Exhibit 6(ii)

Location: BATON ROUGE, LA       Entity No.: Unit No.: 11730


                        VILLAGER FRANCHISE SYSTEMS, INC.
                               FRANCHISE AGREEMENT


         THIS FRANCHISE AGREEMENT  ("Agreement"),  dated July 9, 1999 is between
VILLAGER FRANCHISE SYSTEMS, INC., a Delaware  corporation("we",  "our" or "us"),
and, GOLDEN OPPORTUNITY  DEVELOPMENT,  a corporation ("you"). The definitions of
capitalized  terms are found in Appendix A. In  consideration  of the  following
mutual promises, the parties agree as follows:

1.  License.  We have the  exclusive  right to license and  franchise to you the
distinctive "Villager Lodge" System for providing economy, extended stay lodging
services.  We grant to you and you accept the License,  effective and commencing
on the Opening Date and ending on the earliest to occur of the Term's expiration
or a  Termination.  The License is effective only at the Location and may not be
transferred or relocated. You will call the Facility a "Villager Lodge." You may
adopt  additional  or secondary  designations  for the  Facility  with our prior
written consent, which we may withhold, condition, or withdraw on written notice
in our sole discretion.

2. Protected  Territory.  We will not own,  operate,  lease,  manage, or license
anyone but you to operate a Chain Facility of the same name (Villager  Lodge) in
the  "Protected  Territory",  defined in Appendix A, while this  Agreement is in
effect.  We may own,  operate,  lease,  manage,  franchise or license  anyone to
operate any Chain  Facility  located  anywhere  outside the Protected  Territory
without any restriction or obligation to you. We may grant protected Territories
for other Chain Facilities that overlap your Protected  Territory.  You will use
any  information  obtained  through  the  Reservation  System  to refer  guests,
directly or indirectly, only to Chain Facilities. This Section does not apply to
any Chain  Facility  located in the Protected  Territory on the Effective  Date,
which we may renew,  relicense,  allow to expand,  or replace with a replacement
Facility  located  within the same trading area having not more than 120% of the
guest rooms of the replaced  Chain  Facility if its franchise with us terminated
or is not renewed.  The Protected  Territory  fairly  represents  the Facility's
trading  area,  and you  acknowledge  that.  There  are no  express  or  implied
territorial  rights or agreements  between the parties  except as stated in this
Section.  The  covenants in this Section are mutually  dependent;  if you breach
this Section, your Protected Territory will be the Location only.

3. Your  Improvement  and Operating  Obligations.  Your  obligations to improve,
operate and maintain the Facility are:

3.1  Improvements.  You must select and acquire the Location and acquire,  equip
and supply the Facility in accordance with System Standards. You must provide us


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with proof that you own or lease the Facility before or within 30 days after the
Effective  Date. You must begin  renovation of the Facility no later than thirty
(30) days after the Effective  Date. The deadline for completing the pre-opening
phase of conversion and renovation, when the Facility must attain a satisfactory
preopening score under our quality  assurance  inspection system and be ready to
open for  business  under the System,  is ninety  (90) days after the  Effective
Date. All renovations will comply with System Standards,  the Approved Plans and
any Punch List attached to this Agreement.  Your general  contractor or you must
carry the insurance  required under this Agreement during  renovation.  You must
complete the pre-opening renovation specified on the Punch List and the Facility
must pass its pre-opening  quality  assurance  inspection before we consider the
Facility to be ready to open under the System. You must continue  renovation and
improvement of the Facility after the Opening Date as the Punch List requires so
that the  Facility  attains a  satisfactory  score on its  post-opening  quality
assurance  inspection  given within nine (9) months after the Opening  Date.  We
may, in our sole  discretion,  terminate this Agreement by giving written notice
to you  (subject to  applicable  law) if (1) you do not commence or complete the
pre-opening or post- opening improvements of the Facility by the dates specified
in this  Section,  or (2)  you  prematurely  identify  the  Facility  as a Chain
Facility or begin  operation  under the System name  described  in Schedule B in
violation  of  Section  3.3 and you  fail to  either  complete  the  pre-opening
Improvement  Obligation or cease operating and/or identifying the Facility under
the Marks  and  System  within  five days  after we send you  written  notice of
default. Time is of the essence for the Improvement Obligation. We may, however,
in our sole  discretion,  grant one or more  extensions  of time to perform  any
phase of the Improvement Obligation.  You will pay us a non-refundable extension
fee of  $1.50  per  room  for each  day of any  extension  of the  deadline  for
completing pre-opening  improvements.  This fee will be payable to us after each
30 days of the  extension.  You will pay us the  balance  of the  extension  fee
outstanding  when the Facility  opens under the System 10 days after the Opening
Date. The grant of an extension will not waive any other default existing at the
time the extension is granted.

3.2 Improvement  Plans.  You will create plans and  specifications  for the work
described in Section 3.1 (based upon the System Standards and this Agreement) if
we so request and submit them for our approval  before  starting  improvement of
the Location. We will not unreasonably withhold or delay our approval,  which is
intended only to test compliance with System Standards, and not to detect errors
or omissions in the work of your architects, engineers, contractors or the like.
Our review does not cover technical,  architectural or engineering  factors,  or
compliance with federal,  state or local laws, regulations or code requirements.
We will not be liable to your lenders,  contractors,  employees, guests, others,
or you on  account  of our  review  or  approval  of  your  plans,  drawings  or
specifications,  or our  inspection  of the  Facility  before,  during  or after
renovation  or  construction.  Any material  variation  from the Approved  Plans
requires our prior written approval. You will promptly provide us with copies of
permits,  job  progress  reports,  and other  information  as we may  reasonably
request. We may inspect the work while in progress without prior notice.

3.3 Pre-Opening.  You may identify the Facility as a Chain Facility prior to the
Opening Date, or commence  operation of the Facility  under a Mark and using the
System,  only after  first  obtaining  our  approval or as  permitted  under and
strictly in accordance  with the System  Standards  Manual.  If you identify the


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Facility as a Chain  Facility or operate  the  Facility  under a Mark before the
Opening  Date  without  our  express  written  consent,  then in addition to our
remedies  under Sections 3.1 and 1 1.2, you will begin paying the Royalty to us,
as specified in Section 7. 1, from the date you identify or operate the Facility
using the Mark. We may delay the Opening Date until you pay the Royalty accruing
under this Section.

3.4 Operation. You will operate and maintain the Facility continuously after the
Opening Date on a  year-round  basis as required by System  Standards  and offer
extended  stay  lodging and other  services  of the  Facility  (including  those
specified  on  Schedule B) to the public in  compliance  with the law and System
Standards.  You will keep the Facility in a clean, neat, and sanitary condition.
You will clean, repair, replace, renovate,  refurbish, paint, and redecorate the
Facility  and its FF&E as and when needed to comply with System  Standards.  The
Facility  will  accept  payment  from  guests by all credit  and debit  cards we
designate in the System  Standards  Manual.  You may add to or  discontinue  the
amenities,  services  and  facilities  described  in  Schedule  B, or  lease  or
subcontract any service or portion of the Facility,  only with our prior written
consent  which we will not  unreasonably  withhold  or delay.  Your  front  desk
operation,  telephone system, parking lot, swimming pool and other guest service
facilities  may not be  shared  with or used by  guests of  another  lodging  or
housing facility.

3.5 Training.  The Facility's  general manager will attend the training  program
described in Section

4.1. You will train or cause the training of all Facility  personnel as and when
required by System  Standards and this Agreement.  You will pay for all tuition,
travel,  lodging,  meals and  compensation  expenses  of the people you send for
training  programs,  other  reasonable  charges we may impose for training under
Section 4. 1, and all travel,  lodging,  meal and facility and equipment  rental
expenses of our representatives for training provided at the Facility.

3.6 Marketing. (a) You will participate in System marketing programs,  including
the  Directory  and the  Reservation  System.  You will obtain and  maintain the
computer and  communications  service and equipment we specify to participate in
the  Reservation  System.  You will  comply  with our  rules and  standards  for
participation,  and will honor reservations and commitments to guests and travel
industry participants.  You may implement,  at your option and expense, your own
local advertising.  Your advertising materials must use the Marks correctly, and
must  comply  with  System  Standards  or be  approved in writing by us prior to
publication.  You will stop using any  non-conforming,  out-dated or  misleading
advertising materials if we so request.

         (b) You must place  daily  classified  advertisements,  meeting  System
Standards,  in the largest circulation daily newspaper serving the hotel trading
area for your  Facility.  You must perform all other  advertising  and marketing
activities that we require on a Chain-wide basis.

3.7  Governmental  Matters.  You will obtain as and when needed all governmental
permits, licenses and consents required by law to construct,  acquire, renovate,
operate and maintain  the  Facility  and to offer all services you  advertise or
promote. You will pay when due or properly contest all federal,  state and local
payroll,  withholding,  unemployment,  beverage,  permit, license,  property, ad
valorem and other taxes, assessments, fees, charges, penalties and interest, and
will file when due all governmental returns, notices and other filings.

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3.8  Inspections  and  Audits.  You will permit our  representatives  to perform
quality  assurance  inspections  of the  Facility and audit your  financial  and
operating books and records (including tax returns)  particularly those relating
to the Facility and any related business, with or without prior



notice of the  inspection  or audit.  The  inspections  and audits will commence
during normal business  hours,  although we may observe  Facility  operation and
accounting  activity at any time.  You, the Facility staff and your other agents
and employees will cooperate with our inspectors and auditors in the performance
of their  duties.  You will pay us any  underpayment  of, and we will pay you or
credit your  Recurring  Fee  account  for any  overpayment  of,  Recurring  Fees
discovered by the audit. If the Facility does not pass an inspection, you refuse
to cooperate  with our  inspectors or our auditors when they arrive for an audit
at a time  scheduled  at least 3 business  days in advance or the audit  reveals
that you paid us less than 97% of the  correct  amount of  Recurring  Fees for a
fiscal year or longer,  you will pay us the Audit Fee  described in Section 4.8,
or the reasonable  costs of travel,  lodging and meal expenses for  reinspection
and any reinspection  fee we may impose.  We may publish or disclose the results
of quality assurance inspections.

3.9 Reports and  Accounting.  You will prepare and submit timely monthly reports
containing the  information we require about the Facility's  performance  during
the preceding  month.  You will prepare and submit other reports and information
about the  Facility  as we may  reasonably  request  from time to time or in the
System  Standards  Manual.  You will prepare and  maintain any reports  required
under the System  Standards  Manual in the  Facility's  property  management  or
reservation computer system,  including the name and address of Facility guests,
if  collected,  and send  them to us or allow  us to  access  them by means of a
telephone  datalink.  You will allow us access to the reports and data stored on
the Facility's property management or reservation computer system via telephone,
provided that we will not unreasonably  interfere with normal functioning of the
property management or reservation computer system. You will maintain accounting
books and records in accordance with generally  accepted  accounting  principles
and the  American  Hotel & Motel  Association  Uniform  System of  Accounts  for
Hotels,  as amended,  subject to this Agreement and other reasonable  accounting
standards we may specify from time to time. You will prepare and submit to us if
we so  request  your  annual and  semi-annual  financial  statements.  We do not
require that your financial  statements be independently  audited,  but you will
send us a copy of your  audited  statements  if you have them audited and we ask
for them.

3.10  Insurance.  You will obtain and maintain during the Term of this Agreement
the insurance  coverage required under the System Standards Manual from insurers
meeting  the  standards  established  in the  Manual.  Unless  we  instruct  you
otherwise,  your  liability  insurance  policies  will name  Villager  Franchise
Systems,  Inc.,  Cendant  Finance Holding  Corporation and Cendant  Corporation,
their successors and assigns as additional insureds.

3.11    Conferences.  You or your representative will attend each annual Chain

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conference and pay the Conference Fee we set for the Chain  franchisees,  if and
when we determine to hold an annual Chain  conference.  The Fee will be the same
for all Chain Facilities that we license in the United States.  You will receive
reasonable notice of a Chain conference.

3.12  Purchasing.  You will  purchase or obtain  certain  items we  designate as
proprietary or that bear Marks, such as signage, only from suppliers we approve.
You may purchase any other items for the Facility from any competent  source you
select, so long as the items meet or exceed System Standards.

3.13 Good Will. You will use reasonable efforts to protect, maintain and promote
the name "Villager Lodge" and its distinguishing characteristics,  and the other
Marks.  You will not  permit  or allow  your  officers,  directors,  principals,
employees,  representatives,  or guests of the  Facility  to engage in,  conduct
which is unlawful  or damaging to the good will or public  image of the Chain or
System.  You will  participate  in  Chain-wide  guest  service and  satisfaction
guaranty  programs we require in good faith for all Chain  Facilities.  You will
follow System Standards for  identification of the Facility and for you to avoid
confusion on the part of guests, creditors, lenders, investors and the public as
to your  ownership  and  operation  of the  Facility,  and the  identity of your
owners.

3.14 Facility  Modifications.  You may materially modify, diminish or expand the
Facility (or change its interior design, layout, FF&E, or facilities) only after
you receive our prior written consent,  which we will not unreasonably  withhold
or delay. You will pay our Rooms Addition Fee then in effect for each guest room
you add to the  Facility.  If we so request,  you will obtain our prior  written
approval of the plans and specifications for any material modification, which we
will not  unreasonably  withhold  or delay.  You will not open to the public any
material modification until we inspect it for compliance with the Approved Plans
and System Standards.

3.15  Courtesy  Lodging.  You  will  provide  lodging  at  the  "Employee  Rate"
established  in the System  Standards  Manual from time to time (but only to the
extent that adequate room vacancies exist) to our  representatives  traveling on
business, but not more than three standard guest rooms at the same time.

3.16 Minor  Renovations.  Beginning  three years after the Opening  Date, we may
issue a "Minor Renovation Notice" to you that will specify  reasonable  Facility
upgrading and renovation  requirements (a "Minor Renovation") to be commenced no
sooner  than 60 days after the notice is issued,  having an  aggregate  cost for
labor,  FF&E  and  materials  estimated  by us to be not  more  than  the  Minor
Renovation  Ceiling Amount.  You will perform the Minor  Renovations as and when
the Minor  Renovation  Notice  requires.  We will not  issue a Minor  Renovation
Notice within three years after the date of a prior Minor Renovation  Notice, or
if the three most recent  quality  assurance  inspection  scores of the Facility
averaged at least 425 points or equivalent and the most recent quality assurance
inspection score for the Facility was at least 400 points or equivalent when the
Facility is otherwise eligible for a Minor Renovation.

4. Our Operating and Service Obligations. We will provide you with the following
services and assistance:

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4.1     Training.

4.1.1 Management  Training.  Between 30 days prior to the projected Opening Date
and 120 days  afterwards,  we will offer at a location  in the United  States we
designate  and your  general  manager  must  complete a training  program to our
satisfaction. The training program will not exceed ten days in duration and will
cover such topics as System Standards, services available from us, and operating
a Chain  Facility.  Any  replacement  or  supplemental  general  manager  of the
Facility  must  complete the  management  training  program to our  satisfaction
within 120 days after assuming his responsibilities.  Attendance is optional for
other members of your staff. We charge you tuition of $250 for each trainee. You
must also pay for your trainee's travel,  lodging,  meals,  incidental expenses,
compensation and benefits.

4.1.2 New  Property  On-Site  Training.  We will  provide at the Facility a "New
Property  On-Site  Training  Program"  (at  our  discretion  as  to  length  and
scheduling)  to assist you in opening the Facility.  There is no tuition for the
Program. However, we reserve the right to charge you for the reasonable expenses
for travel, room, board and other out-of-pocket costs of our representatives.

4.1.3 Recurrent  Training.  We may provide  additional  training for you and the
Facility's  general manager if we determine that additional  mandatory  training
for franchisees and general  managers is necessary in the future.  Training will
be held in our  corporate  office  or  other  locations.  You  will pay for your
representative's  travel, lodging, meals, incidental expenses,  compensation and
benefits for this training directly or through an ancillary services fee to us.

4.1.4  Supplemental  Training.  We may  offer  mandatory  or  optional  training
programs without charge or for tuition. We may offer or sell to you video tapes,
computer discs or other training aids and materials,  or require you to buy them
at reasonable prices.

4.1.5 A portion of the Advertising  and Reservation Fee proceeds,  determined in
our sole  discretion,  will be allocated to our training  activities and related
direct and indirect overhead expenses.

4.2  Reservation   System.  We  will  operate  and  maintain   (directly  or  by
subcontracting  with an affiliate or one or more third  parties) a  computerized
Reservation System or such technological  substitute(s) as we determine,  in our
discretion.  The Facility will participate in the Reservation System, commencing
with the Opening Date for the balance of the Term.  We have the right to provide
reservation  services to lodging  facilities  other than Chain  Facilities or to
other  parties.  We will not offer  callers to our  general  consumer  toll free
reservation  telephone  number in the  United  States  the  opportunity  to make
reservations for other lodging chains.

4.3   Marketing.

4.3.1 We will use  Marketing  Fees as specified in Schedule C,  allocated in our
discretion,  to  promote  public  awareness  and  usage of Chain  Facilities  by
implementing  advertising,  promotion,  publicity,  market  research  and  other

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marketing  programs,  for  training  programs  and related  activities,  for the
production and distribution of Chain publications and directories of hotels, and
for the acquisition,  development, support, equipping, maintenance,  improvement
and operation of the  Reservation  System.  We will determine in our discretion:
(i) The nature and type of media  placement;  (ii) The allocation (if any) among
international,  national,  regional and local markets;  and (iii) The nature and
type of advertising  copy, other materials and programs.  We or an affiliate may
be reimbursed from Marketing Fees for the reasonable  direct and indirect costs,
overhead or other expenses of providing marketing services. We are not obligated
to supplement the Marketing Fees or to advance funds to pay for System marketing
activities.  We do not promise that the Facility or you will benefit directly or
proportionately from System marketing activities.

4.3.2 We may, at our  discretion,  implement  special  international,  national,
regional  or  local  promotional  programs  (which  may or may not  include  the
Facility)  and  may  make  available  to you  (to  use  at  your  option)  media
advertising copy and other marketing materials for prices which reasonably cover
the materials' direct and indirect costs.

4.3.3 We will use the System Assessment Fees to publish the Chain Directory.  We
will  include the Facility in the Chain  Directory  after it opens if you submit
the  information  we  request  on time,  and you are not in  default  under this
Agreement  at  the  time  we  must  arrange  for  publication.  We  will  supply
Directories  to you for display at locations  specified in the System  Standards
Manual or policy  statements.  We may  assess  you a  reasonable  charge for the
direct and indirect  expenses  (including  overhead) of producing and delivering
the Directories.

4.4 Purchasing.  We may offer optional  assistance to you with purchasing  items
used at or in the Facility.  Our affiliates may offer this service on our behalf
We may restrict the vendors authorized to sell proprietary or Mark-bearing items
in order to control  quality,  provide for  consistent  service or obtain volume
discounts.  We will  maintain and provide to you lists of suppliers  approved to
furnish Mark-bearing items, or whose products conform to System Standards.

4.5 The System.  We will control and establish  requirements  for all aspects of
the System. We may, in our discretion, change, delete from or add to the System,
including any of the Marks or System  Standards,  in response to changing market
conditions. We may, in our discretion,  permit deviations from System Standards,
based on local conditions and our assessment of the circumstances.

4.6  Consultations  and Standards  Compliance.  We will assist you to understand
your  obligations  under System  Standards by telephone,  mail,  during  quality
assurance inspections, through the System Standards Manual, at training sessions
and during  conferences and meetings we conduct.  We will provide  telephone and
mail   consultation   on   Facility   operation   and   marketing   through  our
representatives.

4.7 System  Standards  Manual and Other  Publications.  We will  specify  System
Standards  in  the  System  Standards   Manual,   policy   statements  or  other
publications.  We will lend you one copy of the System Standards Manual promptly

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after we sign this  Agreement.  We will  send you any  System  Standards  Manual
revisions  and/or  supplements  as and when  issued.  We will send you all other
publications for Chain  franchisees and all separate policy statements in effect
from time to time.

4.8 Inspections and Audits.  We have the unlimited right to conduct  unannounced
quality  assurance  inspections of the Facility and its operations,  records and
Mark usage to test the  Facility's  compliance  with System  Standards  and this
Agreement,  and the audits described in Section 3.8. We have the unlimited right
to  reinspect  if the  Facility  does  not  achieve  the  score  required  on an
inspection.  We may impose a reinspection  fee and will charge you for our costs
as provided in Section  3.8.  You will pay us an "Audit Fee" of $300.00  when we
invoice you for an Audit Fee under Section 3.8. We may increase the Audit Fee on
a  Chain-wide  basis to cover any  increases in our audit costs to not more than
$500.00,  effective any time after December 31, 2005. Our inspections are solely
for the purposes of checking compliance with System Standards.

5. Term.  The Tenn begins on the Effective  Date and expires on the day prior to
the  fifteenth  anniversary  of the  Opening  Date.  Some  of  your  duties  and
obligations will survive  termination or expiration of this Agreement.  You will
execute  and  deliver  to us with this  Agreement  a  notarized  Declaration  of
Franchise  Agreement in recordable form. We will countersign and return one copy
of the Declaration to you. We may, at our option,  record the Declaration in the
real  property  records  of the  county  where  the  Facility  is  located.  The
Declaration  will be released at your  request and expense  when this  Agreement
terminates or expires and you perform your post-termination obligations.
NEITHER PARTY HAS RENEWAL RIGHTS OR OPTIONS.

6.  Application  and Initial Fees. We should  receive from you a  non-refundable
Application Fee of $1,000.00 which will be credited towards the Initial Fee. You
will pay us a non-refundable Initial Fee in the amount of $10,200.00;  $5,100.00
when you sign this  Agreement and $5,100.00 as per the Initial Fee Note attached
hereto,
which is fully earned when we sign this Agreement.

7.       Recurring Fees, Taxes and Interest.

7.1 You will pay us certain  "Recurring  Fees" payable in U.S.  dollars (or such
other  currency as we may direct if the  Facility is outside the United  States)
ten days  after the month in which  they  accrue,  without  billing  or  demand.
Recurring Fees include the following:

7.1.1 A  "Royalty"  equal to five  percent  (5%) of Gross Room  Revenues  of the
Facility  accruing  during the calendar  month,  accrues from the earlier of the
Opening  Date or the date you  identify  the  Facility  as a Chain  Facility  or
operate it under a Mark until the end of the Term.

7.1.2  A  System  Assessment  Fee"  comprised  of  the  Marketing  Fee  and  the
Reservation  Fee, as stated in Schedule C,  accrues  from the Opening Date until
the end of the Term, including during suspension periods.  After 60 days written
notice,  we may change either or both of the components of the System Assessment
Fee to cover costs as described in Schedule C or to cover the cost of additional
services or programs for Chain Facilities.  At our option,  you will also pay or
reimburse  us  for  travel  and  other  agent   commissions   paid  for  certain
reservations at the Facility and a " GDS Fee" levied to pay for reservations for
the Facility originated or

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processed  through  the  Global  Distribution  System,  the  Internet  and other
reservation  systems and  networks.  We may charge a reasonable  service fee for
this service.

7.2 You will pay to us "Taxes" equal to any federal, state or local sales, gross
receipts,  use, value added,  excise or similar taxes assessed against us on the
Recurring  Fees by the  jurisdictions  where the  Facility is  located,  but not
including  any income tax,  franchise  or other tax for the  privilege  of doing
business by us in your State. You will pay Taxes to us when due.

7.3 " Interest"  is payable  when you receive our invoice on any past due amount
payable to us under this  Agreement at the rate of 1.5% per month or the maximum
rate permitted by applicable law, whichever is less,  accruing from the due date
until the amount is paid.

7.4 Your  transferee  or you will pay us a "Relicense  Fee" equal to the Initial
Fee we would then charge a new franchisee for the Facility if a Transfer occurs.

8.      Indemnifications.

8.1 Independent of your obligation to procure and maintain  insurance,  you will
indemnify,  defend and hold the  Indemnitees  harmless,  to the  fullest  extent
permitted  by law,  from and  against all Losses and  Expenses,  incurred by any
Indemnitee for any investigation, claim, action, suit, demand, administrative or
alternative  dispute  resolution  proceeding,  relating to or arising out of any
transaction,  occurrence  or service  at, or  involving  the  operation  of, the
Facility,  any breach or  violation of any  contract or any law,  regulation  or
ruling by, or any act, error or omission  (active or passive) of, you, any party
associated or  affiliated  with you or any of the owners,  officers,  directors,
employees,  agents or contractors of you or your affiliates,  including when you
are  alleged  or held to be the  actual,  apparent  or  ostensible  agent of the
Indemnitee,  or the active or passive negligence of any Indemnitee is alleged or
proven.  You have no  obligation  to  indemnify  an  Indemnitee  for  damages to
compensate  for  property  damage or  personal  injury  if a court of  competent
jurisdiction  makes a final  decision  not  subject to further  appeal  that the
Indemnitee engaged in willful  misconduct or intentionally  caused such property
damage or bodily injury.  This exclusion from the obligation to indemnify  shall
not,  however,  apply if the property  damage or bodily injury resulted from the
use of reasonable force by the Indemnitee to protect persons or property.

8.2  You  will  respond  promptly  to any  matter  described  in  the  preceding
paragraph, and defend the Indemnitee.  You will reimburse the Indemnitee for all
costs of defending the matter, including reasonable attorneys' fees, incurred by
the  Indemnitee if your insurer or you do not assume  defense of the  Indemnitee
promptly when requested, or separate counsel is appropriate,  in our discretion,
because of actual or  potential  conflicts  of  interest.  We must  approve  any
resolution  or course of action in a matter that could  directly  or  indirectly
have any adverse  effect on us or the Chain,  or could serve as a precedent  for
other matters.

8.3 We will  indemnify,  defend and hold you  harmless,  to the  fullest  extent


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permitted by law,  from and against all Losses and  Expenses  incurred by you in
any action or claim  arising  from your proper use of the System  alleging  that
your use of the System and any property we license to you is an  infringement of
a third  party's  rights  to any trade  secret,  patent,  copyright,  trademark,
service  mark or trade name.  You will  promptly  notify us in writing  when you
become aware of any alleged  infringement or an action is filed against you. You
will cooperate with our defense and resolution of the claim.  We may resolve the
matter by  obtaining a license of the  property  for you at our  expense,  or by
requiring that you discontinue using the infringing  property or modify your use
to avoid infringing the rights of others.

9.       Your Assignments, Transfers and Conveyances.

9.1 Transfer of the Facility. This Agreement is personal to you (and your owners
if you are an entity).  We are relying on your  experience,  skill and financial
resources  (and that of your  owners  and the  guarantors,  if any) to sign this
Agreement  with you.  You may finance the  Facility  and grant a lien,  security
interest or encumbrance on it without notice to us or our consent. If a Transfer
is to occur, the transferee or you must comply with Section 9.3. Your License is
subject to termination when the Transfer occurs. The License is not transferable
to your transferee,  who has no right or authorization to use the System and the
Marks when you transfer ownership or possession of the Facility.  The transferee
may not  operate the  Facility  under the System,  and you are  responsible  for
performing the  post-termination  obligations in Section 13. You and your owners
may, only with our prior written  consent and after you comply with Sections 9.3
and 9.6, assign, pledge, transfer,  delegate or grant a security interest in all
or any of your  rights,  benefits  and  obligations  under  this  Agreement,  as
security or otherwise.  Transactions  involving  Equity  Interests  that are not
Equity Transfers do not require our consent and are not Transfers.

9.2  Public  Offerings  and  Registered  Securities.  You may  engage  the first
registered  public  offering  of your Equity  Interests  only after you pay us a
public  offering  fee equal to  $15,000.  Your Equity  Interests  (or those of a
person, parent, subsidiary,  sibling or affiliate entity, directly or indirectly
effectively controlling you), are freely transferable without the application of
this Section if they are, on the Effective  Date,  or after the public  offering
fee is paid, they become,  registered under the federal  Securities Act of 1933,
as amended,  or a class of securities  registered under the Securities  Exchange
Act of 1934, as amended, or listed for trading on a national securities exchange
or the  automated  quotation  system of the National  Association  of Securities
Dealers,  Inc. (or any successor system),  provided that any tender offer for at
least a majority of your Equity  Interests will be an Equity Transfer subject to

Section 9. 1.

9.3 Conditions. We may, to the extent permitted by applicable law, condition and
withhold our consent to a Transfer when required  under this Section 9 until the
transferee  and you meet  certain  conditions.  If a Transfer  is to occur,  the
transferee  (or you, if an Equity  Transfer is involved) must first complete and
submit our Application, qualify to be a franchisee in our sole discretion, given

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the  circumstances  of  the  proposed  Transfer,  provide  the  same  supporting
documents as a new franchise  applicant,  pay the Application and Relicense Fees
then in effect, sign the form of Franchise Agreement we then offer in conversion
transactions  and  agree to  renovate  the  Facility  as if it were an  existing
facility of similar age and condition converting to the System, as we reasonably
determine.  We will provide a Punch List of  improvements  we will require after
the  transferee's  Application is submitted to us. We must also receive  general
releases from you and each of your owners,  and payment of all amounts then owed
to us and our affiliates by you, your owners,  your affiliates,  the transferee,
its owners and affiliates, under this Agreement or otherwise. Our consent to the
transaction will not be effective until these conditions are satisfied.

9.4 Permitted  Transferee  Transactions.  You may transfer an Equity Interest or
effect an Equity  Transfer  to a  Permitted  Transferee  without  obtaining  our
consent,  renovating the Facility or paying a Relicense Fee or Application  Fee.
No  Transfer  will be deemed to occur.  You also must not be in default  and you
must comply with the application and notice procedures specified in Sections 9.3
and 9.6. Each  Permitted  Transferee  must first agree in writing to be bound by
this  Agreement,  or at our option,  execute the Franchise  Agreement  form then
offered  prospective  franchisees.  No transfer to a Permitted  Transferee shall
release a living transferor from liability under this Agreement or any guarantor
under any Guaranty of this  Agreement.  You must comply with this Section if you
transfer the Facility to a Permitted  Transferee.  A transfer  resulting  from a
death may occur even if you are in default under this Agreement.

9.5  Attempted  Transfers.  Any  transaction  requiring  our consent  under this
Section 9 in which our consent is not first  obtained  shall be void, as between
you and us. You will continue to be liable for payment and  performance  of your
obligations  under this Agreement  until we terminate this  Agreement,  all your
financial  obligations to us are paid and all System  identification  is removed
from the Facility.  9.6 Notice of  Transfers.  You will give us at least 30 days
prior  written  notice  of  any  proposed   Transfer  or  Permitted   Transferee
transaction.  You will  notify  us when  you sign a  contract  to  Transfer  the
Facility and IO days before you intend to close on the transfer of the Facility.
We will  respond to all  requests  for our  consent  and  notices  of  Permitted
Transferee transactions within a reasonable time not to exceed 30 days. You will
notify us in writing  within 30 days after a change in  ownership of 25% or more
of your Equity  Interests  that are not  publicly  held or that is not an Equity
Transfer, or a change in the ownership of the Facility if you are not its owner.
You  will  provide  us  with  lists  of  the  names,  addresses,  and  ownership
percentages of your owner(s) at our request.

10. Our Assignments.  We may assign,  delegate or subcontract all or any part of
our rights and duties  under this  Agreement,  including  by  operation  of law,
without  notice and without your  consent.  We will have no  obligations  to you
after you are notified that our  transferee  has assumed our  obligations  under
this Agreement except those that arose before we assign this Agreement.

11. Default and Termination.

11. 1 Default In addition to the matters identified in Section 3. 1, you will be
in default under this  Agreement if (a) you do not pay us when a payment is due,


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(b) you do not perform any of your other obligations when this Agreement and the
System Standards Manual require,  or (c) if you otherwise breach this Agreement.
If your  default is not cured within ten days after you receive  written  notice
from us that you have not filed your monthly report,  paid us any amount that is
due or breached your obligations regarding Confidential  Information,  or within
30 days after you receive written notice from us of any other default (except as
noted below),  then we may terminate  this  Agreement by written  notice to you,
under  Section  11.2.  We will not  exercise  our right to terminate if you have
completely  cured your default,  or until any waiting period required by law has
elapsed.  In the case of quality assurance default, if you have acted diligently
to cure the default but cannot do so and have entered into a written improvement
agreement with us within 30 days after the failing inspection,  you may cure the
default  within 90 days  after the  failing  inspection.  We may  terminate  the
License if you do not perform that improvement agreement.

11.2 Termination.  We may terminate the License,  effective when we send written
notice to you or such later date as  required by law or as stated in the default
notice,  when (1) you do not cure a default as  provided  in Section II. I or we
are authorized to terminate under Section 3.1, (2) you discontinue operating the
Facility as a "Villager Lodge",  (3) you do or perform,  directly or indirectly,
any act or  failure  to act  that in our  reasonable  judgment  is or  could  be
injurious  or  prejudicial  to the  goodwill  associated  with the  Marks or the
System, (4) you lose possession or the right to possession of the Facility,  (5)
you (or any guarantor)  suffer the  termination of another  license or franchise
agreement with us or one of our affiliates, (6) you intentionally maintain false
books and  records or submit a  materially  false  report to us, (7) you (or any
guarantor)  generally fail to pay debts as they come due in the ordinary  course
of business, (8) you, any guarantor or any of your owners or agents misstated to
us or omitted to tell us a material  fact to obtain or maintain  this  Agreement
with us, (9) you receive two or more  notices of default from us in any one year
period  (whether or not you cure the  defaults),  (10) a violation  of Section 9
occurs, or a Transfer occurs before the relicensing process is completed,  (I 1)
you or any of your Equity  Interest  owners  contest in court the  ownership  or
right to  franchise  all or any part of the System or the validity of any of the
Marks,  (12) you, any  guarantor or the Facility is subject to any  voluntary or
involuntary  bankruptcy,  liquidation,  dissolution,  receivership,  assignment,
reorganization,  moratorium,  composition or a similar action or proceeding that
is not  dismissed  within 60 days after its  filing,  or (I 3) you  maintain  or
operate  the  Facility in a manner  that  endangers  the health or safety of the
Facility's guests.

11.3    Casualty and Condemnation.

11.3.1 You will notify us promptly  after the Facility  suffers a Casualty  that
prevents you from operating in the normal course of business, with less than 75%
of guest rooms  available.  You will give us information on the  availability of
guest rooms and the Facility's ability to honor advance  reservations.  You will
tell us in  writing  within 60 days after the  Casualty  whether or not you will
restore,  rebuild and refurbish the Facility to conform to System  Standards and
its condition prior to the Casualty.  This  restoration will be completed within

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180 days  after  the  Casualty.  You may  decide  within  the 60 days  after the
Casualty,  and if we do not hear from you, we will assume that you have decided,
to terminate this Agreement,  effective as of the date of your notice or 60 days
after the Casualty,  whichever comes first. If this Agreement so terminates, you
will  pay  all   amounts   accrued   prior  to   termination   and   follow  the
post-termination  requirements  in Section 13. You will not be  obligated to pay
Liquidated Damages if the Facility will no longer be used as an extended stay or
transient  lodging  facility  after the  Casualty.  11.3.2 You will notify us in
writing within 10 days after you receive notice of any proposed  Condemnation of
the  Facility,  and within IO days after  receiving  notice of the  Condemnation
date.  This  Agreement  will terminate on the date the Facility or a substantial
portion is conveyed to or taken over by the condemning authority.

11.3.3 The exclusive  territory  covenants in Section 2 will  terminate when you
give us notice of any  proposed  Condemnation  or that you will not  restore the
Facility after a Casualty.

11.4 Our Other  Remedies.  We may  modify  the  Protected  Territory  granted in
Section 2 if you violate your covenant in Section 2. We may suspend the Facility
from the  Reservation  System for any default or failure to pay or perform under
this Agreement, discontinue Reservation System referrals to the Facility for the
duration of such  suspension,  and may divert  previously  made  reservations to
other Chain  Facilities after giving notice of  non-performance,  non-payment or
default.  You will continue to be liable for all Reservation Fees throughout the
suspension period. All Reservation System User Fees accrue during the suspension
period.  Reservation service will be restored after you have fully cured any and
all defaults and failures to pay and perform.  We may omit the Facility from the
Directory  if you are in  default  on the  date we must  determine  which  Chain
Facilities  are included in the  Directory.  You  recognize  that any use of the
System not in accord  with this  Agreement  will cause us  irreparable  harm for
which there is no adequate  remedy at law,  entitling us to injunctive and other
relief We may litigate to collect amounts due under this Agreement without first
issuing a default or termination notice. Our consent or approval may be withheld
if needed while you are in default under this Agreement or may be conditioned on
the cure of all your defaults.

11.5 Your  Remedies.  If we fail to issue our  approval  or  consent as and when
required under this Agreement  within a reasonable time of not less than 30 days
after we receive all of the information we request,  and you believe our refusal
to approve or consent is wrongful,  you may bring a legal  action  against us to
compel us to issue our  approval  or  consent to the  obligation.  To the extent
permitted by applicable  law,  this action shall be your  exclusive  remedy.  We
shall  not be  responsible  for  direct,  indirect,  special,  consequential  or
exemplary damages, including, but not limited to, lost profits or revenues.

12.     Liquidated Damages.

12.1  Generally.  If we terminate  this  Agreement  under  Section  11.2, or you
terminate  this  Agreement  (except  under  Section  11.3 or as a result  of our
default which we do not cure within a reasonable time after written notice), you
will pay us within 30 days  following  the date of  termination,  as  Liquidated

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Damages,  an amount equal to the sum of accrued  Royalties and System Assessment
Fees during the immediately  preceding 24 full calendar months (or the number of
months remaining in the unexpired Tenn at the date of termination,  whichever is
less).  If the Facility  has been open for less than 24 months,  then the amount
shall be the average  monthly  Royalties  and System  Assessment  Fees since the
Opening Date  multiplied by 24. You will also pay any applicable  Taxes assessed
on such  payment.  Liquidated  Damages  will  not be less  than the  product  of
$1,200.00  multiplied  by the  number  of  guest  rooms in the  Facility.  If we
ten-ninate  this Agreement under Section 3 before the Opening Date, you will pay
us within 10 days after you receive our notice of termination Liquidated Damages
equal to  one-half  the amount  payable  for  termination  under  Section  11.2.
Liquidated  Damages  are paid in place of our claims for lost  future  Recurring
Fees under this  Agreement.  Our right to receive  other  amounts due under this
Agreement is not affected.

12.2  Condemnation  Payments.  In the event a Condemnation is to occur, you will
pay us the fees set  forth in  Section  7 for a period  of six  months  after we
receive the initial notice of condemnation described in Section 11.3.2, or until
the Condemnation occurs, whichever is longer. You will pay us Liquidated Damages
equal to the average daily Recurring Fees for the six month period preceding the
date  of  your  condemnation  notice  to us  multiplied  by the  number  of days
remaining in the six month notice period if the Condemnation is completed before
the six month notice  period  expires.  This payment will be made within 30 days
after  Condemnation  is completed (when you close the Facility or you deliver it
to the condemning  authority).  If the  Condemnation  is completed after the six
month notice period expires you will pay no Liquidated Damages, but you must pay
the fees set forth in Section 7 when due until Condemnation is completed.

13.     Your Duties At and After Termination. When the license or this Agreement
terminates for any reason whatsoever:


13.1 System Usage Ceases.  You will immediately stop using the System to operate
and identify the  Facility.  You will remove all signage and other items bearing
any Marks and follow the other steps detailed in the System Standards Manual for
changing the  identification  of the Facility.  You will promptly  paint over or
remove  the  Facility's  distinctive  System  trade  dress,  color  schemes  and
architectural features.

13.2 Other  Duties.  You will pay all  amounts  owed to us under this  Agreement
within 10 days after  termination.  You will owe us Recurring Fees on Gross Room
Revenues

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accruing while the Facility is identified as a "Villager  Lodge",  including the
System  Assessment  Fees for so long as the Facility  receives  service from the
Reservation  System. We may immediately remove the Facility from the Reservation
System and divert  reservations  as  authorized in Section 11.4. We may also, to
the extent  pen-nitted  by  applicable  law, and without  prior notice enter the
Facility and any other parcels,  remove software  (including archive and back-up
copies) for accessing the Reservation System, all copies of the System Standards
Manual,  Confidential Information,  equipment and all other personal property of
ours,  and paint  over or remove and  purchase  for  $10.00,  all or part of any
interior or exterior  Mark-bearing  signage (or signage face plates),  including
billboards, whether or not located at the Facility, that you have not removed or
obliterated  within  five  days  after  termination.  You will  promptly  pay or
reimburse  us for our cost of removing  such items,  net of the $10.00  purchase
price for signage. We will exercise reasonable care in removing or painting over
signage.  We will have no obligation or liability to restore the Facility to its
condition  prior to removing the signage.  We shall have the right,  but not the
obligation,  to purchase  some or all of the  Facility's  Mark-bearing  FF&E and
supplies at the lower of their cost or net book value, with the right to set off
their aggregate purchase price against any sums then owed us by you.

13.3 Advance  Reservations.  The Facility  will honor any advance  reservations,
including  group  bookings,  made for the Facility  prior to  termination at the
rates and on the terms  established  when the reservations are made and pay when
due all related travel agent commissions.

13.4  Survival of Certain  Provisions.  Sections 3.8 (as to audits,  for 2 years
after  termination),  3.9 (as to  information  relating to the Term, for 2 years
after  termination),  3.13, 7 (as to amounts accruing through  termination),  8,
11.4,  12,  13,  15,  16 and 17  survive  termination  of the  License  and this
Agreement,  whether  termination is initiated by you or us, even if ten-nination
is wrongful.

14.     Your Representations and Warranties. You expressly represent and warrant
to us as follows:

14.1 Quiet Enjoyment.  You own, or will own prior to commencing improvement,  or
lease, the Location and the Facility.  You will be entitled to possession of the
Location and the Facility during the entire Term without restrictions that would
interfere with your performance under this Agreement,  subject to the reasonable
requirements of any financing secured by the Facility.

14.2 This  Transaction.  You have  received,  at least 10 business days prior to
execution of this  Agreement  and making any payment to us, our current  Unifomi
Franchise  Offering  Circular for  prospective  franchisees.  Neither we nor any
person  acting on our  behalf  has made any oral or  written  representation  or
promise to you that is not written in this Agreement on which you are relying to
enter into this Agreement.  You release any claim against us or our agents based
on any oral or written  representation  or promise not stated in this Agreement.
You and the persons signing this Agreement for you have full power and authority
and have been duly authorized, to enter into and perform or cause performance of
your obligations under this Agreement. You have obtained all necessary approvals
of your owners,  Board of Directors and lenders.  Your  execution,  delivery and
performance of this Agreement will not violate, create a default under or breach
of  any  charter,  bylaws,   agreement  or  other  contract,   license,  permit,
indebtedness,  certificate, order, decree or security instrument to which you or
any of your  principal  owners is a party or is subject or to which the Facility
is  subject.  Neither  you nor the  Facility  is the  subject of any  current or
pending  merger,  sale,  dissolution,   receivership,  bankruptcy,  foreclosure,
reorganization,  insolvency,  or similar  action or  proceeding  on the date you
execute this  Agreement and was not within the three years  preceding such date,
except as  disclosed  in the  Application.  You will submit to us the  documents
about the  Facility,  you,  your owners and your finances that we request in the
Franchise  Application (or after our review of your initial  submissions) before
or within 30 days after you sign this Agreement.


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14.3 No  Misrepresentations  or Implied Covenants.  All written  information you
submit to us about  the  Facility,  you,  your  owners,  any  guarantor,  or the
finances of any such person or entity,  was or will be at the time delivered and
when you sign this Agreement,  true, accurate and complete, and such information
contains no misrepresentation of a material fact, and does not omit any material
fact  necessary  to make the  information  disclosed  not  misleading  under the
circumstances.  There are no express or implied covenants or warranties, oral or
written, between we and you except as expressly stated in this Agreement.

15.     Proprietary Rights.

15.1 Marks and System.  You will not acquire any interest in or right to use the
System or Marks except under this Agreement. You will not apply for governmental
registration  of the Marks, or use the Marks or our corporate name in your legal
name, but you may use a Mark for an assumed business or trade name filing.

15.2  Inurements.   All  present  and  future  distinguishing   characteristics,
improvements  and  additions  to or  associated  with the  System by us,  you or
others,  and all  present  and future  service  marks,  trademarks,  copyrights,
service  mark  and  trademark  registrations  used and to be used as part of the
System,  and the associated  good will,  shall be our property and will inure to
our benefit. No good will shall attach to any secondary designator that you use.

15.3 Other  Locations and Systems.  We and our affiliates each reserve the right
to own, in whole or in part, and manage, operate, use, lease, finance, sublease,
franchise,  license (as  licensor  or  licensee),  provide  services to or joint
venture (i)  distinctive  separate  lodging or food and beverage marks and other
intellectual  property  which  are not part of the  System,  and to  enter  into
separate  agreements  with you or others (for  separate  charges) for use of any
such other marks or proprietary  rights,  (ii) other lodging,  food and beverage
facilities, or businesses, under the System utilizing modified System Standards,
and (iii) a Chain Facility at or for any location other than the Location or, in
the case of a Chain Facility of the same name, in the Protected  Territory.  You
acknowledge  that we are affiliated with or in the future may become  affiliated
with other  lodging  providers or franchise  systems that operate under names or
marks other than the Marks. We and our affiliates may use or benefit from common
hardware,  software,  communications  equipment and services and  administrative
systems  for  reservations,  franchise  application  procedures  or  committees,
marketing and advertising  programs,  personnel,  central  purchasing,  approved
supplier  lists,  franchise  sales  personnel (or  independent  franchise  sales
representatives), etc.

15.4 Confidential Information. You will take all appropriate actions to preserve
the  confidentiality  of all  Confidential  Information.  Access to Confidential
Information  should be limited to persons who need the Confidential  Information
to perform  their jobs and are  subject to your  general  policy on  maintaining


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confidentiality  as a  condition  of  employment  or who  have  first  signed  a
confidentiality   agreement.   You  will  not  permit  copying  of  Confidential
Information (including,  as to computer software, any translation,  decompiling,
decoding, modification or other alteration of the source code of such software).
You will use Confidential Information only for the Facility and to perform under
this  Agreement.  Upon  termination (or earlier,  as we may request),  you shall
return to us all originals  and copies of the System  Standards  Manual,  policy
statements  and  Confidential  Information  " fixed in any  tangible  medium  of
expression,"  within the meaning of the U.S.  Copyright  Act,  as amended.  Your
obligations  under this  subsection  commence  when you sign this  Agreement and
continue for trade secrets  (including  computer  software we license to you) as
long as they remain secret and for other Confidential  Information,  for as long
as we continue to use the information in confidence,  even if edited or revised,
plus three  years.  We will  respond  promptly and in good faith to your inquiry
about continued protection of any Confidential Information.

15.5  Litigation.  You will promptly  notify us of (i) any adverse or infringing
uses of the  Marks  (or  names or  symbols  confusingly  similar),  Confidential
Information or other System intellectual property, and (ii) or any threatened or
pending  litigation  related to the System against (or naming as a party) you or
us of which you become  aware.  We alone  handle  disputes  with  third  parties
concerning  use of all or any part of the System.  You will  cooperate  with our
efforts to resolve these disputes.  We need not initiate suit against  imitators
or infringers who do not have a material adverse impact on the Facility,  or any
other suit or  proceeding to enforce or protect the System in a matter we do not
believe to be material.

16.     Relationship of Parties.

16.1  Independence.  You are an  independent  contractor.  You are not our legal
representative  or agent,  and you have no power to  obligate us for any purpose
whatsoever.  We and you  have a  business  relationship  based  entirely  on and
circumscribed  by  this  Agreement.  No  partnership,   joint  venture,  agency,
fiduciary or  employment  relationship  is intended or created by reason of this
Agreement.  You will  exercise  full and  complete  control  over and have  full
responsibility for your contracts, daily operations, labor relations, employment
practices  and  policies,  including,  but  not  limited  to,  the  recruitment,
selection, hiring, disciplining,  firing, compensation, work rules and schedules
of your employees.

16.2  Joint   Status.   If  you   comprise  two  or  more  persons  or  entities
(notwithstanding  any agreement,  arrangement or understanding  between or among
such persons or entities) the rights,  privileges  and benefit so this Agreement
may only be exercised and enjoyed jointly.  Theliabilities and  responsibilities
under  this  Agreement  will be the joint and  several  obligations  of all such
persons or entities.

17.     Legal Matters.

17.1 Partial  Invalidity.  If all or any part of a provision  of this  Agreement
violates the law of your state (if it applies),  such provision or part will not
be given effect. If all or any part of a provision of this Agreement is declared
invalid or unenforceable,  for  any  reason, or is not given effect by reason of


                                       74
<PAGE>



of the prior  sentence,  the remainder of the  Agreement  shall not be affected.
However,  if in our judgment the invalidity or ineffectiveness of such provision
or part substantially  impairs the value of this Agreement to us, then we may at
any time terminate  this  Agreement by written notice to you without  penalty or
compensation owed by either party.

17.2 Waivers,  Modifications and Approvals. If we allow you to deviate from this
Agreement,  we may insist on strict compliance at any time after written notice.
Our silence or inaction  will not be or establish a waiver,  consent,  course of
dealing, implied modification or estoppel. All modifications, waivers, approvals
and  consents of or under this  Agreement by us must be in writing and signed by
our authorized representative to be effective.

17.3 Notices. Notices will be effective if in writing and delivered by facsimile
transmission  with  confirmation  original  sent by first  class  mail,  postage
prepaid, by delivery service, with proof of delivery, or by first class, prepaid
certified or registered mail, return receipt requested, to the appropriate party
at its address stated below or as may be otherwise designated by notice. Notices
shall be deemed given on the date  delivered or date of attempted  delivery,  if
refused.

Your name: GOLDEN OPPORTUNITY DEVELOPMENT
Your address: 268 West 400 South, Suite 300, Salt Lake City, Utah 84101
Your fax No.: 901-575-8092

                Attention:         Delmar Janovic

Villager Franchise Systems, Inc.:

Our address: 6 Sylvan Way, P.O. Box 278, Parsippany, New Jersey 07054-0278,
Attention: Vice President-Franchise Administration; Fax No. (973) 496-5359

17.4  Remedies.  Remedies  specified in this Agreement are cumulative and do not
exclude any remedies  available at law or in equity.  The  non-prevailing  party
will pay all costs and expenses,  including reasonable attorneys' fees, incurred
by the prevailing  party to enforce this Agreement or collect amounts owed under
this  Agreement.  You  consent  and waive  your  objection  to the  nonexclusive
personal  jurisdiction  of and venue in the New Jersey state courts  situated in
Morris County,  New Jersey and the United States District Court for the District
of New Jersey for all cases and controversies under this Agreement or between we
and you.

17.5  Miscellaneous.  This Agreement will be governed by and construed under the
laws of the State of New Jersey. The New Jersey Franchise Practices Act will not
apply to any Facility located outside the State of New Jersey. This Agreement is
exclusively  for  the  benefit  of  the  parties.   There  are  no  third  party
beneficiaries.  No agreement between us and anyone else is for your benefit. The
section headings in this Agreement are for convenience of reference only. We may
unilaterally  revise Schedule C under this Agreement.  This Agreement,  together
with the exhibits and schedules attached,  is the entire agreement  (superseding
all prior  representations,  agreements and understandings,  oral or written) of
the parties about the Facility.


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<PAGE>



17.6  Waiver of Jury Trial.  The parties  waive the right to a jury trial in any
action related to this Agreement or the relationship between the franchisor, the
franchisee, any guarantor, and their respective successors and assigns.

17.7    Special Acknowledgements.

17.7.1 You  received  our  Uniform  Franchise  Offering  Circular  ("UFOC")  for
prospective  franchisees  at least 10 business  days before,  and a copy of this
Agreement and all other agreements we are asking you to sign at least 5 business
days before,  signing this  Agreement and paying the Initial Fee to us. You have
received  our UFOC at least 10  business  days  before you paid any fee to us or
signed any contract with us.

17.7.2  Neither  we nor any  person  acting on our  behalf  has made any oral or
written  representation or promise to you on which you are relying to enter into
this  Agreement  that is not  written in this  Agreement.  You release any claim
against us or our agents based on any oral or written  representation or promise
not stated in this Agreement.

17.7.3 This Agreement, together with the exhibits and schedules attached, is the
entire  agreement  superseding  all previous  oral and written  representations,
agreements and understandings of the parties about the Facility and the License.

17.7.4 You acknowledge  that no salesperson has made any promise or provided any
information to you about projected sales, revenues,  income, profits or expenses
from the  Facility  except as stated in Item 19 of the UFOC or in a writing that
is attached to this Agreement.

17.7.5  You  understand  that the  franchise  relationship  is an arms'  length,
commercial business relationship in which each party acts in its own interest.

18. Royalty  Waiver.  We will waive your  obligation to pay the Royalty on Gross
Room  Revenues  accruing  during the third  License  Year if (i) the  Facility's
occupancy rate during the second License Year, determined by dividing the number
of  occupied  room  nights  (including  complimentary  rooms)  by the  number of
available  room nights during the period,  is less than 70%, (ii) you are not in
default  under this  Agreement at the beginning of the License Year and you cure
any default  that occurs  during the third  License  Year within the time period
permitted under this Agreement, (iii) you pay the System Assessment Fee when due
during the third License Year,  (iv) you install the  combination  refrigerator,
microwave and dry storage unit in each guest room at or before the Opening Date,
(v) the  Facility  passes all quality  assurance  inspections  during the second
License Year, and completes the entire Punch List when required, (vi) during the
second  License  Year,  you insert and run our  standard or a larger  classified
advertisement in the largest  circulation  daily newspaper in your hotel trading
area,  making your tear sheets and insertion  orders available to us on request,
and  (vii) you  implement  and  continue  during  the  second  License  Year the
mandatory  local marketing and  advertising  activities  specified in the Direct
Sales & Marketing Guide.


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<PAGE>





19.  Special  Stipulations.  The following  special  stipulations  apply to this
Agreement and supersede any  inconsistent or conflicting  provisions.  These are
personal to you and are not  transferable  or  assignable  except to a Permitted
Transferee.

19.1 Reduced Relicense Fee. If you are not then in default under this Agreement,
the  Relicense  Fee for a  Transfer  will be $5,000 if we  receive  the  written
Transfer  request before the third  anniversary of the Opening Date.  After that
anniversary, the Relicense Fee will be $7,500.00.

19.2 Liquidated Damages. Liquidated Damages payable upon Termination will be Six
Hundred Dollars ($600.00) for each guest room of the Facility you are authorized
to operate at the time of Termination.

19.3 Your Additional  Termination  Right.  You may terminate the License without
cause or penalty effective only on the fifth or tenth anniversary of the Opening
Date  provided  you give us at least  six (6)  months  prior  written  notice of
termination  and you are not in default under this  Agreement at the time notice
must  be  given  or at the  effective  date  of  termination.  You  will  pay no
Liquidated  Damages if you satisfy the conditions of the preceding  sentence and
you perform the post termination  obligations specified in this Agreement within
10 days after the effective date of termination.  Your rights under this Section
will  automatically  terminate  without  notice  if  and as of  the  date  (i) a
Termination  occurs,  (ii) you fail to cure any  default  under  this  Agreement
within the time  permitted,  if any,  in the  notice of default we send you,  or
(iii) after the Facility  satisfies  the  Improvement  Obligation,  the Facility
scores less than 350 (or its then equivalent) on a quality assurance  inspection
and then fails to achieve a score of at least 350 (or its then  equivalent) in a
reinspection  to  be  performed  no  sooner  than  30  days  after  the  initial
inspection.

19.4 Our  Additional  Termination  Right.  We may terminate the License  without
cause or penalty effective only on the fifth or tenth anniversary of the Opening
Date  provided  we give you at least  six (6)  months  prior  written  notice of
termination. You will perform the post termination obligations specified in this
Agreement  within 10 days after the effective date of temiination.  You will pay
no  Liquidated  Damages if we terminate  the License  under this Section and you
perform the post termination  obligations  specified in this Agreement within 10
days after the effective date of termination.

19.5.  Special  Combined  Fees.  Notwithstanding  Section  7.1, you will pay the
"Combined  Fee,"  consisting  of the  Royalty  and  the  System  Assessment  Fee
(excluding  agent and property to property  commissions,  Internet  fees,  guest
reward and affinity  program  fees,  service fees and charges,  guest  complaint
assessments,  and GDS  Fees),  to us at the  rates  set  forth in this  Section,
provided that the Facility opens in accordance with the deadline  established by
the terms of this Agreement:

19.5.1 The  Combined  Fee shall be five  percent  (5.0%) of Gross Room  Revenues
accruing during the first and second License Years; and

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<PAGE>



19.5.2  The Combined Fee shall be five and one half percent (5.5 %) of Gross
Room Revenues accruing during the third License Year; and

19.5.3 The  Combined  Fee shall be six  percent  (6.0%) of Gross  Room  Revenues
accruing during the fourth License Year; and

19.5.4 The Royalty and System  Assessment Fees shall be computed and paid at the
rates specified in Section 7.1 on Gross Room Revenues  accruing after the fourth
License Year.

19.5.5  The rate  changes  set  forth in this  Section  automatically  terminate
without  notice or opportunity to cure, and the Combined Fees shall reset to the
rates specified in Section 7, if and as of the date (i) a Termination occurs, or
we send you a notice of default and you fail to cure the default within the time
specified,  if any,  in the notice of  default,  or (ii) after you  satisfy  the
Improvement  Obligation,  the Facility receives a quality  assurance  inspection
score of less  than  350 (or its  then  equivalent)  and the  Facility  fails to
achieve a quality  assurance  inspection score of at least 350 in a reinspection
to be performed not less than 30 days after the initial inspection.

19.6  Mandatory  Rooms  Addition.  You must  construct,  equip and operate  when
completed  under  applicable  System  Standards and the approval  procedures for
improvements  set forth in Sections 3.1 and 3.2 of this  Agreement,  an addition
having at least 32 guest rooms (the  "Addition") to the then existing  Facility.
You will not be required to pay a Rooms Addition Fee for the Addition.  You must
commence  construction  of the Addition  within 90 days after the Effective Date
and then proceed  diligently to construct the  Addition.  The Addition  shall be
ready to open for business  under the System,  after  obtaining  our approval to
open (which we will not unreasonably  withhold or delay), within eighteen months
after the Effective Date.





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                                       78

<PAGE>



IN WITNESS  WHEREOF,  the parties have  executed  this  Agreement as of the date
first stated above.


WE:
Villager Franchise systems, Inc.:


By: /s/                                    Attest:  /s/
   ---------------------------             ------------------------------------
      Vice President                                  Assistant Secretary



YOU, as franchisee
GOLDEN OPPORTUNITY DEVELOPMENT

  By:   /s/                                Attest:  /s/
   ---------------------------            -------------------------------------
       President

















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<PAGE>



                                   APPENDIX A
                                   DEFINITIONS

Agreement means this Franchise Agreement.
Application  Fee means the fee you pay when you submit  your  Application  under
Section 6. Approved Plans means your plans and  specifications  for constructing
or improving the Facility  initially or after  opening,  as approved by us under
Section 3.

Casualty means  destruction or significant  damage to the Facility by act of God
or other event beyond your reasonable anticipation and control.

Chain means the network of Chain Facilities.

Chain  Facility  means a lodging  facility  we own,  lease,  manage,  operate or
authorize another party to operate using the System and identified by the Marks.

Condemnation  means the taking of the Facility for public use by a government or
public agency legally  authorized to do so,  permanently or temporarily,  or the
taking of such a substantial portion of the Facility that continued operation in
accordance with the System Standards,  or with adequate parking  facilities,  is
commercially impractical, or if the Facility or a substantial portion is sold to
the condemning authority in lieu of condensation.

Conference  Fee means the fee we charge for your  attendance at a conference for
Chain Facilities and their franchisees when and if held.

Confidential  Information  means any trade  secrets we own or protect  and other
proprietary  information not generally known to the lodging  industry  including
confidential portions of the System Standards Manual or information we otherwise
impart to you and your representatives in confidence.  Confidential  Information
includes the " Rules of Operation Manual" and all other System Standards manuals
and  documentation,  including  those on the  subjects  of  employee  relations,
finance and  administration,  field  operation,  purchasing and  marketing,  the
Reservation System software and applications software.

Declaration  means the Declaration of Franchise  Agreement you and we sign under
Section 5.
Design  Standards mean standards  specified in the System  Standards Manual from
time to time for design, construction,  renovation, modification and improvement
of new or existing Chain  Facilities,  including all aspects of facility design,
number  of  rooms,   rooms  mix  and  configuration,   construction   materials,
workmanship,  finishes,  electrical,  mechanical,  structural,  plumbing,  HVAC,
utilities,  access,  life  safety,  parking,  systems,  landscaping,  amenities,
interior design and decor and the like for a Chain Facility.


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<PAGE>



Directory means the general  purpose  directory we publish listing the names and
addresses of Chain  Facilities,  and at our  discretion,  other  Villager  Lodge
facilities located outside the United States, Canada and Mexico.

Effective Date means the date we insert in the Preamble of this Agreement  after
we sign it.

Equity  Interests  shall  include,  without  limitation,  all  forms  of  equity
ownership of you,  including  voting  stock  interests,  partnership  interests,
limited liability company membership or ownership  interests,  joint and tenancy
interests,  the  proprietorship  interest,  trust beneficiary  interests and all
options, warrants, and instruments convertible into such other equity interests.

Equity Transfer means any transaction in which your owners or you sell,  assign,
transfer, convey, pledge, or suffer or permit the transfer or assignment of, any
percentage of your Equity  Interests  that will result in a change in control of
you to persons  other than those  disclosed on Schedule B, as in effect prior to
the  transaction.  Unless there are  contractual  modifications  to your owners'
rights,  an Equity Transfer of a corporation or limited liability company occurs
when either majority  voting rights or beneficial  ownership of more than 50% of
the Equity Interests changes.  An Equity Transfer of a partnership occurs when a
newly  admitted  partner  will  be the  managing,  sole or  controlling  general
partner,  directly  or  indirectly  through a change in  control  of the  Equity
Interests of an entity  general  partner.  An Equity  Transfer of a trust occurs
when either a new  trustee  with sole  investment  power is  substituted  for an
existing  trustee,  or a majority of the  beneficiaries  convey their beneficial
interests  to persons  other than the  beneficiaries  existing on the  Effective
Date. An Equity Transfer does not occur when the Equity Interest ownership among
the  owners of Equity  Interests  on the  Effective  Date  changes  without  the
admission of new Equity  Interest  owners.  An Equity  Transfer  occurs when you
merge,  consolidate or issue additional  Equity Interests in a transaction which
would have the effect of diluting the voting rights or  beneficial  ownership of
your owners'  combined Equity  Interests in the surviving  entity to less than a
majority.

Facility means the Location,  together with all improvements,  buildings, common
areas,  structures,  appurtenances,   facilities,  entry/exit  rights,  parking,
amenities,  FF&E and related rights,  privileges and properties  existing at the
Location on the Effective Date or afterwards.

FF&E means furniture, fixtures and equipment.

FF&E Standards means standards specified in the System Standards Manual for FF&E
and supplies to be utilized in a Chain Facility.

Food and Beverage means any  restaurant,  catering,  bar/lounge,  entertainment,
room service, retail food or beverage operation,  continental breakfast, food or
beverage concessions and similar services offered at the Facility.

Gross Room Revenues means gross revenues  attributable to or payable for rentals
of guest rooms at the Facility,  including all credit  transactions,  whether or
not collected,  but excluding  separate charges to guests for Food and Beverage,


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<PAGE>




room service,  telephone  charges,  key forfeitures and  entertainment;  vending
machine receipts; and federal, state and local sales, occupancy and use taxes.

Improvement  Obligation means your obligation to either (i) renovate and upgrade
the Facility,  or (ii) construct and complete the Facility,  in accordance  with
the Approved Plans and System Standards, as described in Section 3.

Indemnitees  means us, our direct and  indirect  parent,  subsidiary  and sister
corporations, and the respective officers, directors,  shareholders,  employees,
agents and contractors,  and the successors,  assigns, personal representatives,
heirs and legatees of all such persons or entities.

Initial  Fee  means the fee you are to pay for  signing  this-lis  Agreement  as
stated in Section 6.

License means the  non-exclusive  license to operate the type of Chain  Facility
described in Schedule B only at the  Location,  using the System and the Mark we
designate in Section 1.

License  Year means the one year period  beginning  on the Opening Date and each
subsequent  anniversary  of the Opening Date and ending on the day preceding the
next anniversary of the Opening Date.

Liquidated  Damages  means the  amounts  payable  under  Section  12, set by the
parties  because  actual damages will be difficult or impossible to ascertain on
the Effective  Date and the amount is a reasonable  pre-estimate  of the damages
that will be incurred and is not a penalty.

Location  means the parcel of land situated at Baton Rouge,  Louisiana,  as more
fully described in Schedule A.

Losses and Expenses means all payments or  obligations  to make payments  either
(i) to or for third party claimants by any and all Indemnitees,  including guest
refunds, or (ii) incurred by any and all Indenmitees to investigate,  respond to
or  defend a  matter,  including  without  limitation  investigation  and  trial
charges,  costs and  expenses,  attorneys'  fees,  experts'  fees,  court costs,
settlement amounts, judgments and costs of collection.

Maintenance  Standards  means the standards  specified  from time to time in the
System  Standards  Manual for repair,  refurbishment  and  replacement  of FF&E,
finishes,  decor,  and  other  capital  items  and  design  materials  in  Chain
Facilities.

Marketing  Fee means the fee you pay to us under  Section 7 and  Schedule  C, as
amended, for advertising, marketing, training and other services.

Marks  means,  collectively  (i) the service  marks  associated  with the System
published in the System  Standards  Manual from time to time including,  but not
limited to, the name, design and logo for "Villager Lodge" and other marks (U.S.
Reg.  Nos.:  1,664,513 and 1,761,888) and (ii)  trademarks,  trade names,  trade
dress, logos and derivations,  and associated good will and related intellectual
property interests.

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<PAGE>



Marks  Standards means standards  specified in the System  Standards  Manual for
interior  and  exterior  Mark-bearing  signage,  advertising  materials,  china,
linens, utensils, glassware,  uniforms,  stationery,  supplies, and other items,
and the use of such items at the Facility or elsewhere.

Minor  Renovation  means  the  repairs,  refurbishing,   repainting,  and  other
redecorating of the interior, exterior, guest rooms, public areas and grounds of
the  Facility  and  replacements  of FF&E we may  require  you to perform  under
Section 3.16.

Minor Renovation Ceiling Amount means $750.00 per guest room.

Minor  Renovation  Notice means the written notice from us to you specifying the
Minor  Renovation to be performed and the dates for  commencement and completion
given under Section 3.16.

Opening Date means the date on which we  authorize  you to open the Facility for
business identified by the Marks and using the System.

Operations  Standards means standards  specified in the System  Standards Manual
for cleanliness,  housekeeping,  general maintenance, repairs, concession types,
food and  beverage  service,  vending  machines,  uniforms,  staffing,  employee
training, guest services, guest comfort and other aspects of lodging operations.

Permitted Transferee means (i) any entity,  natural person(s) or trust receiving
from the personal  representative  of an owner any or all of the owner's  Equity
Interests  upon  the  death of the  owner,  if no  consideration  is paid by the
transferee  or (ii) the spouse or adult issue of the  transferor,  if the Equity
Interest transfer is accomplished without consideration or payment, or (iii) any
natural person or trust  receiving an Equity  Interest if the transfer is from a
guardian  or  conservator   appointed  for  an   incapacitated   or  incompetent
transferor.

Protected  Territory  means a seven (7) mile  radius  from the front door of the
Facility.

Punch List  means the list of  upgrades  and  improvements  attached  as part of
Schedule B, which you are required to complete under Section 3.

Recurring  Fees  means fees paid to us on a periodic  basis,  including  without
limitation,  Royalties,  System  Assessment Fees, and other reservation fees and
charges as stated in Section 7.

Relicense  Fee means the fee your  transferee  or you pay to us under  Section 7
when a Transfer occurs.

Reservation  Fee means the fees you pay to us under Section 7 and Schedule C for
reservation services.

Reservation  System or "  Central  Reservation  System"  means  the  system  for
offering  to  interested   parties,   booking  and   communicating   guest  room
reservations for Chain Facilities described in Section 4.2.

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<PAGE>



Rooms  Addition  Fee means the fee we charge you for adding  guest  rooms to the
Facility.

Royalty  means the monthly fee you pay to us for use of the System under Section
7(a). Royalties means the aggregate of all amounts owed as a Royalty.

System means the  comprehensive  system for  providing  guest  lodging  facility
services  under the  Marks as we  specify  which at  present  includes  only the
following:   (a)  the  Marks;  (b)  other   intellectual   property,   including
Confidential  Information,  System Standards Manual and knowhow;  (c) marketing,
advertising,  publicity and other promotional materials and programs; (d) System
Standards; (e) training programs and materials; (f) quality assurance inspection
and scoring programs; and (g) the Reservation System.

System Assessment Fee means the Marketing Fee and the Reservation Fee.

System  Standards  means  the  standards  for the  participating  in the  System
published in the System  Standards  Manual,  including but not limited to Design
Standards,  FF&E Standards,  Marks Standards,  Operations Standards,  Technology
Standards and Maintenance Standards and any other standards, policies, rules and
procedures we promulgate about System operation and usage.

System  Standards  Manual means the Rules of  Operations  Manual,  the Trademark
Identification  Standards  Manual and any other manual we publish or  distribute
specifying the System Standards.

Taxes means the amounts payable under Section 7.3 of this Agreement.

Technology  Standards means standards  specified in the System  Standards Manual
for  local  and long  distance  telephone  communications  services,  telephone,
telecopy and other communications  systems, point of sale terminals and computer
hardware and software for various applications,  including,  but not limited to,
front desk, rooms management,  records maintenance,  marketing data, accounting,
budgeting and  interfaces  with the  Reservation  System to be maintained at the
Chain Facilities.

Term means the period of time during which this Agreement shall be in effect, as
stated in Section 5.

Termination means a termination of the License under Sections I 1. I or 1 1.2 or
your termination of the License or this Agreement.

Transfer  means  (1) an  Equity  Transfer,  (2) you  assign,  pledge,  transfer,
delegate or grant a security interest in all or any of your rights, benefits and
obligations  under this Agreement,  as security or otherwise without our consent
as specified in Section 9.2, (3) you assign (other than as  collateral  security
for  financing  the  Facility)  your  leasehold  interest in (if any),  lease or
sublease all or any part of the  Facility to any third party,  (4) you engage in
the sale, conveyance, transfer, or donation of your right, title and interest in
and to the  Facility,  (5) your lender or ecured  party  forecloses  on or takes
possession of your


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<PAGE>



interest in the Facility,  directly or indirectly,  or (6) a receiver or trustee
is appointed for the Facility or your assets, including the Facility. A Transfer
does not  occur  when you  pledge  or  encumber  the  Facility  to  finance  its
acquisition  or  improvement,  you  refinance  it, or you engage in a  Permitted
Transferee transaction.

"You" and "Your" means and refers to the party named as franchisee identified in
the first paragraph of this Agreement and its Permitted Transferees.

"We",  "Our" and "Us" means and refers to Villager  Franchise  Systems,  Inc., a
Delaware corporation, its successors and assigns.


                                       85

<PAGE>



                                   SCHEDULE A
                         (Legal Description of Facility)















                                       86

<PAGE>



                                   SCHEDULE B

PART 1:       YOUR OWNERS:

   Name                           Ownership Percentage   Type of Equity Interest

Diversified Holdings 1, Inc.                74.6%                stock
San Pedro Securities, Ltd.                  12.7%                stock
The Smith Family Trust                      12.7%                stock

PART I:        THE FACILITY:
        Primary designation of Facility: Villager Lodge
        Number of approved guest rooms: 134
        Parking facilities (number of spaces,  description):  At least 134 Other
        amenities, services and facilities:

PART III:      DESCRIPTION  AND  SCHEDULE  OF  RENOVATIONS  TO BE  COMPLETED  AS
                          THE IMPROVEMENT OBLIGATION:


                          [Punch List to be attached.]













                                       87

<PAGE>



                                 VILLAGER LODGE
                        VILLAGER FRANCHISE SYSTEMS, INC.
                                   SCHEDULE C

        The System Assessment Fee is a recurring, non-refundable payment. All or
any part of Fund  proceeds  received  during an  accounting  period  need not be
disbursed within that accounting period.
he Marketing Fee is 1% of Gross Room Revenues.

        The Reservation Fee is 1% of Gross Room Revenues.

        Notwithstanding  the above,  after 60 days  written  notice,  either the
Marketing Fee or the Reservation Fee may be changed, in our sole discretion,  on
a  Chain-wide  basis to cover  costs  (including  reasonable  direct or indirect
overhead costs) related to such services and. programs or the cost of additional
services or programs.

        If you elect to participate in optional Internet  reservation  programs,
you will be charged a fee per net  reservation  originated  through the Internet
that we may charge in our  discretion.  Internet-originated  reservations  carry
fees of either (i) $2.50 per gross  reservation  booked  through the Chain's web
site or other Internet sources,  or (ii) $7.00 per gross reservation booked over
the  TravelWeb.com  Internet  booking web site. If a  reservation  booked on the
Chain web site or other Internet source,  or  TravelWeb.com,  is canceled by the
guest using the same source or web site as was used to make the reservation, you
will not be charged the  applicable  fee.  You may  discontinue  the  Facility's
TravelWeb.com  listing  only by  giving  us  written  notice.  You  must pay the
TravelWeb.com  fee on all  reservations  booked  through  that  web  site  until
TravelWeb.com  makes the delisting request  effective.  We may charge additional
fees for creating or modifying  the  Facility's  Website,  Webpage or performing
other services.

        If the number of guest  complaints  per 1,000 occupied room nights about
you or the Facility in a calendar year exceed the "Annual Facility Allotment" we
establish with the approval of the Villager  Franchise  Advisory Board, you will
be charged a "First Assessment" of $10.00 for each additional complaint received
during that year.  You will be contacted  when the complaint is received and you
will be responsible to resolve the complaint to the  satisfaction  of the guest.
If you do not  respond  to any  complaint  for which you have  received  a First
Assessment  within 14 business days after referral to you and the guest contacts
us again to seek a  response,  you will be  charged  a  "Second  Assessment"  of
$25.00,  plus the costs we incur to settle  the matter  with the  guest.  If you
respond  in a timely  manner  but the  guest  remains  unsatisfied,  you will be
charged  the costs we incur to settle  the matter  with the  guest.  You will be
informed of your Annual Facility  Allotment when it is established.  The amounts
of the First and Second  Assessments may be changed on a Chain-wide basis at any
time upon 60 days advance  notice,  with the approval of the Villager  Franchise
Advisory Board.


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General Lafayette Inn
Baton, Rouge, Louisiana

                  FRANCHISER: VILLAGER FRANCHISE SYSTEMS, INC.
                                   "EXHIBIT A"
                            PUNCHLIST FOR CONVERSION
                                  JUNE 10, 1999

                        (Final revision on July 13, 1999)

--------------------------------------------------------------------------------



FACILITY                             TIER                        GUEST ROOMS
--------                             ----                        -----------
General Lafayette Inn                Lodge                       134 Actual
427 Lafayette Street                                             32 Closed
Baton Rouge, Louisiana 70802

OWNER/APPLICANT                                                  SALESPERSON
---------------                                                  -----------
Delmar Janovec                                                   James Cua
(800) 575-8073                                                   (404) 240-0518

O.A. REPRESENTATIVE

Sara Jabs

                           PROPERTY CONDITION SUMMARY
                           --------------------------

This 33-year-old  property  consists of three 4-story,  double loaded buildings.
All the  buildings  are  inter-connected  by walkways  and form an L-shape.  Two
buildings are exterior  corridor;  the remaining  building is interior corridor.
All the buildings are concrete  block  construction  with stone facades and flat
rooflines. The first floor is parking and floors 2 - 4 are guestrooms. The lobby
is located on the ground floor in the center of the 'V'.  Extensive  renovations
will be  required  in the  guestrooms.  Public  areas,  building  exteriors  and
landscaping will require upgrading to enhance curb appeal.  All but 33 guestroom
bath areas have shower units only,

There is the Culinary Arts Institute of Louisiana  located on the first floor of
one of the buildings. The institute operates the restaurant on the property. The
facility is only open in the evenings,

                                    EXISTING
                                    --------

Lobby Dimensions:                     300 SF
Guest Room Dimensions:      264 SF - 101 Rms.
                            288 SF - 33 Rms.

COMPLETION' TIME

All  items  listed in this  punchlist  must be  completed  before  opening  as a
Villager Lodge. 3 ATTACHMENTS (will follow under a separate cover)

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1.    Operational Requirements
2.    Quick Reference for Punchlist Requirements
3.    Kitchenette Unit

PROPERTY SIGNAGE

Provide Villager Lodge exterior signage per Company specifications. Signage must
be purchased from a vendor approved in advance by the Franchisor, and may not be
installed  without prior written approval from the Property Opening  Department.
Your License Agreement  controls your use of signage and timing of installation.
All existing signage (building,  high-rise,  channel letters,  billboards, etc.)
must be removed.  Modification of the existing  signage or face replacement must
be approved by the Design and Development Department.

PROPERTY EXTERIOR

1. Upon ncxt painting, ensure exterior areas comply with Company specifications.
The color scheme is blue doors and white trim.

2.   Provide oversized  multiple  exterior trash receptacles  within -10 days of
     entering the system.


3.   Resurface  badly  cracked and  damaged  areas of parking  lot.  Re-seal and
     stripe. To be completed by June 1, 2000.

4.   Upgrade property landscaping by installing  landscaping beds throughout the
     property.  Plant shrubs,  seasonal  flowers and ground cover throughout the
     property.  Emphasis should concentrate around property entrance,  lobby and
     pool  area.   Consulting  with  a  local  landscaping   company  is  highly
     recommended to maximize usage of existing flowerbeds.

5.   Upgrade  swimming pool to include to following:  To be completed by June 1,
     2000.

          a.   Repair  area  decking.  Pool  deck  is to be  concrete  or  other
               non-slip approved surface.

          b.   Replace  furniture.  Recommend 3 umbrella tables with 4 armchairs
               each and 8 chaise lounge chairs.

          c.   Replace  fence.  New pool fence  must be a minimum  height of 4'.
               Gates are to be self-closing  and latching.  The  installation of
               chain link is acceptable.

          d.   Villager  Lodge does not  require a pool  Completely  eliminating
               (fence, deck, coping, pool) and landscaping are is acceptable.



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PUBLIC AREAS

     1.   Villager Lodge interior lobby sign mus be ordered and installed within
          30 day of entering the system.

     2.   Villager  Lodge  requires  either  vinyl wall  covering,  an  approved
          textured finish or a good quality, durable paint.

     3.   The  owner  is  responsible  to  provide   facilities  to  assist  the
          handicapped  i  accordance  with  Local,  State,  and  Federal  codes,
          regulations and ordinances.

     4.   Provide/lease  guest  laundry  equipment  to include:  3 washers and 3
          dryers.

     5.   Replace ice machines. A minimum of on sanitary dispensing ice and soda
          machine for every 60 guestrooms is required.  Recommended placement is
          on per building.

     6.   Provide a vending area to include: a soda machine and a snack machine.
          An enclosed area is strongly  recommended.  To be completed  within 90
          days of entering the system.

PROJECT POWER UP REQUIREMENTS

1. The installation of a Project Power Up Property
Management System (PMS) or an
approved variation, is required. The General
Requirements are as follows:

     a.   Remove any existing room rack, room tree or posting machine.

     b.   Front desk should be renovated to allo for the  keyboard,  monitor and
          printer to be in  comfortable  working  positions  for the  employees.
          System  units for each  workstation  must also have a  well-ventilated
          space to reside in close  proximity to the Monitor and Keyboard,  with
          the exception of Wyse terminals on the HSS PMS.

     c.   Dot matrix  printers  will require a paper hole for the bottom feed of
          forms.

     d.   A file or "bucket" will be needed for registration cards. In addition,
          an alphabetical file or "bucket" for pre- printed  registration  cards
          arriving  will be needed.  A  secondary  file or "bucke in room number
          order is needed for check in registration cards and an vouchers.

     e.   A space for the file server must be made in the front desk area.  This
          space must allow for sufficient  airflow.  If the file server will not
          be  located  at the front  desk,  the area in which it will be located
          must be  accessed  24 hours a day  including  the ability for the nigh
          auditor to utilize it.

     f.   Space must be located near the file server for any interface equipment
          tha will be  needed,  i.e.:  call  accounting  and Point of Sale (POS)
          terminals.  When considering the placement of this equipment  remember
          that it will

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Baton, Rouge, Louisiana

          need electrical outlets and that the interface vendor will need to run
          cabl from the interface  equipment to the Property  Management  System
          (PMS).

     g.   The areas  designated  for all PMS equipment  must be well  ventilated
          with a temperature of approximately 72 degrees.  Equipment must not be
          placed  in  the  direct  vicinity  of  air   conditioning  or  heating
          ducts/vents. Equipment must not be placed in closed cabinets.

2. Hardware power requirements are as follows:

     a.   Proper  electrical  connections  must  be in  place  or  the  Property
          Management  System will not be  installed.  Each power  outlet  should
          contain no more than four power  receptacles.  The powe  outlets  must
          meet the following specifications: 115 volts, 60 H, 3 prong, dedicated
          power circuit,  protected by a dedicated 20-amp circuit  breaker.  Any
          device  other  than  the  designated  computer  equipment  will not be
          connected to the same circuit.  The use of power strips for any of the
          equipment  will not be supported.  Appropriate  surge  protectors  are
          required  for  all  equipment.   A  certified  electrician  with  good
          knowledge of the power supplies that the PMS will be utilizing  should
          be contacted to complete the  installation of all power  requirements.
          The  placement of any other  electrical  devices such as a credit card
          imprinter    should    be   at   least   3   feet    away   from   the
          terminals/workstations.

     b.   One  Uninterrupted  Power Supply (UPS) unit will be supplied  with the
          Power Up Package.  The UPS must be placed at least three feet from the
          file server.

     c.   The file server and its monitor  will plug into the UPS using 2 of its
          power outlets.  d. Each  workstation  will require 1 power outlet.  e.
          Each  modem  will  require 1 power  outlet  f. The UPS will  require 1
          Dedicated power outlet on its own dedicated circuit breaker.

3. Telephone line requirements are as follows:

     a.   Two  dedicated  telephone  lines with their own numbers are  required.
          Three are recommended for the MSI Property Management System. No other
          modems,  fax machines,  etc. are to be connected to these phone lines.
          For the third phone line,  used for  Interne  access,  we will allow a
          line to run through your phone switch.

     b.   Two modems will be supplied with the Project  Power Up Package.  These
          modems will utilize the two dedicated phone lines.

4.   Interface  vendors  must be  contacted  in advance to insure that they will
     meet the Power Up requirements. The franchisee is responsible for arranging
     any required  interface  upgrades  that may be necessary  for th testing of
     these upgrades.  With the exception of Credit Cards,  we strongly  recommen
     that Interface  Vendors be on site for the  installation  of the interface.
     Require cable connections must be obtained from your vendor.

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General Lafayette Inn
Baton, Rouge, Louisiana



5.   Cable run  requirements  are as follows:

     a.   All holes drilled at the front desk must be a minimum of 1 1/2 inch in
          diameter for pulling of power cords an cables with connectors.

     b.   If any  cable  run  will  be  more  than 10  feet  the  Power  Up Pre-
          Implementation Help Desk must be contacted.

     c.   All cable must be from a Company approved vendor.

6.   All questions  regarding selection of one of the approved systems are to be
     handled by Kim Anglin.  She may be reached at 602-389-  3903 or by email at
     Kim.Anglin@Cendant.com.


GUESTROOMS/BATH (Rooms Inspected)

1.   The property has 32 rooms that closed and in an unrentable condition. These
     rooms are located in the Lafayette Street  building.  If these rooms are to
     remain  unrentable,  linens and all furnishings  must be removed from these
     rooms. If at any time these rooms are brought back on line,  Villager Lodge
     standards must be met. The Quality  Assurance  Department  must inspect and
     approve vacant the closed rooms prior to reentering the system. These rooms
     are not to appear vacant from the property  exterior.  Good quality  drapes
     must be in position and closed at all times.

2.   Upgrade entrance doors to include to following: a. Install a hotel function
     cylindrical  knob lock and 1" throw  separate  keyed  deadbolt  (keyed  for
     emergency access only) per Company  standards.  Ensure locks meet state and
     local codes.

     b.   Install a one-way viewer.

     c.   Provides secondary locks (u-bar or chain).

3.   Provide a one way, doorknob latchset and a separate, non-keyed, 1" deadbolt
     lock on all connecting room doors.  Operating knobs must be located on room
     side only with flush plates between doors.

4.   Company  requires  hardwired  smoke  detectors.   However,   recommend  the
     installation of hardwired  smoke detectors with backup system.  This system
     may be  battery  within  the unit or a  generator  syste that is capable of
     restoring electrical service in case of an outage.

5.   Each  guestroom is required to have a free standing  kitchenette  unit that
     meets the Villager  Lodge  Standards.  This is a Villager  Lodge  Signature
     item. This unit must include a microwave,  refrigerator,  and a work top or
     storage  area.  Several  options are  available  through  Cendant  Supplier
     Services (800)  225-5411.  40% to be completed prior to entering the system
     and the remaining 60% within 12 months.


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6.   Many of the guestrooms  are in various  stages of renovation.  All Villager
     Lodge  standards  must be met. In  addition,  ensure  renovated  guestrooms
     provide the  following:

     a.   Paint rooms where worn or discolored t include ceilings,  walls, doors
          (bath, entrance, and connecting) and trim work.

     b.   Apply an approved finish over concrete block walls. Remove vinyl wall-
          covering from bath areas.  Villager Lodge requires  either vinyl wall-
          covering,  an  approved  textured  finish or a good  quality,  durable
          paint. To be completed by January 1, 2001.

     c.   Replace  artwork,  one  piece  per  headboard,  20" x 24"  minimum  is
          required.

     d.   Replace carper where worn,  stained,  matted.  Villager Lodge requires
          cut pile carpet with padding. Carpet must also be wall to wall.

     e.   Replace furniture package. A minimum of one credenza/armoire, a framed
          wall mirror,  one headboard per bed, an one free standing  night stand
          per room is  required.  A writing  surface i  required  to  consist of
          either a desk or an activity table. Two comfortable fabric upholstered
          chairs per room are required.

     f.   Replace lamp package.  Provide 2 lamps per headboard  wall, a credenza
          lamp and a lamp at leisure area. All wall-mounted lamps must have wire
          covers or molding,  loose cords are not acceptable.  Lamp package must
          be neutral  and  contemporary  (i.e.  brass).  The use of red or other
          colors of anodized metal is not acceptable.

     g.   Replace/provide  televisions.  Minimum  20"  remote  control  type  is
          required. Recommend 25" set.

     h.   Replace  bedspread  and  drapery  package.  New  draperies  must  have
          blackout  capabilities,  be pleated to double  fullness,  provide  for
          overlapping  of panels,  and must be baton or  mechanically  operated.
          Each bed must have a quilted  bedspread of an appropriate size for the
          bed.

     i.   A minimum of 10% of  guestrooms  must be prepared  and  designated  as
          non-smoking rooms.

7. Renovate bath area to include the following:

     a.   Replace  wall-mounted  sinks with vanity/sink units. New units must be
          of a light  neutral  color,  high-pressure  laminate or other  similar
          finish. Add sinks where necessary.

     b.   Purchase a complete  inventory  of terry stock to comply with  company
          specifications.

     c.   Provide a Ground Fault Duplex outlet (GFI) in each vanity area.

     d.   Replace/refinish  tub and sink chrome plumbing fixtures (drain covers,
          handles, showerheads, spouts, etc.) where tarnished.

     e.   Replace  flooring where worn,  discolore  Company  requires .085 gauge
          sheet vinyl or minimum of 2" single color ceramic tile (recommend 6" -
          8" tile).

     f.   Professionally  clean  shower  units,  tub and  ceramic  surrounds  to
          eliminate discoloration. Regrout and recaulk where needed.

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Baton, Rouge, Louisiana

     g.   Replace ceiling and tile as needed.

     h.   Remove "Sleepy Bear" shower doors.  Replace with a safety glass design
          or shower rod/curtain design.

8.   Provide Cable TV to include ESPN,  CNN and one premium movie channel within
     90 days of entering the system.

9.   Logo  supplies  must be  available  at the entry  inspection  by may not be
     placed in the guestrooms until official opening.

10.  Company requires that all properties  maintain  housekeeping at the highest
     levels.  We strongly  recommend  that the property  implement  housekeeping
     training programs to ensure customer satisfaction.

11.  The  operational  requirements  listed on Attachment 1, pag 1 and 2 must be
     completed  prior to entering the System.  If these items are not completed,
     it will cause a significant point loss on the Quality Assurance Inspection.

--------------------------------------------------------------------------------


HANDWRITTEN OR UNAUTHORIZED REVISIONS TO THIS PUNCHLIST ARE NOT VALID AND DO NOT
BIND THE  FRANCHISER.  ANY AND ALL REVISIONS TO THIS  PUNCHLIST MUST BE MADE AND
APPROVED BY THE FRANCHISER'S QUALITY ASSURANCE DEPARTMENT.

--------------------------------------------------------------------------------


This Punchlist identifies items that require action due to meet the Franchiser's
standards.  The Franchiser does not warrant that completion of the items on this
Punchlist  will  cause the  converting  facility  to be in  compliance  with any
applicable federal, state, local codes, ordinances or regulations. You (and your
architect,  contractor and engineer,  if applicable) are solely  responsible for
conforming the Facility to the  requirements of federal,  state and local codes,
ordinances and regulations that may apply to your site.

This  Punchlist has been prepared on the basis of a random sample  inspection of
the Facility on the date  specified.  The owner is  responsible  for meeting all
Franchiser Standards. All repairs,  replacements and improvements must cause the
item to meet or exceed the Franchisers  standards  published in the Standards of
Operation and Design Manual.

This  Punchlist  will be subject to revision at the discretion of the Franchiser
if the condition of the facility changes  materially or the License  (Franchise)
Agreement to which this is attached is executed more than 90 days after the date
of the Punchlist.  Note, that ordinary wear and tear,  particularly  during busy
seasons,  may result in the need for additional  work to meet entry standards of
the System within 180 days after the punchlist date or as otherwise specified by
the license (franchise) agreement.

This is not a  License  (Franchise)  Agreement,  the  Company  is  bound by this
punchlist unless and until the Company signs the License  (Franchise)  Agreement
for the inspected facility.

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NOTE: Any item on this  Punchlist that is not required to be completed  prior to
opening as a Villager  Lodge will  continue to be evaluated for  appearance  and
condition  during all Quality  Assurance  inspections  conducted before the date
when completion is required.

This  punchlist was finally  revised on July 13, 1999;  all previous  copies are
invalid.

1. FINAL revision on 7/13/99 by:

Signed: /s/ Delmar Janovec              Date: July 14, 1999
       --------------------                    -------------
Print Name: Delmar Janovec

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