EMPLOYMENT AGREEMENT

                              EMPLOYMENT AGREEMENT

     Employment   Agreement,   dated   as of   September   1,   2005,   by and   between

Supertel   Hospitality,   Inc., a Virginia corporation with its principal place of

business   located   at   309   North   5th   Street,   Norfolk,   Nebraska   68701   (the

"Employer") and Don Heimes, an individual (the "Employee").

     WHEREAS,   the Employer and the Employee   desire to enter into an Employment

Agreement on the terms set forth below;

     NOW,   THEREFORE,   for   and in   consideration   of the   premises,   covenants,

conditions and   obligations   thereafter   set forth,   the parties hereto agree as

follows:

     Section 1.   Employment.   The Employer hereby employs the Employee,   and the

Employee hereby accepts employment, upon the terms and subject to the conditions

hereinafter set forth.

     Section 2.   Duties.   The Employee   will be employed as the Chief   Financial

Officer of the Employer, or such other positions to which he may be appointed by

the Board of Directors.   The Employee   will perform the duties   attendant to his

executive   position   with the Employer.   The Employee   agrees to devote his full

time and best   efforts to the   performance   of his duties to the   Employer.   The

Employee shall be permitted to   participate in charitable   activities and accept

positions on the boards of non-profit entities.

     Section 3. Term.   The initial term of employment of the Employee   hereunder

will   commence   on the date of this   Agreement   (the   "Commencement   Date")   and

continue until December 31, 2005, unless earlier terminated   pursuant to Section

6, and will be   automatically   renewed for successive   additional one year terms

thereafter   (commencing   January 1, 2006),   unless terminated by either party by

written notice to the other, given no fewer than 30 days prior to the expiration

of the then current term.

     Section 4. Compensation and Benefits.   In consideration for the services of

the Employee hereunder, the Employer will compensate the Employee as follows:

(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 $150,000 per annum.

(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 Option Plan (the "Plan"),

     the Employer   will   consider   the   Employee for option   grants 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 four weeks of paid vacation per

     year at the   reasonable   and mutual   convenience   of the   Employer   and the

     Employee.   Unless   otherwise   approved   by the   Board of   Directors   of the

     Employer,   accrued   vacation   not   taken in any   calendar   year will not be

     carried forward or used in any subsequent year.

     Section 5. Expenses.   The Employee,   in connection   with the services to be

performed   by him pursuant to the terms of this   Agreement,   will be required to

make payments for travel and similar   expenses.   The Employer will reimburse the

Employee for all   reasonable   expenses of types   authorized   by the Employer and

incurred   by the   Employee   in the   performance   of his   duties   hereunder.   The

Employee   will comply with such budget   limitations   and approval and   reporting

requirements with respect to expenses as the Employer may establish from time to

time.

     Section 6. Termination.   The Employee's   employment hereunder will commence

on the   Commencement   Date and continue   until the end of the term   specified in

Section 3 hereof and any renewals of such term,   except that the   employment   of

the Employee hereunder will sooner terminate in the following manner:

(a)   Death or Disability.   Upon the death of the Employee during the term of his

     employment hereunder or, at the option of the Employer, in the event of the

     Employee's   disability,   upon 30 days' 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(a)   will   be   deemed

     conclusively to constitute evidence of the Employee's disability.

(b)   For Cause.   For "Cause"   immediately upon written notice by the Employer to

     the Employee.   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 Employ