AMENDED AND RESTATED EMPLOYMENT AGREEMENT

(a)

Base Salary. Until the termination of the Employee’s employment hereunder, the Employer will pay the Employee, bi-weekly in arrears, a base salary (the “Base Salary”) established by the Compensation Committee of Employer’s Board of Directors which Base Salary will be reviewed by the Employer annually. The Employee’s Base Salary as of the date of this Agreement shall be $11,250 per month, resulting in Base Salary of $135,000 per year.

(b)

Bonus. The Employer will consider the Employee for cash bonuses on an annual basis. Any such bonus will be based on the recommendation of Employer’s Compensation Committee of the board of directors.

(c)

Stock Options. Pursuant to the Employer’s Stock Plan, the Employer will consider the Employee for option grants and other equity awards on an annual basis. Any such grants will be made in the sole discretion of Employer’s Compensation Committee of the Board of Directors.

(d)

Vacation. The Employee will be entitled to 4 weeks of paid vacation per year at the reasonable and mutual convenience of the Employer and the Employee. Accrued vacation not taken in any calendar year will not be carried forward or used in any

(a)

Termination For Cause. Employer may terminate Employee’s employment for Cause (as defined below) immediately upon written notice to the Employee.

(b)

Termination Without Cause. The Employer may terminate Employee’s employment at any time without Cause in its sole discretion, upon 30 days written notice to Employee.

(c)

Death or Disability. Employee’s employment will terminate upon the death of the Employee and, at the option of the Employer, in the event of the Employee’s disability, upon 30 days written notice to the Employee. The Employee will be deemed disabled if he is unable to perform his duties hereunder for a period of sixty consecutive days on account of injury or sickness. Any refusal by the Employee to submit to a medical examination for the purpose of certifying disability under this Section 6(c) will be deemed conclusively to constitute evidence of the Employee’s disability.

(d)

Payments Upon Termination Prior to Change of Control or Upon Death or Disability. If Employee’s employment is terminated prior to a Change in Control (as defined below), or upon death or disability pursuant to Section 6(c), the Employee will not be entitled to any compensation upon termination, except for (i) any portion of his Base Salary for the month of termination accrued but unpaid to the end of the month of termination, (ii) to the extent not taken, the unused portion of his annual vacation to the date of termination, and (iii) expense reimbursements under Section 5 hereof for expenses incurred in the performance of his duties hereunder prior to termination.

(e)

Payments Upon Termination Following Change in Control. If during the one year immediately following a Change in Control, the Employee’s employment with the Employer is terminated without Cause or is terminated by the Employee for Good Reason (as defined below), Employer shall pay Employee, for twelve months, an amount equal to the greater of Employee’s Base Salary as in effect (i) at the time of termination or (ii) immediately prior to the Change in Control. Such payments shall be paid at the times Employee would have been paid Base Salary had the employment not been terminated.

(f)

Additional Matters. Employee accepts the payments as specified herein as full satisfaction of all amounts owed to Employee by Employer pursuant to this Agreement in the event of Employee’s termination. Upon termination of Employee’s employment for any reason:

(i)

The vesting, exercise and all of the terms of any equity awards and stock options held by Employee at termination shall be governed by the plans

(ii)

All other rights of Employee under any other compensatory or benefit plan shall be governed by such plan.

(g)

Section 6 Definitions. For purposes of this Agreement, a termination will be for Cause if:

(i)

the Employee commits an unlawful or criminal act (A) involving moral turpitude or (B) resulting in a financial loss to Employer; or

(ii)

the Employee (A) fails to obey written directions delivered to Employee by the Employer’s Board of Directors or Chief Executive Officer, or (B) commits a material breach of any of the covenants, terms and provisions hereof, and in either case such failure or breach continues for more than three days after receipt by the Employee of written notice of such failure or breach.

(iii)

The acquisition (other than from the Employer) by any person, entity or “group”, within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities and Exchange Act of 1934, as amended (the “Act”), (excluding any acquisition or holding by (i) the Employer or its subsidiaries or (ii) any employee benefit plan of the Employer or its subsidiaries which acquires beneficial ownership of voting securities of the Employer) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Act) of 50% or more of either the then outstanding shares of common stock or the combined voting power of the Employer’s then outstanding voting securities entitled to vote generally in the election of directors; or

(iv)

Individuals who, as of the date hereof, constitute the Board of Directors of Employer (as of the date hereof the “Incumbent Board”) cease for any reason to constitute at least a majority of the Board, provided that any person becoming a director subsequent to the date hereof whose election, or nomination for the election by the Employer’s stockholders, was approved by a vote of at least a majority of the directors then comprising the Incumbent Board shall be, for purposes of this Plan, considered as though such person were a member of the Incumbent Board; or

(v)

Consummation of a reorganization, merger or consolidation, in each case, with respect to which persons who were the stockholders of the Employer immediately prior to such reorganization, merger or consolidation do not, immediately thereafter, own more than 50% of the combined voting power entitled to vote generally in the election of directors of the reorganized, merged or consolidated Employer’s then outstanding voting securities, or a liquidation or dissolution of the Employer or of the sale of all or substantially all of the assets of the Employer.

(i)

a material diminution in the Employee’s duties or responsibilities or any material demotion from the Employee’s current position with the Employer;

(ii)

a requirement that the Employee work principally from a location outside the 25 mile radius from the Employer’s headquarters address as of the date of this agreement, except for required travel on the Employer’s business to the extent substantially consistent with the Employee’s business travel obligations on the date hereof;

(iii)

a material reduction in the Employee’s Base Salary as in effect immediately prior to the Change in Control; or

(iv)

the failure of the Employer to obtain an agreement from any successor or assign of the Employer to assume and agree to adopt this Agreement for a period of at least one year from the Change in Control.

(a)

Notices. All notices and other communications hereunder will be in writing or by written telecommunication, and will be deemed to have been duly given if delivered personally or if mailed by certified mail, return receipt requested or by written telecommunication, to the relevant address set forth below, or to such other address as the recipient of such notice of communication will have specified to the other party hereto in accordance with this Section 9:

(b)

Equitable Remedies. Each of the parties hereto acknowledges and agrees that upon any breach by the Employee of his obligations under Section 7 and 8 hereof, the Employer will have no adequate remedy at law, and accordingly will be entitled to specific performance and other appropriate injunctive and equitable relief.

(c)

Severability. If any provision of this Agreement is or becomes invalid, illegal or unenforceable in any respect under any law, the validity, legality and enforceability of the remaining provisions hereof will not in any way be affected or impaired.

(d)

Waivers. No delay or omission by either party hereto in exercising any right, power or privilege hereunder will impair such right, power or privilege, nor will any single or partial exercise of any such right, power or privilege preclude any further exercise thereof or the exercise of any other right, power or privilege.

(f)

Assigns. This Agreement will be binding upon and inure to the benefit of the heirs and successors of each of the parties hereto.

(g)

Entire Agreement. This Agreement contains the entire understanding of the parties, supersedes all prior agreements and understandings relating to the subject matter hereof, including the Prior Agreement, and will not be amended except by a written instrument signed by each of the parties hereto.

(h)

Governing Law. This Agreement and the performance hereof will be construed and governed in accordance with the laws of the State of Nebraska.

(i)

Section 409A. Notwithstanding anything herein to the contrary, this Agreement is intended to be interpreted and operated to the extent possible so that the payments set forth herein either shall be exempt from the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (“Section 409A”) or shall comply with the requirements of such provision; provided however that in no event shall the Employer be liable to the Employee for or with respect to any taxes, penalties or interest which may be imposed upon the Employee pursuant to Section 409A. To the extent that any amount payable pursuant to this Agreement constitutes a “deferral of compensation” subject to Section 409A (a “409A Payment”), then, if on the date of the Employee’s “separation from service,” as such term is defined in Treas. Reg. Section 1.409A-1(h)(1), from the Employer (“Separation from Service”), the Employee is a “specified employee,” as such term is defined in Treas. Reg. Section 1.409-1(i), as determined from time to time by the Employer, then such 409A Payment shall not be made to the Employee earlier than the earlier of (i) six (6) months after the Employee’s Separation from Service; or (ii) the date of Employee’s death. The 409A Payment under this Agreement that would otherwise be made during such period shall be aggregated and paid in one lump sum, with interest (compounded monthly) at the prime rate reported by the Wall Street Journal on the date the payment otherwise would have been made, on the first business day following the end of the six (6) month period or following the date of the Employee’s death, whichever is earlier. The Employee hereby acknowledges that Employee has been advised to seek and has sought the advice of a tax advisor with respect to the tax consequences to the Employee of all payments pursuant to this Agreement, including any adverse tax consequences or penalty taxes under Section 409A and applicable federal and state tax law. Employee hereby agrees to bear the entire risk of any such adverse federal and state tax consequences and penalty taxes in the event any payment pursuant to this Agreement is deemed to be subject to Section 409A, and that no representations have been made to the Employee relating to the tax treatment of any payment pursuant to this Agreement under Section 409A and the corresponding provisions of any applicable state income tax laws. If payments under Section 6(c) constitute 409A Payment, references within Section 6(c) and this Section 9(i) to termination of employment or similar language shall mean Employee’s “separation from service” as defined in Treas. Reg. Section 1.409A-1(h), including the default presumptions thereunder. No 409A Payment payable under this Agreement shall be subject to acceleration or to any change in the specified time or method of payment, except as otherwise provided under this Agreement and consistent with Section 409A.

Supertel Hospitality, Inc.

/s/ David L. Walter

By:

/s/ Kelly A. Walters

Employee

Kelly A. Walters, President
and Chief Executive Officer