THIRD AMENDMENT TO MOTEL PURCHASE AGREEMENT


         THIS THIRD AMENDMENT is made effective as of this November 7, 2005, by
and between SUPERTEL LIMITED PARTNERSHIP ("Buyer") and INDEPENDENT PROPERTY
OPERATORS OF AMERICA, LLC ("Seller").

                                    RECITALS:

         WHEREAS, on September 12, 2005, Buyer and Seller entered into that
certain Motel Purchase Agreement ("Purchase Agreement");

         WHEREAS, on October 14, 2005, Buyer and Seller entered into that
certain Amendment to Motel Purchase Agreement and on October 31, 2005, Buyer and
Seller entered into that certain Second Amendment to Motel Purchase Agreement
which revised certain terms of the Purchase Agreement as more particularly set
forth therein; and

         WHEREAS, Buyer and Seller desire to further amend the Purchase
Agreement to provide for two separate closings and to provide for the assumption
of the GE South Bend Mortgage Documents (as hereinafter defined) applicable to
the South Bend, Indiana portion of the Property.



WITNESSETH:

Buyer and Seller hereby agree to amend the Purchase Agreement as follows:

         1. The Closing shall occur on two separate dates. The parties hereto
will close on the Fayetteville, North Carolina, Ft. Wayne, Indiana, Lafayette,
Indiana, Marion, Indiana and Warsaw, Indiana locations (the "1st Properties")
effective on November 7, 2005 (the "1st Closing Date"). $20,229,705.00 of the
purchase price set forth in Section 2 of the Purchase Agreement (as amended)
shall be allocated to the 1st Properties.

         The closing (the "2nd Closing") on the Comfort Suites in South Bend,
Indiana (the "South Bend Property") shall occur on November 30, 2005 (the "2nd
Closing Date"), or such earlier date as the parties may agree to. $12,080,000.00
of the purchase price set forth in Section 2 of the Purchase Agreement (as
amended) shall be allocated to the South Bend Property. The Deposit shall not be
credited to the Purchase Price unless and until the 2nd Closing occurs.

         2. The South Bend Property is encumbered by a mortgage (the "GE
Mortgage") dated May 30, 2002 in favor of GE Capital Franchise Finance
Corporation ("GE") securing a Balloon Promissory Note dated May 30, 2002 (the
"GE Note") in the original principal amount of $6,825,000. The GE Note, the GE
Mortgage and all other documents encumbering the South Bend Property and
securing the GE Note are collectively referred to as the "GE Financing
Documents." At Closing Buyer shall assume Seller's obligations under the GE
Financing Documents (arising from and after the 2nd Closing Date) and shall be
entitled to a credit against the Purchase Price in the amount of the then
principal balance of the GE Note. Interest due under the GE Note shall be
pro-rated as of the 2nd Closing Date and Seller shall be entitled to a credit in
the amount of any real estate tax, insurance and other escrows held under the GE
Financing Documents. All funds in such escrows shall be transferred to Buyer.
The assumption fee due and payable under the GE Financing Documents, together
with any other fees or costs charged by GE in connection with such assumption,
shall be paid by Seller at the 2nd Closing.

         3. Section 4(b) of the Purchase Agreement "Buyer's Obligations at
Closing" is amended to read as follows, but only with respect to the closing on
the South Bend Property:

               At Closing on the 2nd  Closing  Date,  Buyer  shall  perform  its
               obligations   hereunder  and  execute  and  deliver  any  closing
               documents required to be executed by Buyer and Buyer shall pay to
               Seller the purchase  price  allocated to the South Bend Property,
               as follows:

               (i)  Buyer shall  assume the  obligations  under the GE Financing
                    Documents  and  receive  a  credit  in  the  amount  of  the
                    principal balance of the GE Note.

               (ii) Buyer shall execute and deliver to Seller a promissory  note
                    in the principal  amount of  $3,000,000.00  (the "South Bend
                    Second Note"),  in form attached  hereto as Exhibit A, which
                    shall be due and payable 1 year after the 2nd Closing  Date,
                    shall  not bear  interest  until  maturity  and  shall  bear
                    interest  at the rate of ten  percent (10 %) per annum after
                    maturity.  The South Bend Second Note shall be guaranteed by
                    Supertel  Hospitality,  Inc., which guaranty shall be in the
                    form attached  hereto as Exhibit B. To the extent  permitted
                    under the GE Consent  (as  hereinafter  defined),  the South
                    Bend  Second Note shall also be secured by a mortgage on the
                    South Bend Property in form reasonably acceptable to Seller.
                    To the extent the GE Consent does not permit  execution  and
                    delivery of the South Bend  Second Note by Buyer,  the South
                    Bend Second Note shall be executed and delivered by Supertel
                    Hospitality, Inc.

               (iii) After crediting the Deposit,  the principal  balance of the
                    GE Note and the amount of the South Bend Second Note,  Buyer
                    shall pay the  balance of the  Purchase  Price by  cashier's
                    check or  certified  check or  other  immediately  available
                    funds and Escrow Agent shall deliver the Deposit to Seller.

         4. The following which must be satisfied or waived as of the 2nd
Closing Date is hereby added as subsection (i) under Section 18 A. "Conditions
Precedent to Buyer's Obligations":

                  (i) GE shall have issued its consent to the assumption of the
                  GE Financing Documents (collectively, the "GE Consent") in
                  form reasonably satisfactory to Buyer. The GE Consent shall
                  set forth the current principal balance due under the GE
                  Financing Documents.

         5. The following which must be satisfied or waived as of the Second
Closing Date is hereby added as the last paragraph under Section 18 B.
"Conditions Precedent to Seller's Obligations":

                  GE shall have issued the GE Consent and its consent to the
                  release of Seller under the GE South Bend Financing Documents
                  in form reasonably satisfactory to Seller.

6. The third paragraph of Section 2 of the Purchase Agreement is hereby deleted.

7. Supertel Hospitality, Inc. joins in the execution and delivery of this Third
Amendment to agree to the terms and provisions hereof.

8. Capitalized terms used herein without definition shall have the meanings
provided therefore in the Purchase Agreement unless the context otherwise
requires.

         IN WITNESS WHEREOF, the parties have executed this Third Amendment in
multiple counterparts, including facsimile counterpart, each of which shall be
deemed an original and all of which shall constitute one agreement, as of the
date first written above.


INDEPENDENT PROPERTY OPERATORS              SUPERTEL LIMITED PARTNERSHIP, a
  OF  AMERICA, LLC                            Virginia limited partnership

By:  Mills Management II, Inc.              By:  Supertel Hospitality REIT Trust
                                            Its:  General Partner


By:    /s/ Charles A. Mills, III
Title: President                            By:    /s/ Paul J. Schulte
                                            Title: President


                                            SUPERTEL HOSPITALITY, INC., a
                                              Virginia corporation

                                            By:    /s/ Paul J. Schulte
                                            Title: President