Section 12.01 are available
(subject  to the  provisions  of any  Mortgage  encumbering  the Hotel) for such
purpose,  repair or replace  the  damaged or  destroyed  portion of the Hotel to
substantially the same condition as existed previously.

         B. In the event  damage  or  destruction  to the  Hotel  from any cause
materially  and adversely  affects the operation of the Hotel and Owner fails to
timely (subject to unreasonable delays caused by Management  Company,  including
unreasonable  delays in adjusting  the insurance  claim with the carriers  which
participate in Management  Company's  blanket  insurance  program)  commence and
complete the repairing,  rebuilding or replacement of the same so that the Hotel
shall be  substantially  the same as it was prior to such damage or destruction,
Management  Company may, at its option,  elect to terminate  this Agreement upon
ninety (90) days'  written  notice.  Additionally,  if the License  Agreement is
terminated  due to  Owner's  failure  to repair  and  restore  the  Hotel,  this
Agreement  shall  terminate,  effective  upon  the  termination  of the  License
Agreement.



15.02    Condemnation

         A. If all or  substantially  all of the  Hotel is taken in any  eminent
domain,  condemnation,  compulsory  acquisition,  or similar  proceeding  by any
competent  authority  for  any  public  or  quasi-public  use or  purpose,  this
Agreement  shall  terminate  as of the date  Management  Company  ceases to have
physical  possession of the Hotel.  Any award for such taking or condemnation is
to be paid to Owner,  provided that  Management  Company may advance and collect
any claims to which it may be entitled as a result of such taking in  accordance
with the terms of Section 15.02 C.






<PAGE>



         B. In the event a portion  of the  Hotel  shall be taken by the  events
described  in Section  15.02 A or the entire  Hotel is  affected  on a temporary
basis but the result is not to make it  unreasonable  to continue to operate the
Hotel, this Agreement shall not terminate. However, so much of any award for any
such  partial or temporary  taking or  condemnation  shall be made  available by
Owner,  as the Qualified  Loan  agreements  permit,  to the extent  necessary to
render the Hotel equivalent to its condition prior to such event and the balance
of such award, if any, shall be paid over to Owner.

         C. All condemnation awards or payments in lieu thereof for the value of
the land and  improvements so taken shall be the sole and exclusive  property of
Owner.  Management Company may make a claim to the condemning  authority for its
loss of business  arising from the events  described in this Section 15.02,  but
only to the extent that such claim in no way prejudices, diminishes, reduces, or
impairs Owner's rights under the preceding sentence.


                                   ARTICLE XVI
                                    DEFAULTS

16.01    Default

     Each of the following shall constitute a "Default," to the extent permitted
by applicable law:

         A. The appointment of a receiver,  trustee, or custodian for all or any
substantial part of the property of Management Company or Owner, as the case may
be, if such appointment is not set aside or vacated within sixty (60) days.

         B. The commencement by Management Company or Owner, as the case may be,
of any voluntary case or proceeding  under present or future federal  bankruptcy
laws or  under  any  other  bankruptcy,  insolvency,  or other  laws  respecting
debtor's rights.

         C.   The making of a general assignment by Management Company or Owner,
as the case may be, for the benefit of its creditors.

         D. The entry against  Management  Company or Owner, as the case may be,
or any "order for relief" or other  judgment or decree by any court of competent
jurisdiction in any involuntary  proceeding against Management Company or Owner,
as the case may be, under any present or future federal bankruptcy laws or under
any other bankruptcy,  insolvency,  or other laws respecting debtor's rights, if
such order, judgment, or decree continues unstayed and in effect for a period of
sixty (60) consecutive days.






<PAGE>



         E. The failure of Management  Company or Owner,  as the case may be, to
make any payment to be made in accordance  with the terms hereof within ten (10)
days after written notice, when such payment is due and payable.

         F.  Receipt by the Owner of any notice  from the  Licensor  claiming or
alleging any default under the License Agreement,  if such default is due to any
act or omission of Owner or Management  Company,  as the case may be, and is not
cured,  to the  satisfaction  of the Licensor  within fifteen (15) business days
following the Owner's  receipt of such notice,  or such time as set forth in the
License  Agreement.  If such default  cannot  reasonably be cured within fifteen
(15)  business  days  and  Owner  or  Management  Company,  as the  case may be,
immediately  proceeds with due diligence to cure such default,  then within such
additional  period of time as is reasonably  required for such cure, taking into
account the termination provisions of the License Agreement.

         G. The  failure of Owner to provide to  Management  Company  sufficient
Working Capital to operate the Hotel as required by Article VII and Section 9.05
within three (3) business days after written notice from  Management  Company of
the need for such Working Capital.

         H. The failure of Management  Company or Owner,  as the case may be, to
perform, keep or fulfill any of the other covenants, undertakings,  obligations,
or conditions set forth in this  Agreement,  and the continuance of such default
for a period  of thirty  (30) days  after  notice  of said  failure,  or if such
Default cannot be reasonably  cured within said 30-day time period,  the failure
of the defaulting  party to commence the cure of such Default within said 30-day
period  or  thereafter  the  failure  to  diligently   pursue  such  efforts  to
completion.

16.02    Event of Default

         Upon the occurrence of any Default by either party  (referred to as the
"defaulting  party")  under  Section  16.01  A, B, C or D,  such  Default  shall
immediately  and  automatically,  without  the  necessity  of any  notice to the
defaulting  party,  constitute an "Event of Default" under this Agreement.  Upon
the occurrence of any Default by a defaulting  party under Section 16.01 E, F, G
or H, such Default shall  constitute an "Event of Default"  under this Agreement
if the defaulting party fails to cure such Default within the respective cure or
payment period (as specified in the applicable  Paragraph)  after written notice
from the non-defaulting party specifying such Default and demanding such cure or
payment; provided, however, that if a Default under Section 16.01 H is such that
it cannot  reasonably be cured within said 30-day period,  an "Event of Default"
shall then occur if the  defaulting  party  fails to  commence  the cure of such
Default  within the specified  30-day  period or thereafter  fails to diligently
pursue such efforts to completion.

16.03    Remedies upon Event of Default





<PAGE>



         Upon the occurrence of an Event of Default,  the  non-defaulting  party
shall  have the  right to pursue  any one or more of the  following  courses  of
action:  (i) in the event of a material  breach by the  defaulting  party of its
obligations under this Agreement,  to terminate this Agreement by written notice
to  the  defaulting  party,  which  Termination  shall  be  effective  as of the
effective  date which is set forth in said notice  (provided that said effective
date shall be at least  thirty (30) days after the date of said  notice;  or, if
the  defaulting  party is the  employer of all or a  substantial  portion of the
employees  at the Hotel,  the 30-day  period shall be extended to such period of
time as may be necessary  under  applicable  law  pertaining to  termination  of
employment);  and (ii) to institute any and all proceedings  permitted by law or
equity, including,  without limitation,  actions for specific performance and/or
damages. Upon the occurrence of a Default by either party under Section 16.01 E,
the amount owed to the non-defaulting  party shall accrue interest,  at the rate
described  in Section  22.03,  from and after the date on which such payment was
originally due to the  non-defaulting  party. The rights granted hereunder shall
not be in substitution  for, but shall be in addition to, any and all rights and
remedies  available  to  the  non-defaulting   party  by  reason  of  applicable
provisions of law or equity.


                                  ARTICLE XVII
                    PROPRIETARY MARKS; INTELLECTUAL PROPERTY

         17.01    Proprietary Marks

         During the term of this Agreement,  the name "Crestline,"  whether used
alone or in connection with other another  word(s),  and all  proprietary  marks
(being all present and future trademarks, trade names, symbols, logos, insignia,
service marks, and the like) of Management Company or any one of its Affiliates,
whether or not registered  ("Proprietary  Marks") shall in all events remain the
exclusive property of Management Company and its Affiliates. Owner shall have no
right to use any Proprietary  Mark,  except during the term of this Agreement to
have  signage  installed  using any  Proprietary  Mark in  conformance  with the
specifications  provided by Management Company.  Upon Termination,  any use of a
Proprietary  Mark by Owner under this Agreement shall  immediately  cease.  Upon
Termination, Management Company shall have the option to purchase, at their then
book value, any items of the Hotel's Inventories and Fixed Asset Supplies as may
be marked with a  Proprietary  Mark.  In the event  Management  Company does not
exercise  such  option,  Owner  agrees  that it will use any such  items  not so
purchased exclusively in connection with Hotel until they are consumed.

17.02    Computer Software and Equipment

     All   "Software"   (meaning   all  computer   software   and   accompanying
documentation,  other than software which is commercially  available,  which are
used by Management Company





<PAGE>



in connection with the property  management  system,  any reservation system and
all future  electronic  systems  developed by Management  Company for use in the
Hotel) is and shall remain the exclusive  property of Management  Company or any
one of its Affiliates  (or the licensor of such  Software,  as the case may be),
and  Owner  shall  have  no  right  to  use,  or to  copy,  any  Software.  Upon
Termination,  Management  Company shall have the right to remove from the Hotel,
without compensation to Owner, all Software, and any computer equipment which is
utilized as part of a  centralized  property  management  system or is otherwise
considered  proprietary by Management  Company,  excepting any software which is
owned  by  Licensor.  If any of such  computer  equipment  is  owned  by  Owner,
Management Company shall reimburse Owner for previous expenditures made by Owner
for the  purchase  of such  equipment,  subject to a  reasonable  allowance  for
depreciation.

17.03    Intellectual Property

         All  "Intellectual   Property"   (meaning  all  Software  and  manuals,
brochures and  directives  issued by Management  Company to its employees at the
Hotel  regarding  procedures  and  techniques to be used in operating the Hotel)
shall at all times be proprietary to Management  Company or its Affiliates,  and
shall be the exclusive  property of Management  Company or its Affiliates.  Upon
Termination,  all  Intellectual  Property  shall be  removed  from the  Hotel by
Management Company, without compensation to Owner.


                                  ARTICLE XVIII
                              WAIVER AND INVALIDITY

18.01              Waiver

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


18.02             Partial Invalidity

         In the event  that any  portion  of this  Agreement  shall be  declared
invalid  by order,  decree  or  judgment  of a court,  this  Agreement  shall be
construed  as if such  portion  had not been  inserted  herein  except when such
construction  would operate as an undue hardship to Management  Company or Owner
or constitute a  substantial  deviation  from the general  intent and purpose of
said parties as reflected in this Agreement.





<PAGE>




                                   ARTICLE XIX
                                   ASSIGNMENT

19.01    Assignment by Management Company and Owner

         A. Management Company shall not assign this Agreement,  or delegate any
of its responsibilities  hereunder,  without the prior written consent of Owner;
provided,  however, that Management Company,  shall have the right, without such
consent,  to assign its  interest  in this  Agreement  to any of its  Affiliates
qualified to perform the obligations of Management  Company  hereunder,  and any
such Affiliate shall be deemed to be the Management Company for purposes of this
Agreement.

         B. Owner shall not assign  this  Agreement,  without the prior  written
consent of Management  Company;  provided,  however,  that Owner may assign this
Agreement upon notice to Management  Company to any  wholly-owned  subsidiary of
Owner but only if such  subsidiary owns one hundred percent (100%) of the Hotel;
and upon such assignment and assumption of this Agreement by the assignee, Owner
shall be relieved of all further liability or obligation hereunder.

         C.  Notwithstanding any provision contained in this Agreement,  (i) the
collateral  assignment  of this  Agreement by Owner as security for any Mortgage
securing a Qualified  Loan or (ii) the transfer of this  Agreement in connection
with a merger  or  consolidation  or a sale of all or  substantially  all of the
assets of either  party  (provided  that (x) if such  transfer is by Owner,  the
provisions of Article XX shall be complied  with, and (y) if such transfer is by
Management  Company,  such  transfer  is  being  done  as part  of a  merger  or
consolidation  or a sale  of  all or  substantially  all of the  business  which
consists of  Management  Company's  managed  hotels),  is permitted  without the
consent of the other party.

         D. If either party  consents to an assignment of this  Agreement by the
other,  no further  assignment  shall be made  without  the  express  consent in
writing of such party, unless such assignment may otherwise be made without such
consent pursuant to the terms of this Agreement.

         E. An assignment  (either  voluntarily or by operation of law) by Owner
of its interest in this Agreement  shall not relieve Owner from its  obligations
under this Agreement which accrued prior to the date of such  assignment;  Owner
shall  be  relieved  of  such  obligations  accruing  after  such  date,  if the
assignment complies with this Article XIX and if Management Company has received
an assumption agreement executed by the assignee.






<PAGE>




                                   ARTICLE XX
                            TERMINATION OF AGREEMENT

20.01    Sale of the Hotel - Assumption of Management Agreement
         A. Owner  shall not enter into any Sale of the Hotel to any  individual
or entity which does not have  sufficient  financial  resources and liquidity to
fulfill Owner's obligations under this Agreement.

         B. If Owner  receives a bona fide written offer to enter into a Sale of
the Hotel,  Owner  shall give  written  notice  thereof to  Management  Company,
stating  the name of the  prospective  purchaser  or tenant.  Such  notice  (the
"Seller's  Notice")  shall  include  appropriate  information  relating  to such
prospective  purchaser or tenant demonstrating  compliance with Section 20.01 A.
Concurrently  with the  finalization of such Sale of the Hotel, the purchaser or
tenant shall by appropriate  instrument  reasonably  satisfactory  to Management
Company,  assume all of Owner's obligations hereunder.  An executed copy of such
assumption  agreement shall be delivered to Management Company at the closing or
consummation  of  such  Sale  of the  Hotel.  If,  however,  Management  Company
reasonably  determines that a Sale of the Hotel to such prospective purchaser or
tenant would violate the provisions of Section 20.01 A, Management Company shall
so notify  Owner by no later than  thirty (30) days after  Management  Company's
receipt of Seller's Notice,  provided,  however, that any decision regarding any
such  prospective  purchaser or tenant  shall not be binding if the  information
furnished by Owner is inaccurate. If Owner enters into an agreement for the Sale
of the Hotel to a  purchaser  or  tenant  notwithstanding  Management  Company's
notice of  non-compliance,  Management Company shall have the right to terminate
this  Agreement by delivery of written  termination  notice to Owner not earlier
than thirty (30) days, nor more than one hundred twenty (120) days following the
date of the giving of such notice.  Management  Company  shall have the right to
change such  effective  date of  Termination  to  coincide  with the date of the
finalization  of  the  proposed  Sale  of the  Hotel.  At  Management  Company's
election,  said notice of Termination shall not be effective if such Sale of the
Hotel is not finalized. If such Termination by Management Company results from a
Default by Owner under Section 20.01 A, such Termination shall not relieve Owner
of liability to Management  Company for such Default.  If Owner fails to deliver
Seller's Notice to Management Company prior to any Sale of the Hotel, Management
Company  shall have the right,  at its option,  to  immediately  terminate  this
Agreement  upon thirty (30) days notice to Owner and Owner shall be deemed to be
in Default hereunder.

         C.       No Sale of the Hotel shall reduce or otherwise affect (a) the
current level of Working Capital or (b) any of the operating accounts maintained
by Management Company pursuant to this Agreement.  If, in connection with any
such Sale of the Hotel,





<PAGE>



the selling Owner intends to withdraw, for its own use, any of the cash deposits
described  in  the  preceding  sentence,  the  selling  Owner  must  obtain  the
contractual  obligation  of the buying  Owner to  replenish  those  deposits (in
identical  amounts)  simultaneously  with such withdrawal.  The selling Owner is
hereby  contractually  obligated  to  Management  Company  to  ensure  that such
replenishment in fact occurs. The obligations  described in this Section 20.01 C
shall survive the Sale of the Hotel and Termination of this Agreement.

20.02    Sale of the Hotel - Termination of Management Agreement

         The Owner may, by written notice to Management Company,  terminate this
Agreement  (i)  upon  any  bona  fide  sale  of the  Hotel  by the  Owner  to an
unaffiliated  third party (excluding a sale and leaseback by Owner) or (ii) upon
the  transfer  of the  management  and  operation  of the  Hotel  by Owner to an
Affiliate  of Owner,  upon the  payment to  Management  Company  of the  average
monthly Base  Management  Fee and  quarterly  Incentive  Fees paid to Management
Company during the twelve (12)  consecutive  months  immediately  preceding such
sale or transfer (or the average management fees earned by Management Company is
such sale or transfer is less than twelve months from the Effective  Date) times
one-half  the  number  of  months  remaining  in the  then  current  term of the
Agreement.  Such Termination shall be effective no earlier than ninety (90) days
following  Management Company's receipt of notice of Termination from Owner. Any
such notice shall contain sufficient information to permit Management Company to
comply with any required notices to Hotel employees under federal or state laws,
including,   without   limitation,   the  Workers   Adjustment   and  Retraining
Notification Act.

20.03  Termination without Cause

      The Owner may, by written  notice to Management  Company,  terminate  this
Agreement  without cause at any time following the first anniversary date of the
Effective  Date upon the  payment to  Management  Company of One  Hundred  Fifty
Thousand Dollars ($150,000.00) if such Termination occurs during the second year
of the Initial Term or Two Hundred Fifty Thousand Dollars  ($250,000.00) if such
Termination  occurs during any renewal term of this Agreement.  Such Termination
shall be  effective  no  earlier  than  ninety  (90) days  following  Management
Company's  receipt of notice of  Termination  from Owner.  Any such notice shall
contain  sufficient  information to permit Management Company to comply with any
required  notices to Hotel  employees  under  federal or state laws,  including,
without limitation, the Workers Adjustment and Retraining Notification Act.



20.04  Termination upon Demolition or Foreclosure

         A.   Owner may, by written notice to Management Company, terminate this





<PAGE>



Agreement  upon the  demolition of the Hotel,  such  Termination to be effective
upon the expiration of ninety (90) days following  Management  Company's receipt
of such notice from Owner. Any such notice shall contain sufficient  information
to permit  Management  Company  to comply  with any  required  notices  to Hotel
employees  under  federal or state  laws,  including,  without  limitation,  the
Workers Adjustment and Retraining Notification Act.

         B. Management  Company shall have the right to terminate this Agreement
(and pursue any remedies it may have  hereunder),  on thirty (30) days'  written
notice,  if title to or  possession of the Hotel is  transferred  by judicial or
administrative process (including,  without limitation, a foreclosure, or a sale
pursuant  to an  order of a  bankruptcy  court,  or a sale by a  court-appointed
receiver)  to an  individual  or entity  which  would not qualify as a permitted
transferee  under Section 20.01 A, regardless of whether or not such transfer is
the voluntary  action of the  transferring  Owner, or whether (under  applicable
law) the Owner is in fact the  transferor;  provided,  however,  that Management
Company  shall not have the right to so terminate  this  Agreement  based on the
assertion that a Qualified Lender fails to so qualify as a permitted  transferee
or Section 20.01 A.

20.05    Performance Termination

         Owner shall have the option to terminate  this  Agreement if in any one
(1) Fiscal Year Management  Company fails to (i) achieve at least ninety percent
(90%) of the  projected  Operating  Profit as specified  in the approved  Annual
Operating  Projection  for  the  applicable  Fiscal  Year  (provided,   however,
Management  Company  shall  have the  right to cure any such  failure  and avoid
Termination by paying to Owner, within sixty (60) days of written notice of such
performance  termination,  an amount equal to the difference  between the actual
Operating  Profit and 90% of said projected  Operating Profit for the applicable
Fiscal Year) and (ii) maintain at least ninety-five (95%) of the previous Fiscal
Year's "Yield Index  Percentage" for the Hotel's  competitive set as reported by
Smith Travel  Research (or similar  reporting  service in the event Smith Travel
Research reports are no longer available).


                                   ARTICLE XXI
                          MANAGEMENT COMPANY CONDITIONS

21.01    Conditions upon Management Company's Obligations

         The  obligations of Management  Company  hereunder shall be conditioned
upon the following:

         A.     Receipt of all licenses, permits, decrees, acts, orders or other
approvals necessary for the operation of the Hotel.






<PAGE>



         B.   The provision by Owner of the Working Capital described in Article
VII and Section 9.05.


                                  ARTICLE XXII
                                  MISCELLANEOUS

22.01    Right to Make Agreement

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

22.02             Agency

         The  relationship  of Owner  and  Management  Company  shall be that of
principal and agent.  Nothing  contained in this Agreement shall be construed to
create a  partnership  or joint  venture  between  them or their  successors  in
interest.  Neither  party shall borrow money in the name of or pledge the credit
of the other.

22.03    Failure to Perform

         If  Management  Company or Owner at any time fails to make any payments
as specified or required hereunder or fails to perform any other act required on
its part to be made or performed  hereunder without  limitation,  then the other
party after thirty (30) days' written  notice to the  defaulting  party may (but
shall not be obligated  to) pay any such  delinquent  amount or perform any such
other act on the  defaulting  party's part. Any sums thus paid and all costs and
expenses  incurred in  connection  with the making of such payment or the proper
performance of any such act, together with interest thereon at the lesser of (i)
the interest rate allowed by the applicable usury laws or (ii) at the Prime Rate
plus three percent  (3%),  from the date that such payment is made or such costs
and expenses  incurred,  shall constitute a liquidated  amount to be paid by the
defaulting party under this Agreement to the other party on demand.


22.04    Breach of Covenant

         Owner  and  Management  Company  and/or  their  respective   affiliated
companies  shall be  entitled,  in case of any breach of this  Agreement  by the



<PAGE>




other party or others claiming through it, to injunctive relief and to any other
right or remedy available at law.

22.05    Consents

         Except as herein  otherwise  provided,  whenever in this  Agreement the
consent or approval of Owner or Management Company is required,  such consent or
approval shall not be unreasonably withheld, conditioned or delayed.

22.06    Applicable Law

         This  Agreement  shall be construed  under and shall be governed by the
laws of the State where the Hotel is located.

22.07    Headings

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

22.08    Notices

         Notices,  statements  and other  communications  to be given  under the
terms of this  Agreement  shall be in  writing  and  delivered  by hand  against
receipt or sent by certified mail,  return receipt  requested,  or by nationally
recognized overnight courier:

                  To Owner:
                  --------
                  ENN Leasing Company I, L.L.C.
                  7700 Wolf River Blvd.
                  Germantown, TN  38138
                  Attn:  Corporate Secretary

                  with a copy to:
                  Hunton & Williams
                  951 E. Byrd Street
                  Riverfront Plaza, East Tower
                  Richmond, VA  23219-4074
                  Attn:  David C. Wright, Esq.








<PAGE>




                  To Management Company:
                  ---------------------
                  Crestline Hotels & Resorts, Inc.
                  6600 Rockledge Drive, 6th Floor
                  Bethesda, Maryland  20817
                  Attn:  General Counsel

                  with a copy to:
                  --------------
                  Crestline Hotels & Resorts, Inc.
                  6600 Rockledge Drive, 6th Floor
                  Bethesda, Maryland  20817
                  Attn:  Executive Vice President

or at such other address as from time to time  designated by the party receiving
the notice.  Any such notice which is properly mailed, as described above, shall
be deemed to have been served as of three (3) business days after said posting.

22.09    Environmental Matters

         A. For purposes of this Section 22.09,  "hazardous materials" means any
substance or material containing one or more of any of the following: "hazardous
material,"  "hazardous waste,"  "hazardous  substance,"  "regulated  substance,"
"petroleum,"  "pollutant,"  "contaminant,"  or  "asbestos,"  as such  terms  are
defined  in any  applicable  environmental  law,  in  such  concentration(s)  or
amount(s) as may impose clean-up,  removal,  monitoring or other  responsibility
under any applicable  environmental law, or which may present a significant risk
of harm to guests, invitees or employees of the Hotel.

         B. Regardless of whether or not a given hazardous material is permitted
on the Hotel premises under applicable  environmental  law,  Management  Company
shall only bring on the premises such  hazardous  materials as are needed in the
normal  course of business of the Hotel.  Management  Company  shall  indemnify,
defend  and hold  Owner and its  Affiliates  (and  their  respective  directors,
officers,  shareholders,  employees  and agents)  harmless  from and against all
loss, costs, liability and damage (including, without limitation, engineers' and
attorneys'  fees and  expenses,  and the cost of  litigation)  arising  from the
placing, discharge,  leakage, use or storage of hazardous materials in violation
of  applicable  environmental  laws on the  Hotel  premises  or in the  Hotel by
Management Company during the term of this Agreement.

         C. In the event of the  discovery of hazardous  materials (as such term
may be defined in any applicable  environmental law) on the Hotel premises or in
the Hotel during the term of this  Agreement,  Owner shall (except to the extent
such removal is Management Company's responsibility pursuant to Section 22.09 B)
promptly remove, if required by





<PAGE>



applicable  environmental  law,  such  hazardous  materials,  together  with all
contaminated  soil and  containers,  and shall  otherwise  remedy the problem in
accordance with all  environmental  laws. Owner shall (except to the extent that
the removal of such hazardous materials is Management  Company's  responsibility
pursuant to Section 22.09 B) indemnify,  defend and hold Management  Company and
its  Affiliates  (and  their  respective  directors,   officers,   shareholders,
employees and agents) harmless from and against all loss,  costs,  liability and
damage  (including,  without  limitation,  engineers'  and  attorneys'  fees and
expenses,  and the cost of  litigation)  arising  from the presence of hazardous
materials on the Hotel  premises or in the Hotel.  All costs and expenses of the
removal  of  hazardous  materials  pursuant  to this  Section  22.09  C,  and of
compliance  with all  environmental  laws,  and any amounts  paid to  Management
Company  pursuant to the indemnity set forth above,  shall be paid by Owner from
its own funds, not as a Deduction.

22.10    Equity and Debt Offerings

         Neither Owner nor Management Company (as an "issuing party") shall make
reference to the other party (the  "non-issuing  party) or any of its Affiliates
in any prospectus,  private placement memorandum,  offering circular or offering
documentation  related thereto  (collectively  referred to as the "Prospectus"),
issued by the issuing party, unless the non-issuing party has received a copy of
all such references.  In no event will the non-issuing party be deemed a sponsor
of the  offering  described  in any  such  Prospectus,  nor  will  it  have  any
responsibility for the Prospectus, and the Prospectus will so state. The issuing
party shall be entitled to include in the Prospectus an accurate summary of this
Agreement but shall not include any proprietary  mark of the  non-issuing  party
without prior written consent of the non-issuing  party. The issuing party shall
indemnify,  defend and hold the non-issuing  party and its Affiliates (and their
respective  directors,  officers,  shareholders,  employees and agents) harmless
from and against all loss,  costs,  liability and damage  (including  attorneys'
fees and expenses,  and the cost of litigation) arising out of any Prospectus or
the offering described therein.

22.11    Estoppel Certificates

         Owner and  Management  Company  will, at any time and from time to time
within  fifteen  (15)  days of the  request  of the other  party or a  Qualified
Lender, execute,  acknowledge, and deliver to the other party and such Qualified
Lender, if any, a certificate certifying:

         A.        That the Agreement is unmodified and in full force and effect
(or, if there have been modifications, that the same is in full force and effect
as modified and stating such modifications);

         B.    The dates, if any, to which the distributions of Operating Profit
have been paid;





<PAGE>




         C.    Whether there are any existing Defaults by the other party to the
knowledge of the party making such certification, and specifying the nature of
such Defaults, if any; and

         D.       Such other matters as may be reasonably requested.  Any such
certificates may be relied upon by any party to whom the certificate is
directed.

22.12    Counterparts

         This Agreement may be executed in multiple counterparts,  each of which
is an original and all of which collectively constitute one instrument.

22.13  Entire Agreement

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

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers.


ATTEST:                                   OWNER:
                                          ENN LEASING COMPANY I, L.L.C.

                                          By:
---------------------------                      -------------------------------
Assistant Secretary                       Title:
                                                 -------------------------------




ATTEST:                                   MANAGEMENT COMPANY:
                                          CRESTLINE HOTELS & RESORTS, INC.


                                          By:
---------------------------                      -------------------------------
Assistant Secretary                       Title:
                                                 -------------------------------







<PAGE>










                                    Exhibit A

                         Legal Description of Hotel Site






</TEXT>
</DOCUMENT>
