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                                  EXHIBIT 10.3

                          PROPERTY MANAGEMENT AGREEMENT

DATE    :      July 24   ,1996

BETWEEN :      JKLM FAMILY LIMITED PARTNERSHIP, an Oregon limited partnership
               ("Owner")

                                             and

                TERRITORIAL INNS MANAGEMENT CO., INC., an Oregon corporation
                ("Manager").

                                R E C I T A L S :

        Owner is the owner of the Summer Hill Apartments in Cotulla, Texas
(hereinafter referred to as the "Property"). Manager is in the business of
managing, operating and maintaining motel and apartment properties.

        Owner desires to employ, engage and appoint Manager as its managing
agent for the Property, and Manager is desirous of accepting this appointment,

        NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth below, Owner and Manager agree as follows:

        1. Appointment. The Owner hereby appoints and employs Manager as the
exclusive managing agent for the Property, and Manager hereby accepts such
appointment.

        2. Term. This Agreement shall commence as of the date hereof and shall
remain in effect until terminated as hereinafter provided.

        3. Management Fee.

               3.1 Fee. Owner shall pay Manager a monthly fee in the amount of
ten percent (10%) of the Gross Room Revenue of the Property for the immediately
preceding month. Management fees are to be paid monthly and are due by the fifth
(5th) day of the month based on the revenues of the preceding month.

               3.2 Gross Room Revenue. For purposes of this section, Gross Room
Revenue shall mean all of the rents paid, less any tenant credit or adjustment,
and shall exclude deposits such as cleaning deposits, pet deposits, and security
deposits.

        4. Manager's Duties. Manager shall manage, coordinate, and supervise the
operation, maintenance and management of the Property. Manager shall have such
responsibilities, and shall perform and take or cause to be performed or taken
all such services and actions customarily performed or taken by managing agents
of property of similar nature, location and character to that of the Property as
Manager shall deem necessary or advisable for the proper management of the
Property, including,


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without limitation, the duties set forth in 4.1 through 4.10 below. Unless other
specifically provided in this Agreement, all services and actions that Manager
is required or permitted to perform or take or cause to be performed or taken
under this Agreement in connection with the management of the Property shall be
performed or taken as the case may be on behalf of Owner and at Owner's sole
expense.

               4.1 Rentals. Manager shall rent all apartments on terms and
conditions satisfactory to Owner to desirable tenants.

               4.2 Enforcement. Except as directed otherwise by Owner, Manager
shall monitor the compliance of all tenants with the terms and conditions of
their rental agreements and take all such actions as Manager shall deem
necessary or advisable to enforce all the rights and remedies of Owner under the
rental agreements to protect the interests of Owner, including without
limitation, the preparation and delivery to tenants of late payment, default,
and other appropriate notices. With the prior written consent of Owner, Manager
may retain counsel, collection agencies, and such other persons as Manager may
deem appropriate or advisable to enforce by legal action the rights and remedies
of Owner against any tenant in default in the performance of its obligations
under a rental agreement. Manager shall promptly notify Owner of the progress of
any such legal action.

               4.3 Dispute Resolution. Manager shall receive and use its best
efforts to attend to and resolve all complaints of tenants and shall attempt to
resolve any complains, disputes, or disagreements by or among tenants but shall
not expend more than Two Hundred Dollars ($200) to settle any dispute with the
tenant without the prior written consent of Owner.

               4.4 Rates. Manager shall establish and maintain price and rates
schedules for all services and facilities of every kind or nature connected with
the operation of the Property and shall collect all revenues derived therefrom
for the account of Owner.

               4.5 Advertising. Manager shall, at the expense of and with the
prior approval of Owner, hire such advertising services and place such
advertisements which the Manager may deem necessary for the operation of the
Property.

               4.6 Compliance. Manager shall take or cause to be taken all
appropriate actions affecting the Property as Manager deems advisable to comply
with all legal requirements applicable to the Property and those of any Board of
Fire Underwriters or similar agency.

               Notwithstanding limitations set forth in Section 8.3 of this
Agreement, Manager may without owner's prior written approval, take or cause to
be taken such actions without limitation as to cost, the failure to do so would
or might in Manager's judgment, expose Owner or Manager to criminal liability,
provided that in each instance Manager shall, before taking or causing to be
taken such action, use reasonable efforts under the circumstances to notify
Owner or the need for the action and to obtain Owner's approval. Manager and
Owner shall each promptly notify the other of any violation, order, rule or
determination of any governmental authority or Board of Fire Underwriters or
similar agency that affects the Property.

               4.7 Maintenance. Manager shall cause the building to be
maintained in good and safe condition comparable to that of other properly
maintained properties of similar type and location to that of the Property.

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               To the capacity of all equipment and systems located in or
servicing the property, Manager shall cause all such equipment and systems to be
operated effectively and maintained in good repair. Further, Manager shall cause
to be provided or made available to tenants those services which Owner is
required to provide or make available under rental agreements.

               Manager shall enter into such service and maintenance contracts
as Manager shall deem necessary or appropriate for the operation and maintenance
of the building, including without limitation, telephone service, utilities,
elevator, boiler and air conditioning maintenance, landscape maintenance, pest
control, rubbish removal, and fuel. Manager shall purchase in reasonable
quantities and at reasonable prices all supplies as Manager shall deem necessary
or appropriate for the proper operation and maintenance of the Property.

               4.8 Repairs. With the prior written consent of Owner, Manager
shall cause such ordinary and necessary repairs to be made to the Property on
all equipment and systems located in or servicing the Property, and shall cause
such interior alterations and declarations to be made in the Property as Manager
shall deem necessary or advisable for its proper operation and maintenance.

               The prior approval of Owner shall not be required for emergency
repairs regardless of the cost of such repairs if, in the reasonable opinion of
Manager, such repairs are immediately necessary for the preservation or
protection of the Property or the safety of Tenants and other personnel in or on
the Property, or are otherwise required to avoid the suspension of any necessary
services to the Property, provided that in each such instance Manager shall,
before causing any such emergency repair to be made, use reasonable efforts
under the circumstances to notify Owner of the emergency situation and obtain
its approval of that repair.

               4.9 Property Rehabilitation. Manager shall plan, arrange for,
order and oversee installation of capital improvements and rehabilitation of the
Property as authorized in writing by Owner on a project-by-project basis, which
authorization must be given before commencing such project. In the event the
project costs do not exceed Six Thousand Dollars ($6,000) per year there shall
be no additional fee for such services. In the event the project costs exceed
Six Thousand Dollars ($6,000) in a year,

                      (a) Manager shall provide Owner with a detailed cost
                      budget in advance of commencing the work;

                      (b) The Owner shall pay Manager a fee of four percent (4%)
                      of the costs in excess of Six Thousand Dollars ($6,000)
                      upon completion of the project, in addition to the
                      Management Fee; and

                      (c) With the prior written consent of Owner, Manager shall
                      hire such additional personnel as Owner and Manager agree
                      are required to complete the project and Owner shall pay
                      the salary and employment related expenses of such
                      personnel.

               4.10 Miscellaneous. Generally do all things and take all actions
necessary or appropriate for the operation and management of the Property within
the terms of this Agreement.

        5. Employees.

               5.1 Hiring. To the extent Manager deems necessary for the conduct
of the management


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of the Property, Manager shall hire personnel who, in each instance, shall be
employees of Owner (and not of Manager), provided, however, that any personnel
hired by Manager whose wages are not provided for in the budget shall be
employees of Manager and their wages and fringe benefits shall be paid by
Manager without reimbursement by Owner. Manager shall direct and supervise all
personnel hired by Manager in the performance of their duties and shall
discharge those of them whose employment Manager shall determine to be
unnecessary or undesirable. Manager shall use due care in the selection of
personnel and employees on Owner's behalf and, having used such care, shall have
no responsibility or liability for any act or admission, tortious or otherwise,
of any such employee.

               5.2 Wages. Manager shall pay all wages and other benefits
properly payable to the employees hired by Manager, maintain adequate payroll
records, remit to the property authorities all required income and social
security withholding taxes on employment insurance payments, workers
compensation payments and such other amounts with respect to wages and other
benefits payable to such employees as may be required under applicable law,
together in each case with all required reports or other filings, and shall
maintain and administer all medical, disability and other insurance benefits and
other fringe benefits as may from time to time be required under any union or
other agreements or arrangements pertaining to the employment of such personnel.

               5.3 Labor Contracts. Manager shall perform Owner's obligations
under all union and other labor contracts affecting the employees of Owner who
are rendering services in connection with the management of the Property, and
shall monitor and enforce all of Owner's rights thereunder.

               5.4 Assigned Employees. The Manager may, with the Owner's prior
written approval, assign one or more of Manager's employees to the Property on a
temporary basis, in which event the Owner agrees to reimburse the Manger for all
the actual expenses of that employee, including wages, transportation to and
from the Property and reasonable room and board of such employee while at the
Property.

        6. Limitations on Manager's Powers and Authority.

               6.1 Expenditures. Except to the extent provided for in any
approved budget or as otherwise specifically provided in this Agreement with
respect to emergency situations or otherwise, Manager shall not, without the
prior written approval of Owner, incur any single expense for a repair,
alteration, service, supply or other matter whatsoever that would involve a cost
in excess of Five Hundred Dollars ($500), except that air conditioners may be
replaced at a cost of not more than $1,200.

               6.2 Owner's Credit. The Manager shall not pledge the Owner's
credit without the Owner's prior written consent. The Manager shall not in the
name of Owner borrow any money or execute any promissory note or other
encumbrance without the prior written consent of the Owner.

        7. Deposit of Funds/Books of Account.

               7.1 Operating Accounts. Manager shall open and maintain an
account or accounts ("Operating Accounts") as Manager shall deem necessary or
appropriate in a banking institution in the State of Texas, designated from time
to time by Owner in Manager's name as agent for owner. Manager shall deposit in
the Operating Accounts all funds collected by Manager under this Agreement.
Manager shall make deposits into or withdrawals from the Operating Accounts as
Manager shall deem necessary or advisable in connection with the management of
the Property, provided, however, that all funds deposited in the Operating
Accounts shall be and remain Owner's property. Expenditures made from such
account shall include without limitation the Manager's compensation and expense
reimbursements,


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insurance premiums, real and personal property taxes, payments of amounts due on
mortgages, contracts and capital leases affecting the Property and expenses for
supplies, repairs, maintenance and improvements as incurred subject to the terms
of this Agreement.

               7.2 Security Deposits. Manager shall deposit and maintain in
separate accounts approved by Owner in accordance with applicable laws all
security deposits, if any, of tenants.

               7.3 Monthly Reports. Manager shall prepare and deliver to Owner a
monthly report for each month not later then the 25th day of the next following
month setting forth statements of collections, disbursements, delinquencies,
uncollectible accounts, balances of Operating Accounts, accountants payable, and
other matters relating to the management of the Property. These statements shall
upon Owner's request be accompanied by appropriate documentation of expenditures
made by Manager under this agreement.

               7.4 Remittances Within 25 Days After the End of Each Month.
Manager shall remit to Owner all unexpended funds in the Operating Accounts on
or before the 25th day of each month to the extent that the funds in the
Operating Accounts exceed the amount reasonably estimated by Manager as
necessary to provide for working capital.

               7.5 Books and Records. Manager shall establish and maintain an
accounting system for the purpose of bookkeeping, cost control, budget, payroll
records, all reports and taxes incident thereto, and such other books of
accounts, records, and documentation pertaining to the operation and maintenance
of the Property as are customarily maintained by managing agents of properties
similar in location and size to that of the Property. Manager shall prepare or
cause to be prepared and filed all returns and other reports relating to the
Property, other than income tax returns, as may be required by any governmental
authority.

        8. Operating Budgets.

               8.1 Budget for First Operating Year. Manager shall prepare and
submit to Owner prior to August 1, 1996 for Owner's approval a pro forma budget
for the operation and maintenance of the Property covering the period from
August 1, 1996 through December 31, 1996. Manager shall manage the Property
consistent with and subject to the cost limitations set forth in the budget as
the same may be adjusted with the prior written consent of Owner.

               8.2 Annual Budgets. Manager shall prepare and submit to Owner for
its approval at least thirty (30) days before the beginning of each calendar
year a proposed pro forma budget for all costs pertaining to the operation and
maintenance of the Property during the calendar year. Each budget shall be in
substantially the same form as the approved budget in effect for the prior
calendar year and, shall set forth expenditures on an annual basis. At the
request of Owner, Manager shall make such reasonable modifications to each
proposed pro forma budget it prepares in accordance with this Agreement until
Owner shall have approved the budget in writing, which approval shall not be
unreasonably withheld or delayed.

               8.3 Limitations of Approved Budgets Except as Otherwise
Specifically Provided in this Agreement. Manager shall incur costs and expenses
in connection with the operation and maintenance of the Property during any
calendar year within the limitations established by the budget for the operating
year. Manager shall not, without Owner's prior written consent, incur costs and
expenses to exceed the budgeted amount except as otherwise herein provided with
respect to emergency situations.

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Manager shall not be required to obtain Owner's prior approval with respect to,
and Owner shall consent to adjustments to the budget, for the following:

                      (a) Costs and expenses relating to utility charges, real
                      estate taxes, insurances, or other matters that are not
                      within Manager's reasonable control in which, if not
                      incurred, would or might in Manager's judgment, adversely
                      and materially affect the operation and maintenance of the
                      Property; and

                      (b) Other costs and expenses that this Agreement
                      specifically provides Manager may incur without
                      limitation.

               In addition, if any calendar year shall commence before Owner
shall have approved the pro forma budget for that year, Manager shall use its
reasonable judgment in incurring costs and expenses relating to the operation
and maintenance of the Property until a budget for such year shall be in effect,
and in doing so, shall be guided by the budget for the prior calendar year.

        9. Owners' Duties.

               9.1 Information. Owner shall make readily available to Manager
any information in its possession pertaining to the layout of the buildings, the
construction of the buildings, the heating, air conditioning, ventilating,
plumbing, electrical and other mechanical systems and equipment servicing the
property, as Manager may reasonably request. Owner shall also provide Manager
with copies of or access to all agreements, licenses, certificates, contracts,
bills, notices and other documents pertaining to the Property.

               9.2 Insurance. The Owner shall obtain and the Manager shall
maintain at Owner's expense, through companies agreed upon by Owner and Manager
(which in all cases shall be an insurance company licensed to do business in the
State of Texas), such policies of insurance, including but not limited to public
and employers liability, workmens compensation, fire and extended coverage,
liability and other insurance as may be necessary for the protection of the
interests of Owner and Manager or as Manager otherwise may reasonably request in
the performance of management of the Property. All policies of insurance shall
name the Owner and the Manager and such other parties as may be required by the
provisions of any mortgage as the insured thereunder as their respective
interests may appear.

               9.3 Deposit of Funds. Upon the execution of this Agreement, Owner
shall deposit with Manager funds in an amount sufficient to pay the expenses
shown in the budget as the anticipated expenditures of Manager under this
Agreement for the first month of the term hereof. Owner shall also promptly
deposit with Manager funds in such amounts as may be shown in the monthly
statements delivered by Manager to Owner as necessary additional funds for the
operation and maintenance of the Property. Further, if due to an emergency
situation or otherwise at any time Manager shall notify Owner in writing that
the balances of the operating accounts are insufficient to fund the management
of the Property, Owner shall promptly supply Manager with the necessary funds.
Manager shall deposit all the funds delivered by Owner to Manager as provided
above in the appropriate Operating Account.

        10. Owner's Access to Property and Records. Owner shall have rights to
periodically inspect the Property and to review all records with respect to the
Property, and Manager shall furnish any or all such records as may be requested
by Owner, including but not limited to the following:


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               (a) the bookkeeping system;

               (b) requests for alterations, repairs, maintenance, replacements,
               equipment for the installation and the purchasing of materials
               and supplies incidental to the operation of the Property;

               (c) bank accounts, receipts and deposits;

               (d) all contracts, expenditures, payments and  disbursements; and

               (e) periodic reports.

        11. Credit Cards. The Owner authorizes the Manager to accept such credit
cards as the Manager may determine from time to time and establish and maintain
an appropriate credit card billing system.

        12. Business Name. The business of the Property shall be conducted under
the name of the Summer Hill Apartments or such other name as Owner may hereafter
determine in its sole discretion.

        13. Licenses. At Owner's expense, Manager shall keep all necessary
licenses and permits required for the operation of the Property in full force
and effect during the term of this Agreement, and Owner shall execute and
deliver any documentation as requested by Manager to keep such permits and
licenses current.

        14. Compliance with Laws and Regulations. The Manager and the Owner
agree that each shall make all reasonable efforts, at the Owner's expense, to
comply with all applicable laws, rules, regulations, requirements and ordinances
of any federal, state or municipal authority, and the requirements of any
insurance companies covering any of the risks against which the Property is
insured, with respect to the proper operation and maintenance of the Property.

        15. Travel Expense. The parties agree that expenses of travel to and
from the Property that is made by Manager personnel and agents for the purpose
of managing the Property shall be borne by the Manager up to four visits per
calendar year. If there are special visits required due to unexpected
circumstances, the Owner will bear those costs subject to agreement in advance
by the parties. All travel shall be economy class.

        16. Indemnification.

               16.1 Scope. Owner shall indemnify and hold harmless Manager, its
principals officers, directors, shareholders, partners, employees, and agents
(individually and collectively, the "Indemnitees") from and against all
liabilities, claims, suits, damages, judgments, costs and expenses of whatever
nature, including reasonable counsel fees and disbursements, to which the
Indemnitees may become subject by reason of or arising out of any injury to or
death of any person(s), damage to property, loss of use of any property, or
otherwise in connection with the performance or nonperformance of Manager's
obligations under this Agreement. Owner shall promptly reimburse the Indemnitees
for all amounts, including reasonable attorneys' fees and disbursements, which
they or any of them are required to pay in connection with or in defense of any
of the matters for which they or any of them are entitled to indemnification as
set forth above.

               16.2 Conditions. The obligations of Owner to indemnify, hold
harmless and reimburse the Indemnitees under Section 16.1 are subject to the
following conditions:

                      (a) The Indemnitees shall promptly notify Owner of any
                      matter with respect to which Owner is required to
                      indemnify, hold harmless, or reimburse the Indemnitees;
                      and

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                      (b) The Indemnitees shall not take any actions, including
                      an admission of liability, which would bar Owner from
                      enforcing any applicable coverage under policies of
                      insurance held by Owner or would prejudice any defense of
                      Owner in any appropriate legal proceedings pertaining to
                      any such matter or otherwise prevent Owner from defending
                      itself with respect to any such matter.

               16.3 Excluded Matters. Notwithstanding the foregoing, Owner shall
not be required to indemnify, hold harmless, or reimburse the Indemnitees with
respect to any matter to the extent the same is covered by insurance or resulted
from the gross negligence or willful malfeasance of the Indemnitees or actions
taken by the Indemnitees outside of the scope of the Manager's authority under
this Agreement or any express or implied direction of Owner.

        17. Timely Performance. Owner and Manager shall each perform all of
their respective obligations under this Agreement in a proper, prompt and timely
manner. Each shall furnish the other with such information and assistance as the
other may from time to time reasonably request in order to perform its
responsibilities under this Agreement. Owner and Manager each shall take all
such actions as the other may from time to time reasonably request and other
cooperate with the other so as to avoid or minimize any delay or impairment of
either party's performance of its obligations under this Agreement.

        18. Assignment.

               18.1 Permissible Assignments. Neither Owner nor Manager may
assign this Agreement without the prior written consent of the other, provided,
however, that either party may assign this Agreement to a successor corporation
or partnership, a parent company, a wholly owned subsidiary corporation, or an
entity which controls, is controlled by, or is under common control with Owner
or Manager, as the case may be.

               18.2 Assumption and Release. Each permitted assignee of this
Agreement shall agree in writing to personally assume, perform, and be bound by
all of the terms, covenants, conditions and agreements contained in this
Agreement, and thereupon the assignor of this Agreement shall be relieved of all
obligations under this Agreement except those which shall have accrued before
the effectiveness of such assignment.

        19. Termination. Either party may terminate this agreement by giving
sixty (60) days prior written notice of such termination to the other party.

        Within fifteen (15) days after the expiration or termination of this
Agreement, Manager shall pay over to Owner

                        (i) any balance of funds held by Manager on Owner's
                        account pursuant to this Agreement; and

                        (ii) all books, records, leases, agreements and other
                        documents that are necessary or pertinent to the future
                        management of the Property.

        The provisions of this section shall survive the expiration or
termination of this Agreement.

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        20. Notices.

               20.1 General. Any and all notices or other communications given
under this Agreement shall be deemed to have been properly given when delivered,
if personally delivered, or three (3) days after the date mailed if sent
certified or registered mail, return receipt requested and postage prepaid, and
addressed to the parties at the following addresses:

               If to Manager, to:   Territorial Inns Management  Co., Inc.
                                    1784 S Main Rd.
                                    Box 942
                                    Lebanon, OR   97355

               If to Owner, to:     JKLM Family Limited  Partnership
                                    EZL Corporation, General Partner
                                    P. O. Box 631
                                    Camp Sherman, OR 97330

               Any notice delivered by either party in any manner other than
those described above shall be deemed properly given when received. Either party
may change its address for the giving of notices under this Agreement by
delivering to the other party ten (10) days' written notice of this change of
address.

               20.2 Emergency Notices. Either party may give the other notice of
emergency situations, orally (personally, by telephone, or otherwise) or by
telecopy, telex, telegram, or other method, provided that the party giving any
emergency notice as provided above in this paragraph shall confirm the same by
written notice in accordance with Section 20.1 above.

        21. Governing Law. The parties expressly agree that this Agreement shall
be governed by, interpreted under, and construed and enforced in accordance with
the laws of the state of Oregon, except to the extent that the laws of the State
of Texas must be applied under conflict of law principles by reason of the situs
of the Property in Texas. The parties hereby consent and waive any objections to
the jurisdiction and venue of any state or federal court of general jurisdiction
in Multnomah County, Oregon, with respect to any action or proceeding relating
in any way to this Agreement and agree any action brought by one party against
the other relating to this Agreement shall be brought in such a court in
Multnomah County, Oregon.

        22. Amendment. This Agreement shall not be changed, amended or otherwise
modified except in writing signed by Owner and Manager.

        23. Authorities. Each individual executing this Agreement on behalf of a
partnership, corporation or other entity warrants that such individual is
authorized to do so and that this Agreement will constitute the legally binding
obligation of such entity.

        24. Attorney Fees. If any suit, action, or proceeding shall be
instituted to enforce or interpret this Agreement, the prevailing party shall be
entitled to recover from the losing party, in addition to costs, such sums as
the court may adjudge reasonable for the prevailing parties' attorney fees in
such suit, action, proceeding or any appeal thereof.


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        25. Facsimile Transmission: Facsimile transmission of any signed
original document, and retransmission, shall be the same as delivery of an
original. At the request of either party, the parties will confirm facsimile
transmitted signatures by signing an original document.

        26. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

        27. Waiver of Breach. The waiver by any party of strict performance of
any provisions in this Agreement shall not operate or be construed as a waiver
of any subsequent breach.

        28. Integration. This Agreement contains the entire agreement among the
parties hereto pertaining to the subject matter hereof, and supersedes all prior
agreements and contemporaneous agreements, oral and written, except those
contemplated hereunder or not inconsistent herewith.

        29. Captions. Captions in this Agreement are for convenience only and
shall not be used to interpret or construe its provisions.

        30. Effective Date. This agreement shall be effective as of the date of
the closing of the transaction wherein the Owner acquires its title to and
ownership in the Property.

                                       OWNER:

                                       JKLM FAMILY LIMITED PARTNERSHIP,  an
                                       Oregon limited partnership  ("Owner")

                                       EZL CORPORATION, an Oregon  corporation,
                                       General Partner



                                       By:
                                          --------------------------------------


                                       MANAGER:

                                       TERRITORIAL INNS MANAGEMENT
                                       COMPANY, INC., an Oregon  corporation



                                       By:
                                          --------------------------------------

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