LOAN AGREEMENT


     THIS LOAN AGREEMENT  ("Agreement")  is made and entered into as of the 13th
day of January,  2005,  by and  between  HUMPHREY  HOSPITALITY  TRUST,  INC.,  a
Virginia  corporation  (the  "Borrower"),  whose  address  for  purposes of this
Agreement is 309 North 5th Street,  Norfolk,  Nebraska 68702 (Attn: Don Heimes),
and GREAT WESTERN BANK, a Nebraska  corporation (the "Bank"),  whose address for
purposes of this Agreement is 6015 Northwest  Radial  Highway,  Omaha,  Nebraska
68104 (Attn: Kolleen Hoover).


                                    RECITALS

     WHEREAS,  Bank has agreed to make a Loan (as defined herein) to Borrower to
be  evidenced by the Loan  Documents  (as defined  herein),  which Loan is to be
secured by those  certain  hotels  described on Exhibit "A" attached  hereto and
incorporated  herein  by this  reference  (the  "Hotels"  or  individually,  the
"Hotel") (the term "Hotels"  also includes any  additional or substitute  Hotels
given to Bank as security for the Loan),  along with all tangible and intangible
personal property used in connection with the operation of said Hotels; and

     WHEREAS,  Borrower  owns 100% of the  capital  stock of E&P REIT  Trust,  a
Maryland real estate  investment trust ("E&P Trust"),  and Humphrey  Hospitality
REIT Trust, a Maryland real estate  investment trust ("Humphrey  Trust"),  which
are the  general  partners  of E&P  Financing  Limited  Partnership,  a Maryland
limited partnership ("E&P"),  and Humphrey  Hospitality Limited  Partnership,  a
Virginia limited partnership ("HHLP"), respectively. Humphrey Trust owns 100% of
the capital stock of TRS Leasing,  Inc., a Virginia corporation ("TRS Leasing").
E&P and HHLP (E&P and HHLP, and any other future owner of any of the Hotels,  or
any Hotel given as additional  Collateral or substituted  for an existing Hotel,
are  collectively  referred to as the "Hotel  Owners")  are the  respective  fee
owners of the Hotels,  as set forth on Exhibit  "A".  The Hotel Owners lease the
Hotels to TRS Leasing pursuant to that certain First Amended and Restated Master
Lease Agreement dated as of November 26, 2002 (the "Lease").  The Borrower,  the
Hotel Owners and TRS Leasing are referred to in this Agreement on a consolidated
basis as the "Humphrey Entities."

     WHEREAS,  in connection with its  obligations as lessee of the Hotels,  TRS
Leasing is the franchisee under those certain franchise  agreements with Super 8
Motels,  Inc. and Choice  Hotels  International,  Inc.,  which are  described on
Exhibit  "B"  attached  hereto  and   incorporated   herein  by  this  reference
(collectively, the "Franchise Agreements"); and

     WHEREAS,  the Loan is subject to the terms and conditions set forth in this
Agreement and in the other Loan  Documents and Borrower  knows and  acknowledges
that Bank is relying on this Agreement,  and the other Loan Documents, in making
the Loan.

     For good and valuable  consideration,  the receipt and sufficiency of which
are hereby acknowledged, the Borrower and the Bank hereby agree as follows:

                                    AGREEMENT

                                    ARTICLE I
                           AMOUNT AND TERM OF THE LOAN

     1.01.  The Loan. The Bank agrees,  on the terms and conditions  hereinafter
set forth,  to loan to the Borrower,  by means of one or more advances made from
time to time during the period of time from the date  hereof,  to and  including
the  earlier of  January  13,  2007 (the  "Maturity  Date"),  or the date of the
occurrence of an Event of Default (as  hereinafter  defined),  not to exceed the
lesser of the Borrowing  Base (as  hereinafter  defined) or the principal sum of
Twenty-Two Million and no/100ths Dollars  ($22,000,000) (the "Initial Loan Limit
Amount"),  which Initial Loan Limit Amount will be reduced to Twenty Million and
no/100ths Dollars ($20,000,000) (the "Step-Down Loan Limit Amount") on the first
day of the thirteenth full month after the date hereof (the "Step-Down Effective
Date") (the lesser of the Borrowing  Base,  the Initial Loan Limit Amount or the
Step-Down Loan Limit Amount, as applicable,  is collectively  referred to as the
"Loan").  The books and  records of the Bank  shall,  in the absence of manifest
error,  be prima  facie  evidence  in any court or other  proceeding  brought to
enforce the Note (as  hereinafter  defined) as to the  principal  balance of the
Loan outstanding at any time and the amount of accrued interest.

     1.02.  The Note.  The Loan made by Bank shall be  evidenced by a promissory
note (the  "Note")  of even date  herewith  payable  to the order of Bank in the
original principal amount set forth in Section 1.01 above.

     1.03. Use and Application of Loan Proceeds. The entire proceeds of the Loan
shall be used for the following purposes:

          (A)  Pay-off at closing of  existing  indebtedness  owed to U.S.  Bank
     National Association, a national banking association ("US Bank"), through a
     revolving credit facility and term loan.

          (B) Provide operating funds for Borrower.

          (C) Provide interim funding for the acquisition of hotel properties by
     Borrower.

Borrower agrees that the proceeds of the Loan shall be used as described in this
Section 1.03 and shall not be used for any other purpose.

     1.04. Advance of Funds.

          (A)  Manner  of Making  Advances.  If the  Borrower  is  eligible  for
     advances upon the Note and if, at the time of the advance,  all  conditions
     to making an advance of funds have been  satisfied,  funds will be advanced
     as  provided  in this  Section  1.04(A)  or as the  Borrower  and  Bank may
     otherwise agree from time to time.

               (1)  Advances  will be made from  time to time to the  Borrower's
          Operating Account (as defined in Section 4.01(E)) as necessary so that
          the Operating  Account will, at all times,  have an account balance of
          $100,000 in collected funds. In the event the balance in the Operating
          Account exceeds  $100,000 at the close of business on any Business Day
          (as defined in Section 1.10),  the excess amount over $100,000 in such
          Operating  Account shall be withdrawn  from the  Operating  Account by
          Bank and applied  toward  payment of the  principal  amount due on the
          Loan.

               (2) Advances will also be made from time to time upon the written
          request for an advance by Borrower to Bank.

          (B)  Limitations  on  Advances.   Notwithstanding   anything  in  this
     Agreement to the contrary,  no advance shall be made or permitted hereunder
     which would result in the unpaid principal  balance of the Note,  including
     any advances made under the Security Documents hereunder,  exceeding in the
     aggregate at any one time the lesser of: (i) the  Borrowing  Base,  or (ii)
     the  Initial  Loan Limit  Amount or the  Step-Down  Loan Limit  Amount,  as
     applicable. No advance shall be made upon the occurrence and continuance of
     any Event of Default described in Section 5.01 below. Any recordation of an
     advance  by the Bank on the  Note,  the  reverse  side of the  Note,  or on
     supplemental  sheets  attached  to the Note,  or  otherwise  on the  Bank's
     records,  made pursuant to this Agreement  shall be prima facie evidence in
     any court or other proceeding brought to enforce the Note that the Borrower
     has  authorized  the  Bank to make  such  advances  and  that  the Bank has
     effected such advances.  The advance will be deemed to be at the request of
     and for the benefit of Borrower when  credited to  Borrower's  account with
     Bank or when advanced in accordance with the  instructions of an authorized
     representative  of  Borrower.   Bank  may  establish  a  cut-off  time  for
     requesting  advances,  with  requests made after that time being treated as
     made the next Business Day of Bank.

     1.05. Repayment and Interest.

          (A) Interest Rate. The unpaid principal  balance of the Loan will bear
     interest from the date of execution of the Note at the national  prime rate
     of interest as published in the Wall Street Journal (base rate on corporate
     loans  posted by at least 75% of the nation's  thirty (30) largest  banks),
     which rate of interest  shall be adjusted daily as said national prime rate
     of  interest  changes.  (As  applicable  to the  interest  rate during such
     period,  the "Interest  Rate").  Such  adjustment in the Interest Rate will
     occur without prior notice to Borrower.  Changes in the Interest Rate shall
     be  effective  from the date of the changes and shall be applied to amounts
     outstanding on the Loan.

          (B)  Repayment.  Borrower shall repay the aggregate  unpaid  principal
     amount of the Loan plus interest accrued thereon as follows:

               (1)  Borrower  shall pay  interest  only on the unpaid  principal
          balance from time to time outstanding, with such payments beginning on
          the first  Business Day of the calendar  month  following the month in
          which closing  occurs and continuing on the first Business Day of each
          month thereafter until such time as the entire principal amount of the
          Loan has been paid in full.

               (2)  Borrower  shall  pay,  on  the  Step-Down   Effective  Date,
          sufficient principal to reduce the outstanding unpaid principal amount
          of the Loan to the  Step-Down  Loan  Limit  Amount if the  outstanding
          unpaid  principal  balance  exceeds the Step-Down Loan Limit Amount on
          the Step-Down Effective Date.

               (3) If at any time the unpaid principal balance on the Note shall
          exceed the maximum  principal  amount  allowed under the Loan and this
          Agreement,  Borrower shall pay to Bank, upon oral or written demand by
          Bank, an amount equal to the difference  between the then  outstanding
          principal balance of the Loan and the maximum principal amount allowed
          under the Loan.

               (4)  Payments  of the  unpaid  principal  shall be made  from the
          Borrower's Operating Account as provided in Section 1.04(A)(1).

               (5)  Borrower  shall  pay all  remaining  unpaid  principal,  all
          accrued and unpaid  interest,  any unpaid Non-Usage Fee (as defined in
          Section  1.06),  and all other  unpaid  fees and charges due under the
          Loan Documents on or before the Maturity Date.

     Bank  shall be  authorized  to  withdraw  funds from  Borrower's  Operating
     Account to make any of the payments  referred to above,  but the failure or
     refusal  of Bank to do so shall not  excuse or extend  the due date for any
     such payment.  Bank agrees that on each annual anniversary date of the date
     of this Agreement  during the term of this Loan, it will review the Loan to
     determine  if the Bank will  extend  the  Maturity  Date for an  additional
     twelve (12) month  period,  which  decision will be made at the Bank's sole
     discretion.  If the Bank so elects,  Bank will  notify  Borrower in writing
     that Bank has made such  election,  stating in such notice the new Maturity
     Date for repayment of all principal and interest. If Bank does not elect to
     extend such dates,  then the Maturity  Date will remain as provided in this
     Agreement or as previously extended by Bank, as applicable.  Failure of the
     Bank to give notice of any extension as provided  herein shall mean that an
     extension of the Maturity Date has not been granted.

          (C) Prepayment.  If Borrower repays this Loan in full prior to January
     13,  2007 and  requests  a release of all,  or  substantially  all,  of the
     Collateral  given  to  secure  the  Loan,  Borrower  shall  pay  to  Bank a
     prepayment fee of $100,000 (the "Prepayment  Fee"),  which will be added to
     the then  unpaid  principal  balance  as of the  payoff  date.  Other  than
     Borrower's  obligation  to pay any Non-Usage  Fee and the  Prepayment  Fee,
     Borrower may pay all or a portion of the amount owed earlier than it is due
     without  premium or penalty.  Early payments will not,  unless agreed to by
     Bank in writing,  relieve Borrower of Borrower's  obligation to continue to
     make payments as required in this  Agreement.  Borrower  agrees not to send
     Bank  payments  marked  "paid in  full,"  "without  recourse,"  or  similar
     language.  If  Borrower  sends such a  payment,  Bank may accept it without
     losing any of Bank's rights under the Note or this Agreement,  and Borrower
     will remain obligated to pay any further amount owed to Bank.

          (D)  Default  Rate.  On any  overdue  principal  amount  of the  Loan,
     Borrower  shall pay to the Bank interest on demand at the Default Rate from
     the date such  amount  becomes due to the date such amount is paid in full,
     but in no event shall the Default Rate exceed the highest rate permitted by
     applicable  law.  The  "Default  Rate" is a rate equal to four percent (4%)
     over the Interest Rate then in effect.

          (E) Usury.  It is the  intention of the Bank and the  Borrower  hereof
     that the  Note and this  Agreement  and all  provisions  hereof  and of all
     documents  securing the Note conform in all respects to  applicable  law so
     that no payment of interest  or other sum  construed  to be interest  shall
     exceed the highest  lawful rate  permissible.  In  determining  the rate of
     interest paid or payable under this Agreement and the Note or any documents
     securing the same, all funds paid or to be paid as interest or construed to
     be interest  shall be prorated,  allocated,  or spread as  permitted  under
     applicable law. If, through any circumstances, the contract of the Borrower
     and the Bank would result in exceeding  the highest  lawful  interest  rate
     applicable to this transaction, or if the Borrower pays any sum as interest
     or construed to be interest in excess of such rate,  then, ipso facto,  (i)
     the amount  contracted  for shall be  automatically  reduced to the highest
     lawful rate authorized for this transaction,  and (ii) the amount of excess
     interest paid shall be applied to the reduction of the principal balance of
     the Note,  if any, and if the  principal  balance has been fully paid,  the
     excess  interest  shall be refunded to the Borrower and Borrower  agrees to
     accept such refund. Thereupon, the Bank shall not be subject to any penalty
     provided for the  contracting  for,  charging,  or receiving of interest in
     excess of such highest lawful rate, regardless of when or the circumstances
     under which such refund or application was made.

     1.06  Non-Usage  Fee.  Beginning on January 14, 2006 and  continuing to and
including the Maturity  Date,  Borrower will incur a fee at the rate of .25% per
annum  computed  on the  average  of the  unused  portion  of the  Loan  for the
preceding  three (3) months (the  "Non-Usage  Fee").  The Non-Usage Fee shall be
paid on April 1,  2006,  on the  first  Business  Day of each  calendar  quarter
thereafter and on the Maturity Date.

     1.07 Borrowing Base. At no time shall the unpaid  principal  balance of the
Note  exceed the lesser  of: (i) an amount  equal to 60% of the total  appraised
value of the  Hotels,  or (ii) an amount that would  result in a Revolving  Loan
Debt Service  Coverage Ratio (as defined in Section 4.01(G)) of less than 1.5 to
1 (the  "Borrowing  Base").  For purposes of determining the Borrowing Base, the
Bank shall utilize the appraisals prepared in connection with this Loan, or such
appraisals  as may be obtained by Bank from time to time during the term of this
Loan.  If, at any  time,  the then  outstanding  principal  balance  of the Note
exceeds the Borrowing Base,  Borrower will pay to Bank the amount of such excess
upon demand by the Bank.

     1.08. Costs of Loan.  Borrower shall pay to Bank all costs of recording any
of the Security Documents herein mentioned, all title insurance policy premiums,
the reasonable  attorney's  fees Bank has incurred in connection  with the Loan,
the cost of obtaining any  appraisal,  survey,  assessment,  report,  statement,
legal opinion or other document required to be furnished by Borrower pursuant to
this Agreement,  and all other reasonable and ordinary expenses  associated with
this Loan.

     1.09. Payments and Computations. Borrower shall make each payment hereunder
and under the Note not later than 1:00 p.m.  (Central  time) on the Business Day
when due in lawful  money of the  United  States of  America  to the Bank at its
address set forth above in same day funds.  Borrower hereby authorizes the Bank,
if and to the extent  payment is not made when due hereunder and under the Note,
to charge  any  amount  so due from  time to time  against  any  account  of the
Borrower with the Bank.  All  computations  of interest  hereunder and under the
Note shall be made by the Bank on the basis of a year of 360 days for the actual
number of days (including the first day but excluding the last day) elapsed.

     1.10.  Payment  on  Non-Business  Days.  Whenever  any  payment  to be made
hereunder or under the Note shall be stated to be due on a Saturday, Sunday or a
public or bank  holiday  in Omaha,  Nebraska  (any  other day being a  "Business
Day"),  such payment may be made on the next  succeeding  Business Day, and such
extension of time shall in such case be included in the  computation  of payment
of interest.

     1.11 Substitution and Addition to Collateral.  Subject to the prior written
approval  of the  Bank,  which  approval  shall  not be  unreasonably  withheld,
Borrower may substitute Hotels,  obtain the release of Hotels, and add Hotels to
maintain  compliance with, or cure any noncompliance  with, any of the covenants
set forth in Article IV of this Agreement. At the time of making any request for
approval, the Borrower shall satisfy the conditions precedent in Article II with
respect to any  substituted or added Hotels.  In the event the proposed added or
substituted  Hotel  was  acquired  more than two  years  before  the date of the
proposed  addition or  substitution,  Borrower will provide to Bank, at the time
Borrower  requests  the  addition or  substitution,  an  appraisal of the Hotel,
prepared by a duly licensed appraiser reasonably acceptable to Bank and which is
not more than two (2) years  old,  showing  the fair  market  value of the Hotel
proposed  for  addition  or  substitution.  The Bank shall have thirty (30) days
after the  request  for  approval  by the  Borrower  to  determine  if the Hotel
proposed to be  substituted or added is of  appropriate  character,  quality and
value.  Any request to add Hotels to cure any  noncompliance  with any covenants
set forth in Article IV shall be made within the thirty (30) day period provided
herein to cure any  noncompliance  with this  Agreement.  Once Bank approves any
substituted or added Hotel,  Borrower shall have thirty (30) days  thereafter to
comply with the  requirements of Article IV with respect  thereto.  Any proposed
substituted  or  added  Hotel  shall  not  be  included  in the  Borrowing  Base
computation or used in determining  compliance  with the covenants in Article IV
until such time as Bank agrees to accept such Hotel as additional or substituted
Collateral.  The time limits stated herein for adding or substituting  Hotels as
Collateral shall not extend the time for cure of Events of Default by Borrower.

                                   ARTICLE II
                              CONDITIONS PRECEDENT

     2.01. Condition Precedent to Advances Under the Loan. The obligation of the
Bank to close this Loan and to make any advance under the Loan is subject to the
Bank having received all of the following,  in form satisfactory to Bank and the
following conditions precedent being performed to the reasonable satisfaction of
Bank, at the time of closing and at the time Borrower requests each advance,  as
applicable:

          (A) Borrower  shall have duly  executed and delivered to Bank the Note
     evidencing the Loan payable to the order of the Bank.

          (B) Deeds of trust, mortgages, and assignments of rents, duly executed
     and acknowledged,  from the respective Hotel Owners as set forth on Exhibit
     "A" to and in favor of Bank,  which  encumber each of the Hotels and secure
     the Note together with all other  obligations  of Borrower to Bank pursuant
     to the terms of this  Agreement.  Said deeds of trust and  mortgages  shall
     create first liens and encumbrances on the Hotels,  subject only to current
     non-delinquent  real estate taxes as to each Hotel. Such deeds of trust and
     mortgages  shall include any easement  rights in favor of the Hotel Owners.
     Bank shall determine,  in its discretion,  as to whether a deed of trust or
     mortgage will be utilized as to any Hotel.

          (C) Security  agreements and UCC-1  financing  statements,  including,
     where required by Bank,  fixture  filings for each Hotel,  duly executed by
     Borrower,  TRS Leasing and by each Hotel Owner of record,  granting to Bank
     under the Uniform Commercial Code (the "UCC"), a first security interest in
     all tangible and intangible personal property and fixtures of Borrower, TRS
     Leasing and the Hotel Owners  located at the Hotels or used  exclusively in
     connection therewith,  including but not limited to, inventory,  equipment,
     fixtures, accounts and general intangibles of Borrower, TRS Leasing and the
     Hotel Owners, and in the Operating Account,  whether now owned or hereafter
     acquired, and in the proceeds of the same (all such property and the Hotels
     are  collectively   referred  to  as  the  "Collateral").   Such  financing
     statements  shall be  prepared in a manner  that  allows  recording  in the
     appropriate  governmental  recording  offices to create such first security
     interest in the Collateral.

          (D)  Agreements  concerning  the  Franchise  Agreements  with estoppel
     certifications,  described on Exhibit "B", duly executed by TRS Leasing and
     the franchisor of each Hotel,  to and in favor of Bank,  among other things
     assigning to Bank all of TRS Leasing's right,  title and interest in and to
     the Franchise Agreements.

          (E) Letter Agreement among Royal Host  Management,  Inc., Bank and TRS
     Leasing   pertaining  to  the  Management   Agreement  between  Royal  Host
     Management,  Inc.  and TRS  Leasing,  dated  August 1,  2004,  ("Management
     Agreement")  granting  to Bank  certain  rights  regarding  the  Management
     Agreement, and containing estoppel certifications.

          (F)  Environmental  indemnity  agreement  duly  executed by Bank,  TRS
     Leasing and by each Hotel  Owner,  in form and  substance  satisfactory  to
     Bank, agreeing to indemnify Bank from any loss or damage arising out of the
     environmental conditions specified in such agreement.

          (G)  Subordination,   nondisturbance  and  attornment  agreement  duly
     executed  by TRS  Leasing,  Borrower  and  each  Hotel  Owner  in form  and
     substance satisfactory to Bank.

          (H) Estoppel  certificate  duly  executed by TRS Leasing,  in form and
     substance satisfactory to Bank, pertaining to the Lease.

          (I) Non-foreign  mortgager  (FIRPTA)  certificate  for Borrower,  E&P,
     HHLP, and TRS Leasing.

          (J) Duly certified corporate resolutions, consents, authorizations and
     powers of attorney of Borrower  evidencing the authority of the officers of
     Borrower to execute and deliver on behalf of Borrower this  Agreement,  the
     Note, any of the Security Documents and other Loan Documents to be executed
     by Borrower and to execute and deliver any of the other documents  required
     to be executed by Borrower  under this  Agreement or otherwise as a part of
     this Loan.

          (K) Duly certified resolutions, consents, authorizations and powers of
     attorney or other showing of authority satisfactory to Bank, evidencing the
     authority  of the  officers  of each Hotel  Owner to execute and deliver on
     behalf of the Hotel  Owners any of the  Security  Documents  and other Loan
     Documents to be executed by such Hotel  Owners,  and to execute and deliver
     any of the other  documents  required to be  executed by such Hotel  Owners
     under this Agreement or otherwise as a part of this Loan.

          (L) Duly certified resolutions, consents, authorizations and powers of
     attorney or other showing of authority  satisfactory to Bank evidencing the
     authority  of the  officers of TRS Leasing to execute and deliver on behalf
     of TRS Leasing any of the Security Documents to be executed by TRS Leasing,
     and to execute and deliver any of the other documents to be executed by TRS
     Leasing under this Agreement or otherwise as a part of this Loan.

          (M)  Certified  articles of  incorporation  and bylaws of Borrower and
     certificate of good standing  (issued within two months of the date of this
     Agreement) from the State of Virginia.

          (N)  Certified   certificate  of  limited   partnership   and  limited
     partnership  agreement for HHLP and  certificate  of good standing  (issued
     within  two  months  of the  date of this  Agreement)  from  the  State  of
     Virginia.

          (O)  Certified   certificate  of  limited   partnership   and  limited
     partnership  agreement for E&P and  certificate  of good  standing  (issued
     within  two  months  of the  date of this  Agreement)  from  the  State  of
     Maryland.

          (P) Certified  articles of incorporation and bylaws of TRS Leasing and
     certificate of good standing  (issued within two months of the date of this
     Agreement) from the State of Virginia.

          (Q)  Organizational  documents of any other subsidiary or affiliate of
     Borrower  and/or  consents,  resolutions,   authorizations  and  powers  of
     attorney  of such  subsidiaries  or  affiliates  showing the  authority  of
     officers,  general  partners,  limited partners or members (as the case may
     be) to execute  and  deliver  any of the Loan  Documents  on behalf of such
     entity, as required by the Bank to properly  authorize the Loan transaction
     described herein or as required by any title company in connection with the
     title insurance policies contemplated herein.

          (R)   Complete   copies   of   Phase   I   Environmental   Assessments
     ("Assessments") for each Hotel, prepared by environmental  assessment firms
     satisfactory  to Bank,  together  with a  letter  from  each  environmental
     assessment firm preparing such  Assessment  stating that Bank can rely upon
     such Assessment in connection with the Loan. Bank may obtain  environmental
     data reports  ("EDR")  updating such  Assessments to the current date. Such
     Assessments  and EDRs  shall  show that  none of the  Hotels  contains  any
     hazardous  materials,  underground  storage  tanks or other  conditions  or
     operations that may create future environmental liability.

          (S) An ALTA survey of the real  property for each Hotel,  satisfactory
     to Bank, prepared by a registered land surveyor,  certified to Bank and the
     title  company  issuing  the  title  insurance  for the Hotel  (the  "Title
     Company"),  or for which Bank and the Title  Company has  received a letter
     from the surveyor  preparing the survey or, if such original surveyor is no
     longer  in  business,   another   registered   land   surveyor   reasonably
     satisfactory  to Bank, that entitles the Bank and the Title Company to rely
     thereon.  Such survey  shall verify all legal  descriptions  of the Hotels,
     show all lot lines, set-back lines, all improvements, all utility lines and
     facilities,  all  easements,  all adjacent  public rights of way and access
     thereto,  current property zoning,  and any other  restrictions or physical
     matters on the site or reflected in the public  records with respect to the
     Hotels.  In the event Bank elects to rely on an existing survey of a Hotel,
     Borrower  shall obtain a letter from each surveying firm that prepared such
     survey,  or another  registered  land surveyor  reasonably  satisfactory to
     Bank,  stating that Bank can rely upon such Survey in  connection  with the
     Loan,  and  shall  provide  to Bank  and the  Title  Company  a  Borrower's
     certificate  that no material changes have occurred to the real property or
     improvements  constituting  the  Hotel in  question  since the  survey  was
     prepared.

          (T) One or more ALTA lender's  policies of title  insurance for all of
     the Hotels, with Bank as the insured, insuring the liens of Bank's deeds of
     trust and mortgages as being first liens on each Hotel, subject only to the
     lien of any unpaid  current real estate taxes.  All standard  exceptions to
     such  policies  shall  be  deleted,  and the  policies  shall  contain  the
     following  endorsements:  Comp 100; Zoning 3.1; Access;  Survey;  Location;
     Contiguity  (if  multiple  lots or  parcels);  Subdivision  Control Act and
     Creditor's  Rights. At Closing,  Bank will receive a "mark-up" of the title
     insurance  commitment for such insurance  showing that (i) all requirements
     for issuance of the policies have been satisfied;  (ii) the Bank's deeds of
     trust and  mortgages  are first  liens on each  Hotel;  (iii) the  standard
     exceptions  to coverage will be deleted from the final  policies;  and (iv)
     the final policy will contain the requested endorsements.

          (U) Independent  written appraisals of the value of each Hotel in form
     and substance satisfactory to Bank, prepared by qualified and licensed real
     estate appraisers.

          (V) Satisfactory  evidence of hazard insurance coverage on each of the
     Hotels as required by the deeds of trust and  mortgages,  and  satisfactory
     evidence of  maintenance  of general  liability,  auto  liability,  workers
     compensation  insurance,  and other  insurance as may be required by any of
     the Loan Documents.

          (W) Current  certificates  of  occupancy  for each Hotel issued by the
     governmental jurisdiction with authority to issue such certificates for the
     Hotels,  or,  if  the  Hotel  is in a  jurisdiction  that  does  not  issue
     certificates of occupancy, a Borrower's certificate signed by an authorized
     officer of the Borrower to that effect.  If the certificate of occupancy is
     lost or  misplaced,  Borrower  shall obtain a copy thereof from the issuing
     authority.

          (X)  Certified  copies of requests  for  information  or copies  (Form
     UCC-11) or equivalent reports, of all effective financing  statements which
     name  Borrower  or any Hotel  Owner or TRS  Leasing as debtor and which are
     filed in the respective  States of organization  of such entities  together
     with  copies of such  financing  statements  (none of which shall cover the
     property  purported  to be covered by the Loan  Documents),  together  with
     releases  and/or  termination  of any security  interest in the  Collateral
     reflected in such request for information.

          (Y) The  Company  shall  have paid to the Bank the  documentation  fee
     previously agreed upon by the parties in the commitment letter for the Loan
     and shall have  reimbursed  Bank for all third party costs incurred by Bank
     in connection with this Loan as provided in Section 6.05 hereof.

          (Z) The favorable opinion of Borrower's  counsel, or local counsel, as
     applicable,  in form satisfactory to Bank and such counsel, dated as of the
     date of closing, that, subject to customary assumptions, qualifications and
     exceptions,  (i) this  Agreement,  the Note and all  other  Loan  Documents
     executed by Borrower  have been duly executed and delivered by the Borrower
     and  constitute  the legal,  valid and binding  obligation of the Borrower,
     enforceable in accordance with their  respective  terms,  (ii) the Security
     Documents  (as  defined  in this  Section  2.01),  when duly  executed  and
     delivered by the entities  obligated to execute such documents  (other than
     Borrower), will constitute the legal, valid and binding obligations of such
     parties  thereto,  enforceable in accordance with their  respective  terms,
     (iii) no  approval  or other  action by any other  person,  entity or court
     shall be required for the due and proper execution and delivery of the Loan
     Agreement,  the Note, the Security  Documents and the other Loan Documents,
     (iv) that the deeds of trust, mortgages and other Security Documents are in
     proper form for recording in appropriate public offices,  (v) that the Loan
     is not  usurious  under  applicable  law,  and (vi) the  priority of future
     advances.

          (AA) Such  documents,  duly executed by one or more of the appropriate
     Humphrey Entities, as are necessary to establish the Operating Account, the
     sweep  authorization  from the local bank  accounts  for each Hotel and the
     advances to, and  repayments  from,  the  Operating  Account of Borrower as
     provided in Section 1.04(A)(1) and 4.01(E) hereof.

          (AB) Such other certificates,  approvals, opinions or documents as the
     Bank or the Title Company may reasonably require.

     All of the  documents  referred  to above  and all  other  documents  to be
     delivered  by the  Borrower  to the Bank  pursuant  to this  Agreement  are
     hereinafter collectively referred to as the "Loan Documents". The documents
     referred to in subparagraphs (B), (C), (D) and (E) of this Section 2.01 are
     collectively referred to as the "Security Documents".

     2.02.  Closing. It is contemplated by the parties that closing of this Loan
shall occur on or before January 13, 2005.

     2.03  Post-Closing  Advances.  Any  advance  made to or for the  benefit of
Borrower  shall be deemed a  reaffirmation  by the  Borrower  at the time of the
advance,  that (i) the  representations and warranties of the Borrower contained
in this Agreement are correct as of such date,  (ii) Borrower,  each Hotel Owner
and TRS Leasing are in compliance with the covenants contained in this Agreement
as of such date and  (iii) no event has  occurred  and is  continuing,  or would
occur as a result of such  advance,  which  constitutes  an Event of Default (as
defined herein) or would  constitute an Event of Default but for any requirement
that notice be given or time elapse or both.

                                   ARTICLE III
                         REPRESENTATIONS AND WARRANTIES

     3.01.   Representations  and  Warranties  of  the  Borrower.  The  Borrower
represents and warrants as follows:

          (A)  Existence  and Good  Standing  of  Borrower.  The  Borrower  is a
     corporation  duly  organized  and  existing  under the laws of the State of
     Virginia  and is in good  standing  as of the  date  hereof.  Borrower  has
     corporate  power and authority to own, lease and operate its properties and
     carry on its business as now conducted.  The Borrower is duly qualified and
     authorized to execute this  Agreement  and the other Loan  Documents and to
     perform the obligations thereof.  Borrower's principal office is located in
     Nebraska.

          (B)  Existence  and Good  Standing  of TRS  Leasing.  TRS Leasing is a
     corporation  duly  organized  and  existing  under the laws of the State of
     Virginia  and is in good  standing as of the date  hereof.  TRS Leasing has
     corporate  power and authority to own, lease and operate its properties and
     carry on its business as now conducted.  TRS Leasing's  principal office is
     located in Nebraska.

          (C)  Existence  and  Good  Standing  of  E & P.  E & P  is  a  limited
     partnership  duly  organized  and  existing  under the laws of the State of
     Maryland and is in good  standing as of the date  hereof.  E&P Trust is the
     general  partner  of E & P and  is a  real  estate  investment  trust  duly
     organized and existing  under the laws of the State of Maryland,  and is in
     good standing as of the date hereof.  E & P has limited  partnership  power
     and  authority to own,  lease and operate its  properties  and carry on its
     business as now conducted. E & P's principal office is located in Nebraska.

          (D) Existence and Good Standing of HHLP. HHLP is a limited partnership
     duly  organized  and  existing  under  the laws of the  State of  Virginia.
     Humphrey  Trust  is the  general  partner  of  HHLP  and  is a real  estate
     investment trust duly organized and existing under the laws of the State of
     Maryland,  and is in good standing as of the date hereof.  HHLP has limited
     partnership  power and authority to own,  lease and operate its  properties
     and carry on its  business as now  conducted.  HHLP's  principal  office is
     located in Nebraska.

          (E) No Conflict for Borrower. The execution,  delivery and performance
     by  Borrower  of this  Agreement,  the other Loan  Documents  and all other
     documents,  to which  Borrower  is a  party,  and the  consummation  of the
     transactions  contemplated  thereby are within the powers of  Borrower  and
     have been duly  authorized by all necessary  action,  does not and will not
     contravene (i) the articles,  bylaws or other  organizational  documents of
     Borrower;  or (ii)  any  law,  rule,  regulation,  order,  writ,  judgment,
     injunction,  decree or any contractual  provision restriction binding on or
     affecting  the  Borrower;  or (iii)  result in or require  the  creation or
     imposition of any lien,  security  interest or other charge or  encumbrance
     (other than pursuant  hereto) upon or with respect to any of the properties
     of the Borrower.

          (F)  No  Conflict  for  Hotel  Owners.  The  execution,  delivery  and
     performance by Hotel Owners of the Loan Documents and all other  documents,
     to which Hotel Owners are a party, and the consummation of the transactions
     contemplated  thereby  are within the powers of Hotel  Owners and have been
     duly authorized by all necessary  action,  does not and will not contravene
     (i) the limited partnership agreement or other organizational  documents of
     any of the Hotel Owners; or (ii) any law, rule,  regulation,  order,  writ,
     judgment,  injunction,  decree  or any  contractual  provision  restriction
     binding on or affecting the Hotel Owners; or (iii) result in or require the
     creation or  imposition of any lien,  security  interest or other charge or
     encumbrance (other than pursuant hereto) upon or with respect to any of the
     properties of the Hotel Owners.

          (G)  No  Conflict  for  TRS  Leasing.  The  execution,   delivery  and
     performance by TRS Leasing of the Loan  Documents and all other  documents,
     to which TRS Leasing is a party,  and the  consummation of the transactions
     contemplated  thereby  are within the powers of TRS  Leasing  and have been
     duly authorized by all necessary  action,  does not and will not contravene
     (i) the articles,  bylaws or other organizational documents of TRS Leasing;
     or (ii) any law,  rule,  regulation,  order,  writ,  judgment,  injunction,
     decree or any contractual provision restriction binding on or affecting TRS
     Leasing;  or (iii) result in or require the creation or  imposition  of any
     lien, security interest or other charge or encumbrance (other than pursuant
     hereto) upon or with respect to any of the properties of TRS Leasing.

          (H) No Authorization,  Etc., for Borrower. No authorization,  consent,
     approval,  license,  or other action by, and no notice to,  registration or
     filing with, any  governmental  authority or regulatory  body is or will be
     required or necessary for the due  execution,  delivery and  performance by
     the Borrower of any Loan Document, or any obligation thereunder.

          (I) No  Authorization,  Etc.,  for  Hotel  Owners.  No  authorization,
     consent,  approval,  license,  or  other  action  by,  and  no  notice  to,
     registration or filing with, any governmental  authority or regulatory body
     is or will be required or  necessary  for the due  execution,  delivery and
     performance  by the Hotel Owners of any Loan  Document,  or any  obligation
     thereunder.

          (J)  No  Authorization,  Etc.,  for  TRS  Leasing.  No  authorization,
     consent,  approval,  license,  or  other  action  by,  and  no  notice  to,
     registration or filing with, any governmental  authority or regulatory body
     is or will be required or  necessary  for the due  execution,  delivery and
     performance  by  TRS  Leasing  of any  Loan  Document,  or  any  obligation
     thereunder.

          (K)  Enforceability as to Borrower.  This Agreement is, and each other
     Loan  Document to which the  Borrower is or will be a party when  delivered
     hereunder  will be legal,  valid and binding  obligations  of the  Borrower
     enforceable against the Borrower in accordance with their respective terms,
     except  as  such  enforcement  may  be  qualified  or  limited  by  general
     principles  of equity or  bankruptcy,  insolvency,  or other  similar  laws
     affecting creditor's rights in general.

          (L) Enforceability as to Hotel Owners. Each Loan Document to which the
     Hotel Owners are or will be a party when delivered hereunder will be legal,
     valid and binding  obligations of the Hotel Owners enforceable  against the
     Hotel Owners in  accordance  with their  respective  terms,  except as such
     enforcement may be qualified or limited by general  principles of equity or
     bankruptcy,  insolvency,  or other similar laws affecting creditor's rights
     in general.

          (M) Enforceability as to TRS Leasing.  Each Loan Document to which TRS
     Leasing is or will be a party when delivered hereunder will be legal, valid
     and binding  obligations of TRS Leasing  enforceable against TRS Leasing in
     accordance with their respective  terms,  except as such enforcement may be
     qualified  or  limited  by  general  principles  of equity  or  bankruptcy,
     insolvency, or other similar laws affecting creditor's rights in general.

          (N) Financial  Information.  All financial information provided to the
     Bank by or on  behalf  of the  Humphrey  Entities  fairly  presents  in all
     material respects the financial  condition of the Humphrey Entities at such
     date and the results of the  operations  of the  Humphrey  Entities for the
     periods  indicated  therein,  all in  accordance  with  generally  accepted
     accounting principles  consistently applied, and since the date of delivery
     of such  information  there  has been no  material  adverse  change in such
     condition or operations.

          (O) No Litigation.  Except as previously disclosed to Bank at the time
     this  Agreement  was  executed,  there  is no  pending  or,  to the best of
     Borrower's  knowledge  threatened,  suit,  action (including any derivative
     action), investigation or proceeding affecting the Humphrey Entities before
     any court,  governmental  agency,  commission or authority,  or arbitrator,
     domestic  or  foreign,  which  would,  either  in any  one  case  or in the
     aggregate,  have a material  adverse  effect on the financial  condition or
     operations of the Humphrey Entities or the ability of the Humphrey Entities
     to pay and perform their obligations under the Loan Documents.

          (P) Franchise Agreements. All Franchise Agreements for the Hotels have
     been duly  executed  by all parties  thereto  and are the legal,  valid and
     binding obligation of the parties thereto. Such Franchise Agreements are in
     full force and effect and are not in default.

          (Q) Management Agreement.  The management agreement for the Hotels has
     been duly  executed by all  parties  thereto,  and is the legal,  valid and
     binding obligation of the parties thereto.  Such management agreement is in
     full force and effect and is not in default.

          (R) Lease.  The Lease between TRS Leasing and the Hotel Owners for the
     Hotels has been duly  executed  by all parties  thereto,  and is the legal,
     valid and binding obligation of the parties thereto.  Such Lease is in full
     force and effect and is not in default.

          (S)  Unpaid  Bills.  There are no  overdue  unpaid  bills in excess of
     $10,000 (other than those bills being  contested in good faith) owed to any
     person or entity for labor or materials  furnished for any Hotel that could
     give  rise  to a  construction  lien,  mechanics  lien  or  other  lien  or
     encumbrance  upon any Hotel.  In the event TRS or any Hotel Owner wishes to
     contest in good faith any mechanics lien or  construction  lien that may be
     filed against any Hotel,  TRS or such Hotel Owner as applicable  shall,  if
     requested  by Bank,  obtain the release of record of such lien against such
     Hotel by filing the appropriate bond or deposit as required by law.

          (T) Margin Stock. Borrower is not engaged in the business of extending
     credit for the purpose of purchasing  or carrying  margin stock (within the
     meaning of  Regulation  U issued by the Board of  Governors  of the Federal
     Reserve  System),  and no  proceeds of any Loan will be used to purchase or
     carry any margin  stock or to extend  credit to others  for the  purpose of
     purchasing or carrying any margin stock.

          (U) Other  Obligations.  Neither  Borrower,  any Hotel Owner,  nor TRS
     Leasing is in default on any  obligation  for  borrowed  money in excess of
     $100,000,  any purchase money obligation in excess of $100,000 or any other
     material lease, commitment, contract, instrument or obligation in excess of
     $100,000.

          (V)  Taxes.  Other  than  matters  being  contested  in good faith and
     disclosed to Bank,  Borrower,  each Hotel Owner and TRS Leasing  have:  (i)
     filed all tax returns  (federal,  state and local) required to be filed and
     have  paid all  taxes  shown  thereon  to be due,  including  interest  and
     penalties,  or have provided adequate reserves for the payment thereof, and
     (ii) paid,  prior to delinquency,  all taxes,  assessments and governmental
     charges  of any  nature  levied  or  assessed  upon any of the  Collateral.
     Borrower is not aware of any  proposed  assessment  or  adjustment  for any
     taxes (or any basis for any such assessment) which would be material to the
     Humphrey Entities, except as have been disclosed in writing to the Bank.

          (W)  Compliance  with  Laws.  To the  best  of  Borrower's  knowledge,
     Borrower,  the Hotel Owners and TRS Leasing have  complied  with and are in
     compliance with all federal, state and local laws, ordinances,  regulations
     and  codes  applicable  to  their  business  and  their   properties,   the
     noncompliance  with which would,  either in any one case or the  aggregate,
     have a material adverse effect on the financial  condition or operations of
     any of the  Humphrey  Entities.  There  are no  pending  or, to the best of
     Borrower's   knowledge,   threatened  citations,   sanctions,   actions  or
     proceedings  of any nature for any claimed  violation of any building code,
     life safety code,  accessibly  requirements or any other  governmental law,
     ordinance,  regulation  or code  governing  the Hotels or the use  thereof,
     which  would,  either  in any one case or the  aggregate,  have a  material
     adverse  effect on the  financial  condition or  operations of the Humphrey
     Entities..

          (X) Title to  Collateral.  The Hotel  Owners have good and  marketable
     title to all of the Hotels, free and clear of all encumbrances,  except (i)
     liens in favor of the Bank,  (ii) liens in favor of U.S.  Bank securing the
     existing indebtedness to be paid at closing from Loan proceeds and released
     following  closing,  and (iii) the  current  portion of unpaid  real estate
     taxes or such taxes  being  contested  in good faith as  permitted  by this
     Agreement.  Borrower,  the Hotel  Owners and TRS Leasing each have good and
     marketable  title to all of the  other  Collateral,  free and  clear of all
     encumbrances, except (i) liens in favor of the Bank, (ii) liens in favor of
     U.S.  Bank  securing the existing  indebtedness  to be paid at closing from
     Loan proceeds and released  following  closing,  and (iii)  purchase  money
     liens  incurred for the purchase of the personal  property that is given as
     security for such purchase money lien, in an original  amount not exceeding
     the sale price of the property.

          (Y)  Securities  Compliance.  Borrower has filed all required  filings
     with the United States Securities and Exchange Commission ("SEC") and is in
     compliance  with all federal and state  securities  laws  applicable to it,
     including,  but not limited to, the requirements of the Sarbanes-Oxley Act,
     the  noncompliance  with  which  would,  either  in  any  one  case  or the
     aggregate,  have a material  adverse  effect on the financial  condition or
     operations  of any of the  Humphrey  Entities.  All  outstanding  stock and
     securities of Borrower are duly authorized,  validly issued, fully paid and
     non-assessable.  All stock and securities of Borrower have been offered and
     sold  in  compliance  with  all  federal  and  state  securities  laws  and
     regulations  and with  other  requirements  of  federal  and state laws and
     regulations  applicable thereto, the noncompliance with which would, either
     in any one case or the  aggregate,  have a material  adverse  effect on the
     financial condition or operations of any of the Humphrey Entities.

          (Z)  Hazardous  Substances.  There has not been,  during the period of
     ownership of the  Collateral by Borrower,  the Hotel Owners or TRS Leasing,
     nor is there now,  any  material  use,  generation,  manufacture,  storage,
     treatment,  disposal,  release  or  threatened  release  of  any  Hazardous
     Substances  by any  person or entity  on,  under or about the Hotels or any
     other Collateral.  Borrower has no knowledge of, or reason to believe, that
     there has been:  (i) a breach or violation of any  Environmental  Laws with
     respect to any of the  Collateral  or with respect to  Borrower,  the Hotel
     Owners or TRS Leasing,  the breach or  violation of which would,  either in
     any one  case or the  aggregate,  have a  material  adverse  effect  on the
     financial condition or operations of any of the Humphrey Entities; (ii) any
     material  use,  generation,   manufacture,  storage,  treatment,  disposal,
     release or  threatened  release of any  Hazardous  Substances  by any prior
     owner  under or about  the  Hotels or any  other  Collateral;  or (iii) any
     actual  or  threatened  litigation,  claim,  assessment  or  administrative
     proceeding  of any  nature  relating  to  such  matters.  As  used  in this
     Agreement,  the term  "Hazardous  Substances"  shall mean  materials  that,
     because  of  their  quantity,   concentration  or  physical,   chemical  or
     infectious characteristics, may cause or pose a present or potential hazard
     to human health or the environment when improperly used, treated,  disposed
     of,  generated,   manufactured,   transported  or  otherwise  handled,  and
     includes,  without limitation, any and all hazardous or toxic substances or
     materials,  as defined or listed under any of the  Environmental  Laws, and
     includes petroleum and its by-products. As used in this Agreement, the term
     "Environmental  Laws"  means any and all  federal,  state  and local  laws,
     regulations,  ordinances  and codes  relating  to the  protection  of human
     health   and  the   environment,   including,   without   limitation,   the
     Comprehensive  Environmental  Response,  Compensation  and Liability Act of
     1980,  as  amended,  42  U.S.C.  Section  9601,  et seq.,  ("CERCLA"),  the
     Superfund  Amendments and  Reauthorization  Act of 1986, Pub. L. No. 99-499
     ("SARA"),  the Hazardous Materials  Transportation  Act, 49 U.S.C.  Section
     1801,  et seq.,  the  Resource  Conservation  and  Recovery  Act, 42 U.S.C.
     Section 6901, et seq., or other applicable federal or state law, regulation
     or rule.

          (AA) Solvency.  Each of Borrower, the Hotel Owners and TRS Leasing are
     able to pay  their  respective  debts as they  become  due,  and  after the
     execution  and  delivery  of the Loan  Documents  and  consummation  of the
     transaction contemplated thereby, will remain solvent.

          (AB) No Condemnation.  There is no proceeding  pending or, to the best
     of Borrower's  knowledge,  threatened for the total or partial condemnation
     of any Hotel.

                                   ARTICLE IV
                                    COVENANTS

     4.01.  Affirmative  Covenants of Borrower.  Unless the Bank shall otherwise
consent in writing,  which such consent shall not be unreasonably  withheld,  so
long as any amounts payable hereunder or under the Note shall remain unpaid, the
Borrower,  the Hotel Owners and TRS Leasing  (except  where any of the covenants
specifically  requires  compliance by only one, or less than all of the Humphrey
Entities, then only as to the specified entity) will each:

          (A) Compliance with Laws,  Etc.  Comply in all material  respects with
     all applicable  laws,  rules,  regulations  and orders,  such compliance to
     include,  without limitation of the generality of the foregoing: (i) paying
     before the same become  delinquent all taxes,  assessments and governmental
     charges  imposed  upon  it or  upon  its  property,  except  to the  extent
     contested in good faith, and (ii) compliance with Environmental Laws.

          (B)  Records.  Keep  adequate  records  and books of  account in which
     complete  entries  will be  made  in  accordance  with  generally  accepted
     accounting  principles  consistently  applied,   reflecting  all  financial
     transactions  of the Borrower,  each Hotel Owner and TRS Leasing.  Separate
     books and records shall be maintained for each of the Hotels.

          (C) Inspection  Rights.  At any reasonable  time and from time to time
     during  regular  business  hours  of  Borrower,  permit  the  Bank,  or any
     officers, employees, agents or representatives thereof, to examine and make
     copies of, or abstracts  from,  the records and books of account of, and to
     visit the Hotels, at the cost and expense of the Borrower.

          (D) Reporting Requirements. Furnish to the Bank:

               (1) as soon as reasonably  possible  after the filing thereof and
          no later  than  forty-five  (45)  days  after  the end of each  fiscal
          quarter,  each Form  10-Q  filed by the  Borrower  with the SEC and an
          operating statement for each Hotel for the applicable quarter.

               (2) as soon as reasonably  possible after the receipt thereof and
          no later  than one  hundred  twenty  (120)  days after the end of each
          fiscal year, the audited annual consolidated  financial  statements of
          the Humphrey  Entities for such fiscal year,  including balance sheets
          and  statements of income and retained  earnings for such fiscal year,
          prepared by an  independent  certified  public  accountant  reasonably
          acceptable  to Bank and an operating  statement for each Hotel for the
          applicable year;

               (3) not  later  than 45 days  after  submission  to the  Internal
          Revenue Service, a full and complete copy of Borrower's federal income
          tax return for each tax year for Borrower.

               (4) promptly after the filing or receipt  thereof,  copies of all
          documents  reflecting any material claims or litigation  affecting the
          Humphrey  Entities or any of the Hotels which,  either alone or in the
          aggregate,  would  reasonably  be expected to have a material  adverse
          effect on the Borrower, its operations or any of the Hotels;

               (5)  promptly,  upon the  occurrence of an Event of Default or an
          event that but for the passage of time or the giving of notice or both
          would constitute an Event of Default,  notice of such Event of Default
          or event; and

               (6) as soon as possible and in any event within 45 days after the
          end of each  fiscal  quarter of  Borrower,  the  capital  expenditures
          report referred to in Section 4.01(F).

               (7)  such  other   information   respecting   the   condition  or
          operations,  financial or otherwise,  of the Humphrey  Entities as the
          Bank may from time to time reasonably request.

     All  financial  reports  to be  delivered  to Bank  shall  be  prepared  in
     accordance  with  generally  accepted   accounting   principles  which  are
     consistently applied.

          (E)  Deposit  Relationship.  Borrower  shall at all times  maintain  a
     deposit account with Bank to be used for Hotel  operations  during the term
     of the Loan (the "Operating Account").  The funds deposited into local bank
     accounts  for each Hotel shall be swept into the  Operating  Account at the
     Bank a minimum  of two (2) times per  week;  provided,  however,  that such
     local bank accounts  shall  maintain  funds  sufficient to satisfy  minimum
     deposit  requirements  not in  excess  of  $1,000  per  account.  Upon  the
     occurrence and  continuance of an Event of Default,  the Bank is authorized
     to  immediately  sweep the funds  located in local bank  accounts  for each
     Hotel into the Operating Account at the Bank.

          (F) Capital Expenditure Account.  Spend four percent (4%) of the total
     revenue  generated from the Hotels each year for the purpose of maintaining
     and repairing the Hotels and funding capital  expenditures  relating to the
     Hotels. Borrower shall submit quarterly reports to Bank, which explain with
     reasonable detail the capital  expenditures made for the Hotels during that
     quarter.  On an annual basis beginning with the first  anniversary  date of
     this Loan, the Bank will review the aggregate  amount spent on such capital
     expenditures  during  the  previous  four (4)  quarters.  In the event that
     Borrower  has not spent the four percent  (4%)  requirement  at the time of
     such review,  the Borrower shall establish and maintain a separate  capital
     expenditure  reserve  account  (the  "CapEx  Account")  with  Bank  and the
     deficiency  for the previous four (4) quarters  will be deposited  into the
     CapEx  Account.  Upon the  opening  of the  CapEx  Account,  the Bank  will
     establish the  procedures  for the Borrower's use of the funds in the CapEx
     Account.  In determining whether the 4% amount has been expended in any one
     year period,  Bank will include in the expenditure amount for such year any
     amounts  which,  at the end of the one year  period,  Borrower,  the  Hotel
     Owners or TRS Leasing are committed to spend under enforceable contracts or
     purchase  orders  entered into or issued prior to the end of such year, and
     which  have  not been  expended  through  no  fault of any of the  Humphrey
     Entities.  To the extent so  included,  the amount  will not be included in
     such calculation for the year such funds are actually expended.

          (G) Revolving Loan Debt Service Coverage Ratio. Borrower shall, at all
     times,  maintain a "Revolving Loan Debt Service  Coverage Ratio"  (Adjusted
     Net Operating Income divided by Imputed Debt Service) of at least 1.5 to 1,
     which shall be tested beginning on April 1, 2005, and quarterly thereafter.
     "Adjusted  Net  Operating  Income"  is  defined  as  the  remainder  of net
     operating  income of Borrower,  for the preceding twelve (12) month period,
     after reducing net operating  income by (a) an amount equal to four percent
     (4%) of gross room  revenues  from the Hotels for  furniture,  fixtures and
     equipment  reserve and (b) an amount  equal to four  percent  (4%) of gross
     room revenues from the Hotels for  management  fees and expenses.  "Imputed
     Debt Service " is defined as the annual  principal  and  interest  payments
     required to fully amortize the total maximum amount that can be advanced to
     Borrower  under the Loan  Documents,  regardless  of the amount of the Loan
     that  has  been  advanced  to  Borrower,   based  on  a  twenty  (20)  year
     amortization  with an  assumed  interest  rate  of the  yield  on the  U.S.
     Treasury  securities  having  a ten  (10)  year  maturity  at the  time  of
     determination,  plus 2.75%.  If the  Revolving  Loan Debt Service  Coverage
     Ratio falls below 1.5 to 1, the  Borrowing  Base shall be decreased so that
     the Revolving  Loan Debt Service  Coverage Ratio meets a ratio of 1.5 to 1,
     and any principal  advanced in excess of the Borrowing  Base amount will be
     immediately  due and payable.  Borrower  shall be in default under the Loan
     Documents if the  Revolving  Loan Debt Service  Coverage  Ratio at any time
     falls below 1.3 to 1. Borrower may request  approval from Bank,  which Bank
     may approve or  disapprove at its  discretion,  to pledge  additional  real
     estate as Collateral for the Loan to maintain compliance with the covenants
     and conditions of the Loan Documents or to cure any non-compliance with any
     of the affirmative covenants in this Agreement. The request for approval to
     add additional  Collateral  shall not be deemed to affect in any manner the
     Bank's rights under this Loan Agreement or the other Loan Documents for the
     failure of Borrower to comply with the requirements of this Loan Agreement.
     With respect to each parcel that will be  substituted as Collateral for the
     Loan, the requirements of Section 2.01 of this Agreement must be met to the
     Bank's  satisfaction  as to such parcel prior to such parcel being added as
     Collateral.

          (H) Consolidated  Debt Service Coverage Ratio.  Borrower shall, at all
     times,  maintain a "Consolidated Debt Service Coverage Ratio" (Adjusted Net
     Operating Income divided by Imputed  Consolidated Debt Service) of at least
     1.5 to 1, which shall be tested  beginning on April 1, 2005,  and quarterly
     thereafter.  Adjusted Net Operating  Income shall be determined as provided
     in Section 4.01(G).  "Imputed Consolidated Debt Service" shall be the total
     of the Imputed Debt  Service  (determined  as provided in Section  4.01(G))
     plus the annual principal  payments  required to fully amortize the maximum
     amount  that can be  advanced  to  Borrower  under  all of the  other  loan
     obligations  of  Borrower,  regardless  of the  amounts  of such other loan
     obligations that have actually been advanced to Borrower, calculated in the
     same manner as the Imputed Debt Service.  As used in this Section  4.01(H),
     the term  "Borrower"  shall  include all  entities  included in  Borrower's
     consolidated financial statements.

          (I)  Revolving  Loan to Value  Ratio.  Borrower  shall,  at all times,
     maintain a "Revolving  Loan to Value Ratio"  (unpaid  principal  balance of
     Loan  divided by value of Hotels) of no greater  than 60%,  which  shall be
     tested annually on the anniversary date of this Agreement. The value of the
     Hotels shall be based on the appraised values of the Hotels obtained by the
     Bank in connection with the Loan. Should the Borrower be allowed by Bank to
     substitute or add other hotels as  Collateral  during the term of the Loan,
     the  Revolving  Loan to Value Ratio shall be calculated at the time of each
     such  substitution  or addition  using as the value of each  substituted or
     added Hotel the lower of the  appraised  value of each new Hotel,  provided
     that the  appraisals  are less than two (2) years old,  or the  acquisition
     cost of the Hotel,  if acquired within the last two (2) years. In the event
     the  appraisal  date or  purchase  date is more than two years prior to the
     date of the proposed  substitution  or addition,  Borrower  will furnish to
     Bank a current appraisal of the Hotel and the value shown by such appraisal
     will be used in determining the Revolving Loan to Value Ratio.

          (J)  Consolidated  Loan to Value Ratio.  Borrower shall, at all times,
     maintain a  "Consolidated  Loan to Value Ratio"  (principal  balance of all
     loan  obligations  of  Borrower  divided by the value of all of  Borrower's
     owned real estate) of no greater than 60%,  which shall be tested  annually
     on the anniversary date of this Agreement.  For purposes of calculating the
     Consolidated   Loan  to  Value  Ratio,  the  unpaid  balance  of  all  loan
     obligations of Borrower (including this Loan) shall be utilized.  The value
     of all of the Borrower's owned real estate assets shall be equal to the sum
     of the Adjusted Net  Operating  Income (as defined in Section  4.01(G)) for
     the  trailing  one (1) year period from all of the  Borrower's  real estate
     assets  owned  during  the entire one (1) year  period  capitalized  at ten
     percent  (10%)  plus  the  lesser  of (a) the  acquisition  cost or (b) the
     appraised  value (based on appraisals that are less than two (2) years old)
     of any of the Borrower's  real estate assets  acquired within the preceding
     twelve (12) months.  As used in this Section  4.01(J),  the term "Borrower"
     shall include all entities  included in Borrower's  consolidated  financial
     statements.

          (K) Lease.  Keep the Lease  with TRS  Leasing in full force and effect
     and immediately cure any default by such Hotel Owner thereunder.

          (L) Franchise Agreements.  Keep the Franchise Agreement for each Hotel
     in full force and effect, pay all fees incurred in connection therewith and
     immediately cure any default by it thereunder.

          (M) Management Agreement. Keep the Management Agreement for each Hotel
     in full force and effect, pay all fees incurred in connection therewith and
     immediately cure any default by it thereunder.

          (N) Collateral Records.  Maintain complete and accurate records of all
     Collateral,  which  shall  be made  available  to Bank for  inspection  and
     copying at any reasonable time.

          (O) Notification. Promptly notify Bank in writing of: (i) any material
     adverse change in the financial  condition of any of the Humphrey Entities;
     (ii) any material damage to any Hotel;  (iii) any condemnation  proceedings
     instituted  or  threatened  against  any Hotel;  and (iv) any  existing  or
     threatened litigation,  claim, assessment,  investigation or administrative
     proceeding or similar action which would  materially  adversely  affect the
     financial condition of any of the Humphrey Entities.

          (P)  Insurance.   Maintain   casualty   insurance,   public  liability
     insurance,  workers compensation insurance and such other insurance as Bank
     may require with respect to the  operations  of Borrower,  the Hotel Owners
     and TRS Leasing  and with  respect to the Hotels and other  Collateral,  in
     form,  amounts and coverages  and with  insurance  companies  acceptable to
     Bank.  Borrower  will,  upon request of Bank,  deliver to Bank from time to
     time the policies of  insurance,  or at Banks'  election,  certificates  of
     insurance,  in form  satisfactory  to Bank. The policies of insurance shall
     provide  that they may not be  cancelled  or  diminished  without  at least
     thirty (30) days prior notice to Bank. Each insurance  policy shall contain
     an  endorsement  providing  that  coverage  in  favor  of Bank  will not be
     impaired in any way by any act, omission or default by Borrower,  or by any
     other  person.  For  those  policies  of  insurance  covering  any  of  the
     Collateral,  Borrower will provide Bank with such loss payable endorsements
     or other  endorsement  as Bank may require.  Bank may require that Borrower
     obtain an  independent  appraisal of the Collateral to determine the actual
     cash value or replacement cost of the Collateral for insurance purposes.

          (Q) Executive  Personnel.  Maintain executive and management personnel
     with  substantially the same  qualifications  and experience as the present
     executive and management personnel of Borrower.  Borrower shall notify Bank
     of any change in executive or management personnel.

          (R)  General  Business  Operations.  (i)  preserve  and  maintain  its
     organizational  (corporate,  partnership,  limited  liability  company,  as
     applicable) existence and all rights,  privileges and franchises reasonably
     necessary  to the  conduct  of its  business;  (ii)  conduct  its  business
     activities and maintain the Collateral in substantially  the same manner as
     it is being  conducted and  maintained at the date of this Agreement and in
     compliance  with  all  applicable   requirements  of  law  and  contractual
     obligations  applicable  thereto;  and (iii) keep all  property  useful and
     necessary  in its business in good working  order and  condition,  ordinary
     wear and tear excepted.

          (S)  Additional  Assurances.  Make,  execute  and deliver to Bank such
     notes,  deeds  of  trust,  mortgages,  security  agreements,   assignments,
     financing  statements and other  documents as the Bank or its attorneys may
     reasonably  request to evidence and secure the Loan as contemplated by this
     Agreement and to perfect any security interest in the Collateral.

     4.02.  Negative  Covenants of Borrower.  Without the prior express  written
consent of the Bank, which consent shall not be unreasonably  withheld,  so long
as any  amounts  payable  hereunder  or under  the  Note  shall  remain  unpaid,
Borrower, the Hotel Owners and TRS Leasing each will not:

          (A) Liens, Etc. Create or suffer to exist any lien,  security interest
     or  other  charge  or  encumbrance,  or  any  other  type  of  preferential
     arrangement  (each a "Lien") upon or with respect to any of the Collateral,
     except (i) Liens for taxes in the  ordinary  course of  business  which are
     being contested in good faith,  provided that  enforcement of such Liens is
     stayed  pending  such  contest,  (ii)  Liens in  connection  with  workers'
     compensation,  unemployment  insurance or other social security obligations
     (but not  ERISA),  (iii)  deposits  or  pledges  to secure  bids,  tenders,
     contracts (other than contracts for the payment of  indebtedness),  leases,
     statutory  obligations,  surety and appeal bonds and other  obligations  of
     like  nature  arising  in the  ordinary  course of  business,  (iv)  zoning
     ordinances,  easements, rights of way, minor defects,  irregularities,  and
     other similar restrictions affecting the Collateral which do not materially
     and adversely affect the value of such Collateral or materially  impair its
     use for the operation of the business of the Borrower, (v) Liens arising by
     operation of law, such as mechanics' or  materialmen's  liens,  incurred in
     the ordinary  course of business  which are being  contested in good faith,
     provided that, at the request of Bank, such liens are released of record by
     the filing of a bond or making of a deposit as required by law,  (vi) Liens
     arising  out of  judgments  or decrees  which are being  contested  in good
     faith,  provided  that  enforcement  of such Liens is stayed  pending  such
     contest,  (vii) purchase money Liens,  (viii) Liens granted to the Bank and
     (ix) Liens consented to in writing by the Bank.

          (B)  Unauthorized  Use of  Proceeds.  Use any proceeds of the Loan for
     purposes not expressly permitted hereby.

          (C) Guaranty of Obligations.  Guaranty,  assume or become obligated in
     any manner upon any  obligations  of any other person or entity  (except by
     the endorsement of negotiable  instruments for deposit or collection in the
     ordinary course of business),  other than as disclosed to the Bank prior to
     the date of this  Agreement  or  consented  to in  writing by Bank prior to
     incurring  such  guaranty,  assumption or obligation  liability,  provided,
     however, that this restriction shall not apply to any guaranty,  assumption
     or  obligation  liability  that is  included  in the  loan  obligations  of
     Borrower  for  purposes  of  determining  Borrower's  compliance  with  the
     Affirmative  Covenants in Sections  4.01(H) and 4.01(J) and  provided  that
     such loan obligations do not cause Borrower to violate such covenants.

          (D) Preserve and Protect the  Collateral.  Fail to take those  actions
     reasonably  necessary or  appropriate  to preserve and protect the value of
     the Collateral.

          (E) Sale or Transfer of Property.  Borrower,  the Hotel Owners and TRS
     Leasing shall not transfer,  lease, convey,  encumber or grant any interest
     of any nature in any  Collateral  now owned or hereafter  acquired,  except
     for: (i)  inventory  sold or consumed in the  ordinary  course of business,
     (ii) obsolete or damaged equipment that is replaced with equipment of equal
     or greater value that is free from  encumbrance,  or (iii)  purchase  money
     liens  incurred for the purchase of the personal  property that is security
     for such purchase money lien, in an original  amount not exceeding the sale
     price of the personal property.  Borrower may request approval from Bank to
     obtain  a  release  of any of the  Hotels  and  substitute  a new  Hotel as
     Collateral as provided in Section 1.11 hereof. Bank agrees that it will not
     unreasonably withhold its approval of any such substitution.

          (F)  Dividends  and  Distributions.   Issue  any  dividends  or  other
     distributions:  (i) in excess of 75% of Borrower's  "Funds From Operations"
     (as  that  term is  defined  by the  National  Association  of Real  Estate
     Investment  Trusts) per year, or in excess of such higher amounts as may be
     required to maintain its status as a real estate  investment  trust or (ii)
     at any time there exists an Event of Default that remains  uncured for more
     than sixty (60) days without the prior written consent of Bank, which shall
     not be unreasonably withheld.

          (G) Management  Agreement.  Materially amend,  modify or terminate the
     Management Agreement for any of the Hotels without the Bank's prior written
     approval of such  amendment or  termination,  which  approval  shall not be
     unreasonably withheld by Bank.

          (H) Franchise  Agreement.  Materially  amend,  modify or terminate any
     Franchise  Agreement for any of the Hotels without the Bank's prior written
     approval of such  amendment or  termination,  which  approval  shall not be
     unreasonably withheld by Bank.

          (I) Leases.  Materially  amend,  modify or terminate the Lease without
     the Bank's prior written  approval of such amendment or termination,  which
     approval shall not be unreasonably withheld by Bank.

          (J)  Continuity of Operations.  (i) engage in any business  activities
     substantially  different than those in which Borrower is presently  engaged
     and other business  activities  related or incidental  thereto;  (ii) cease
     operations,  liquidate,  or dissolve;  (iii) merge,  acquire or consolidate
     with any other entity,  or acquire  substantially  all of the assets of any
     entity where the total acquisition price in the event of an acquisition, or
     the total  assets of such  entity in the event of merger or  consolidation,
     exceed ten percent (10%) of the Borrower's then total assets,  or (iv) sell
     or transfer any of the Collateral.

          (K) Transactions  with Affiliates.  Enter into any transaction with an
     affiliate,   unless  such  transaction  is  entered  into  upon  terms  and
     conditions  as  favorable  to Borrower as an arms'  length  transaction  on
     commercially  reasonable terms with an independent  third party,  provided,
     however,  that this  restriction  shall not  apply to  affiliates  that are
     included in the  consolidated  financial  statements  of  Borrower  for the
     fiscal year in which the transaction occurs.

          (L) Accounting Changes.  Change its fiscal year from that it currently
     maintains or change its accounting  practices  except as may be required by
     generally accepted accounting principles.

                                    ARTICLE V
                                EVENTS OF DEFAULT

     5.01.  Events  of  Default.  If any of the  following  events  ("Events  of
Default") shall occur and be continuing:

          (A) Borrower shall fail to pay any installment of interest,  principal
     or other  amount  payable  hereunder  or under  the Note  when due and such
     failure  continues  for a period  of five (5) or more  days  after  written
     notice thereof from Bank to Borrower; or

          (B) Borrower shall fail to perform or observe,  or shall violate,  any
     other term, covenant or agreement contained in this Agreement, or contained
     in any of the other Loan Documents, on its part to be performed or observed
     and any such failure or violation  shall remain  unremedied for thirty (30)
     days or more after written notice from the Bank to the Borrower  specifying
     the nature of the default; provided,  however, that if such default is of a
     nature  that it cannot be cured  within  such  thirty  (30) days,  then the
     Borrower  shall not be in default  if the  Borrower  shall  have  commenced
     curing of said default  within a reasonable  time,  and shall be diligently
     prosecuting  completion of the same,  and within a reasonable  time, not to
     exceed  sixty  (60) days  after  the date of the  original  written  notice
     completes the cure of such default; or

          (C) The Revolving Loan Debt Service  Coverage  Ratio, as determined in
     Section 4.01(G), shall fall below 1.3 to 1; or

          (D) Any representation or warranty stated in this Agreement or made by
     the Borrower,  the Hotel Owners or TRS Leasing under or in connection  with
     any other Loan Document  shall prove to have been incorrect in any material
     respect when made; or

          (E) The Borrower, any Hotel Owner or TRS Leasing shall fail to pay any
     principal  or interest  upon any other  indebtedness  in excess of $100,000
     (excluding for purposes of this Section 5.01(E)  indebtedness  evidenced by
     the Note),  when due (whether by scheduled  maturity,  required  repayment,
     acceleration,  demand or otherwise)  and such failure shall  continue after
     the  applicable  grace  period,  if  any,  specified  in the  agreement  or
     instrument  relating to such  indebtedness;  or any other default under any
     agreement or  instrument  relating to any such  indebtedness,  or any other
     event, shall occur and shall continue after the applicable grace period, if
     any,  specified  in such  agreement  or  instrument,  if the effect of such
     default or event is to accelerate,  or to permit the  acceleration  of, the
     maturity of such  indebtedness;  or any such indebtedness shall be declared
     to be due and payable, or required to be prepaid (other than by a regularly
     scheduled required repayment),  prior to the stated maturity thereof unless
     such indebtedness is being contested in good faith; or

          (F) Borrower,  any Hotel Owner or TRS Leasing shall  generally not pay
     their  respective debts as such debts become due, or shall admit in writing
     its  inability  to pay  its  debts  generally,  or  shall  make  a  general
     assignment  for the  benefit  of  creditors;  or any  proceeding  shall  be
     instituted by or against  Borrower,  any Hotel Owner or TRS Leasing seeking
     to  adjudicate  any  one of  them a  debtor  or  insolvent,  or  seeking  a
     reorganization, arrangement, adjustment, protection, relief, or composition
     of  its  debts  under  any  law  relating  to  bankruptcy,   insolvency  or
     reorganization  or relief of debtors,  or seeking the entry of an order for
     relief or the appointment of a receiver,  trustee or other similar official
     for him or for any  substantial  part of his property,  and, in the case of
     any such proceeding  instituted  against him either such  proceeding  shall
     remain  undismissed  or unstayed for a period of thirty (30) days or any of
     the actions sought in such proceeding (including,  without limitation,  the
     entry of an order for  relief  against  Borrower  or the  appointment  of a
     receiver,  trustee, custodian or other similar official for any one of them
     or for any  substantial  part of their  property)  shall occur which is not
     dismissed or stayed within thirty (30) days; or

          (G) Any  judgment  or order  for the  payment  of money in  excess  of
     $100,000 shall be rendered against Borrower, any Hotel Owner or TRS Leasing
     and either:  (1)  execution  proceedings  shall have been  commenced by any
     creditor upon such  judgment or order,  or (2) there shall be any period of
     10 consecutive  days during which a stay of enforcement of such judgment or
     order, by reason of a pending appeal or otherwise,  shall not be in effect;
     or

          (H) The Loan Documents  after  delivery  thereof shall for any reason,
     except to the  extent  permitted  by the terms  thereof,  cease to create a
     valid and perfected first priority lien and security interest in any of the
     Collateral; or

          (I) Either of the Hotel Owners or TRS Leasing shall fail to perform or
     observe, or shall violate,  any other term, covenant or agreement contained
     in any of the Loan Documents,  on its part to be performed or observed, and
     any such failure or violation shall remain  unremedied for thirty (30) days
     or  more  after  written  notice  from  the  Bank to the  defaulting  party
     specifying  the  nature of the  default;  provided,  however,  that if such
     default is of a nature  that it cannot be cured  within  such  thirty  (30)
     days,  then the defaulting  party shall not be in default if the defaulting
     party shall have commenced curing of said default within a reasonable time,
     and shall be diligently  prosecuting  completion of the same,  and within a
     reasonable  time,  not to  exceed  sixty  (60)  days  after the date of the
     original  written  notice  completes  the  cure of such  default,  provided
     further,  however that the thirty (30) day time period  provided herein for
     the cure of such  default  shall not apply to any failure to pay any amount
     due under the Loan Documents, which cure period for failure to pay shall be
     governed by the provisions of Section 5.01(A) hereof; or

          (J) Any Franchise  Agreement  for any Hotel is terminated  without the
     prior written  consent of Bank or such Franchise  Agreement  expires and is
     not replaced with a substitute  franchise  agreement within sixty (60) days
     thereafter; or

          (K) Any event of default  occurs  under the Lease  between TRS Leasing
     and the Hotel Owners and such default is not cured within  applicable  cure
     periods allowed under such Lease, or

          (L) Any  proceedings are threatened or initiated to foreclose any lien
     or  security  interest  in any of the  Hotels,  or a deed  in  lieu of such
     foreclosure is given for any Hotel.

Then, and in any such event, the Bank may,  without notice to Borrower,  declare
the  Note,  all  interest  thereon  and all other  amounts  payable  under  this
Agreement  and the  other  Loan  Documents  to be  forthwith  due  and  payable,
whereupon  the Note,  all such interest and all such amounts shall become and be
forthwith  due and  payable,  without  presentment,  demand,  protest or further
notice of any kind,  all of which are hereby  expressly  waived by the Borrower;
and Bank may  exercise  all rights and  remedies  provided in any Loan  Document
and/or by applicable law, provided,  however,  that in the event of an actual or
deemed  entry of an order for  relief  with  respect to the  Borrower  under the
Federal  Bankruptcy  Code, (x) the obligation of the Bank to make any Loan shall
automatically  be  terminated  and (y) the Note,  all such interest and all such
amounts shall automatically become due and payable, without presentment, demand,
protest or any notice of any kind, all of which are hereby  expressly  waived by
the Borrower.  In the event of any conflict between this Agreement and any other
Loan  Document  regarding  whether  a notice  to  Borrower  to cure any Event of
Default is required, the provisions of this Agreement shall control.

                                   ARTICLE VI
                                  MISCELLANEOUS

     6.01. Amendments,  etc. No amendment or waiver of any provision of any Loan
Document,  nor consent to any departure by the Borrower,  any Hotel Owner or TRS
Leasing  therefrom,  shall in any event be effective unless the same shall be in
writing and signed by the respective  parties thereto and the Bank and then such
waiver or consent shall be effective  only in the specific  instance and for the
specific purpose for which given.

     6.02. Notices, etc. All notices and other communications provided for under
any Loan  Document  shall be in  writing  (including  facsimile  communication),
mailed,  faxed or  delivered,  to the  Borrower or the Bank at their  respective
addresses and facsimile  numbers set forth on the first page of this  Agreement,
or such other addresses and/or facsimile numbers as may be hereafter  designated
by either party to the other in a written  notice to the other party.  A copy of
all notices to  Borrower  shall also be sent to Jason  Benson,  Suite 3700 First
National Tower,  1601 Dodge Street,  Omaha,  Nebraska  68102,  and a copy of all
notices  to Bank  shall be sent to P.  Scott Dye,  1500  Woodmen  Tower,  Omaha,
Nebraska 68102. All such notices and communications shall, when mailed or faxed,
be effective when deposited in the mails,  postage prepaid,  or when the fax has
been electronically confirmed, respectively.

     6.03. No Waiver;  Remedies. No failure on the part of the Bank to exercise,
and no delay in exercising, any right under any Loan Document shall operate as a
waiver thereof;  nor shall any single or partial exercise of any right under any
Loan Document  preclude any other or further exercise thereof or the exercise of
any other right. The remedies  provided in the Loan Documents are cumulative and
not exclusive of any remedies provided by law.

     6.04. Accounting Terms. All accounting and financial terms not specifically
defined  herein  shall  be  construed  in  accordance  with  generally  accepted
accounting principles consistently applied, except as otherwise stated herein.

     6.05. Costs, Expenses and Taxes. The Company shall pay on demand:

          (A) All  costs  and  expenses  in  connection  with  the  preparation,
     execution,  delivery,  filing,  recording  and  administration  of the Loan
     Documents,   including,   without  limitation,   the  reasonable  fees  and
     out-of-pocket  expenses of counsel for the Bank. In addition,  the Borrower
     shall pay any and all stamp and other taxes  (excluding  income  taxes) and
     fees payable or determined to be payable in connection  with the execution,
     delivery,  filing  and  recording  of the  Loan  Documents  and  the  other
     documents to be delivered under the Loan Documents,  and agrees to save the
     Bank harmless from and against any and all  liabilities  with respect to or
     resulting from any delay in paying or omission to pay such taxes and fees;

          (B) To the extent permitted by law, all costs and expenses  (including
     reasonable counsel fees and expenses) in connection with the enforcement of
     the Loan  Documents  and the other  documents to be delivered in connection
     with the Loan Documents,  including without  limitation all such reasonable
     costs and expenses related directly or indirectly to any enforcement, sale,
     collection or disposition of Collateral or incurred  directly or indirectly
     with respect to any litigation or bankruptcy proceeding.

     6.06. Right of Set-off.  The Bank is hereby authorized at any time and from
time to time, to the fullest  extent  permitted by law and without prior notice,
to set off and apply any and all deposits  (general or special,  time or demand,
provisional or final) at any time held and other  indebtedness at any time owing
by the Bank to or for the credit or the account of the Borrower, any Hotel Owner
or TRS Leasing  against any and all of the  obligations  of the  Borrower now or
hereafter  existing under any Loan Document,  irrespective of whether or not the
Bank shall have made any demand under such Loan Document and although  deposits,
indebtedness or such  obligations  may be unmatured or contingent,  and although
the amount of such deposits may be in excess of the  Borrower's  obligations  to
the Bank.  The Bank  agrees to notify the  Borrower  after any such  set-off and
application,  provided that the failure to give such notice shall not affect the
validity  of such  set-off  and  application.  The rights of the Bank under this
Section 6.06 are in addition to other rights and  remedies  (including,  without
limitation, other rights of set-off) which the Bank may have.

     6.07. Severability of Provisions. Any provision of this Agreement or of any
other Loan Document  which is prohibited or  unenforceable  in any  jurisdiction
shall, as to such jurisdiction, be ineffective to the extent of such prohibition
or  unenforceability  without  invalidating the remaining  provisions  hereof or
thereof or affecting the validity or  unenforceability  of such provision in any
other jurisdiction.

     6.08.  Participations.  The Bank may, at its option, sell all or any of its
interests  in  the  Note  and  the  other  Loan  Documents  to  other  financial
institutions  (the  "Participants")  and  in  connection  with  such  sale  (and
thereafter) may disclose any financial  information the Bank may have concerning
the  Borrower to any such  Participant  or  potential  Participant  and Borrower
waives any right of privacy with respect thereto.  Borrower waives any notice of
sale or repurchase of any participation  interests.  Borrower further waives any
right of set-off or  counterclaim  that it may now or later have against Bank or
any Participant.

     6.09. Waiver of Jury Trial. BORROWER HEREBY IRREVOCABLY WAIVES ALL RIGHT TO
TRIAL  BY JURY IN ANY  ACTION,  PROCEEDING  OR  COUNTERCLAIM  ARISING  OUT OF OR
RELATING  TO ANY LOAN  DOCUMENT  TO WHICH  IT IS A PARTY  OR ANY  INSTRUMENT  OR
DOCUMENT DELIVERED IN CONNECTION THEREWITH.

     6.10.  Binding Effect;  Governing Law. This Agreement shall be binding upon
and inure to the  benefit  of the  Borrower  and the Bank and  their  respective
heirs,  personal  representatives,  successors  and  assigns,  except  that  the
Borrower shall not have the right to assign its rights hereunder or any interest
herein without the prior written consent of the Bank.  This Agreement,  the Note
and the other Loan  Documents  shall be governed by, and construed in accordance
with,  the laws of the State of Nebraska,  without  reference to  principles  of
conflicts of law.

     6.11.  Indemnification.  Borrower hereby indemnifies and agrees to hold the
Bank harmless from and against, and shall reimburse the Bank with respect to any
and all claims, demands, causes of action, loss, damage, liabilities,  costs and
expenses (including reasonable attorney's fees and court costs) of any and every
kind or character,  known or unknown, fixed or contingent,  asserted against the
Bank at any time and from time to time by reason  of or  arising  out of (i) the
Borrower's,  any  Hotel  Owner's  or  TRS  Leasing's  ownership  of  any  of the
Collateral,  (ii) the breach of any  representation or warranty of the Borrower,
any Hotel Owner or TRS Leasing as set forth in this  Agreement or any other Loan
Document to which the Borrower,  such Hotel Owner or TRS Leasing is a party, and
(iii) the failure of the Borrower to perform any obligation in this Agreement or
the  failure  of  Borrower,  any  Hotel  Owner or TRS  Leasing  to  perform  any
obligation in any other Loan Document to which the Borrower,  any Hotel Owner or
TRS Leasing is a party,  required to be  performed  by such  parties;  provided,
however,  that such  indemnification  obligations  shall  not  apply to  claims,
demands, causes of action, loss, damage, liabilities, costs and expenses arising
solely out of Bank's  negligence  or  willful  misconduct.  The  indemnification
obligations  set forth in this Section 6.11 shall  survive the  repayment of the
Loan or the earlier termination of this Agreement.

     6.12. Survival of Representations and Warranties.  Borrower understands and
agrees  that in  extending  advances  under  this  Loan,  Bank is relying in all
representations,  warranties and covenants made by Borrower in this Agreement or
in any  certificate  or  other  instrument  delivered  by  Borrower  to  Bank in
connection with the Loan Documents.  Borrower  further agrees that regardless of
any  investigation  made by  Bank,  all  such  representations,  warranties  and
covenants  will survive the  extension of any advance  under the Loan,  shall be
continuing  in nature,  shall be deemed  made and remade by Borrower at the time
each Loan  advance is made and shall  remain in full force and effect until such
time as Borrower's  indebtedness  to Bank under the Loan Documents shall be paid
in full.

     6.13.  Execution in  Counterparts.  This  Agreement  may be executed in any
number of counterparts,  each of which when so executed shall be deemed to be an
original and all of which when taken together  shall  constitute but one and the
same agreement.

     6.14. Time is of the Essence.  Time is of the essence in the performance of
this Agreement.

     6.15. Further  Assurances.  Borrower hereby covenants and agrees to execute
and deliver such other  instruments and documents and take such other actions of
any kind or nature whatsoever as Bank may reasonably  request in order to assist
Bank in obtaining and perfecting the liens and security  interests to secure the
Loan as provided in the Loan Documents, and to otherwise perform the obligations
of Borrower hereunder.

     6.16.  Final  Agreement.  The Loan Documents  represent the final agreement
between the Bank and  Borrower as to the  subject  matter  hereof and may not be
contradicted  by evidence of claimed prior,  contemporaneous  or subsequent oral
agreements of the parties and there are no unwritten oral agreements between the
parties.

     IN WITNESS  WHEREOF,  the parties  hereto have caused this  Agreement to be
executed by their respective officers thereunto duly authorized,  as of the date
first above written.

                           BORROWER:

                           HUMPHREY HOSPITALITY TRUST, INC.


                           By:      /s/ Donavon A. Heimes
                               --------------------------------------------
                             Its: Chief Financial Officer, Treasurer & Secretary


                           BANK:

                           GREAT WESTERN BANK


                           By:      /s/ Kolleen Hoover
                               --------------------------------------------
                               Its:  Authorized Officer
                                   --------------------------------------------