<PAGE>
                                                                  EXHIBIT 10(15)


                              AMENDMENT NUMBER ONE
                         TO LOAN AND SECURITY AGREEMENT


                  This AMENDMENT NUMBER ONE TO LOAN AND SECURITY AGREEMENT (the
"Amendment") is entered into as of October 3, 2001, between FOOTHILL CAPITAL
CORPORATION, a California corporation ("Agent"), with a place of business
located at 2450 Colorado Avenue, Suite 3000 West, Santa Monica, California
90404, as Agent for the Lenders (as defined herein), and as a Lender, the
lenders identified on the signature pages hereof (such lenders, together with
their respective successors and assigns, are referred to hereinafter each
individually as a "Lender" and collectively as the "Lenders", and together with
Agent, as the "Lender Group"), and THE HOTEL GROUP, INC., a Kansas corporation
("Borrower"), and SHOLODGE, INC., a Tennessee corporation ("Holdings"), with its
chief executive office located at 130 Maple Drive North, Hendersonville, TN
37075, with reference to the following:

                  WHEREAS, Borrower and Holdings previously entered into that
certain Loan and Security Agreement, dated as of August 27, 1999 (as amended,
restated, supplemented, or otherwise modified from time to time, the "Loan
Agreement"), with Agent and Lenders pursuant to which Lenders have made certain
loans and financial accommodations available to Borrower and Holdings;

                  WHEREAS, Borrower and Holdings have requested that Agent and
the Lenders amend the Loan Agreement;

                  WHEREAS, subject to the terms and conditions set forth herein,
Agent and the Lenders are willing to so amend the Loan Agreement.

                  NOW, THEREFORE, in consideration of the foregoing and the
mutual covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

         1.       Defined Terms. All terms used herein and not otherwise defined
shall have the meanings ascribed thereto in the Loan Agreement.

         2.       Amendments To The Loan Agreement.

                           (a)      Section 1.1 of the Loan Agreement hereby is
                  amended as follows:

                           (i)      The definition of "Additional Pledged Notes"
                  hereby is amended and restated in its entirety to read as
                  follows:

                           "Additional Pledged Notes" means the notes, itemized
                  on Schedule A-1, pledged by an Obligor in support of the
                  increase in the Maximum Facility


                                    5.20 - 1
<PAGE>

                  Amount above $30,000,000 as a result of an increase in the
                  Maximum Revolver Amount above $20,000,000, and such term shall
                  also include notes pledged by an Obligor pursuant to Section
                  4.5.

                           (ii)     The definition of "Applicable NOI Multiple"
                  is hereby amended and restated in its entirety to read as
                  follows:

                           "Applicable NOI Multiple" means the following stated
                  NOI numbers set forth below under the heading "NOI Multiple"
                  with respect to the specified levels of Subordinated
                  Indebtedness set forth below:

<TABLE>
<CAPTION>
----------------------------------------------------------------
  Amount of Subordinated Indebtedness              NOI Multiple
----------------------------------------------------------------
<S>                                                <C>
>$50,000,000                                             5.0
----------------------------------------------------------------
>$30,000,000 and <$50,000,000                            4.0
                 -
----------------------------------------------------------------
<$30,000,000                                             3.0
-
----------------------------------------------------------------
</TABLE>

                           (iii)    The definition of "Applicable Prepayment
                  Premium" hereby is deleted in its entirety.

                           (iv)     The definition of "Baseline NOI" hereby is
                  amended and restated in its entirety to read as follows:

                           "Baseline NOI" means (i) from the Closing Date to the
                  Maximum Facility Amount Availability Date, the NOI
                  attributable to the Underlying Real Property Collateral which
                  secures the Pledged Notes, (ii) after the Maximum Facility
                  Amount Availability Date, the NOI attributable to the
                  Underlying Real Property Collateral which secures the Pledged
                  Notes and the Additional Pledged Notes, all as set forth on
                  Schedule A-1, and (iii) from time to time, the NOI
                  attributable to additional parcels of Real Property Collateral
                  added by amendment to Schedule A-1 as set forth in this
                  Agreement.

                           (v)      The definition of "Jonesboro Property"
                  hereby is deleted in its entirety.

                           (vi)     The definition of "Maximum Revolver Amount"
                  hereby is amended and restated in its entirety to read as
                  follows:

                           "Maximum Revolver Amount" means $20,000,000 or such
                  larger amount as may be approved from time to time by the
                  Lender Group (it being understood that there is currently no
                  present agreement to approve or consider any such larger
                  amount).


                                    5.20 - 2
<PAGE>

                           (vii)    The definition of "Maximum Facility Amount
                  Availability Date" hereby is amended and restated in its
                  entirety to read as follows:

                           "Maximum Facility Amount Availability Date" means
                  that date upon which all of the conditions precedent as set
                  forth in Section 3.2 to the Lenders' commitment to increase
                  the Maximum Facility Amount above $30,000,000 as a result of
                  an increase in the Maximum Revolver Amount above $20,000,000
                  have been either satisfied or waived by the Lender Group.

                           (viii)   The definition of "Real Property Collateral"
                  hereby is amended and restated in its entirety to read as
                  follows:

                           "Real Property Collateral" means the Real Property
                  owned in fee by an Obligor identified on Schedule A-1, as the
                  same may be amended or modified from time to time to reflect
                  the provision of additional Real Property Collateral to secure
                  the Obligations as set forth in Section 2.1(c), 3.9 or 4.5."

                           (ix)     The definition of "Total Maximum Commitment
                  Amount" hereby is amended and restated in its entirety to read
                  as follows:

                           "Total Maximum Commitment Amount" means, for each
                  Lender, the Dollar amount of the obligation of such Lender to
                  make Advances and to make its portion of the Term Loan, as
                  such amount is set forth opposite the name of such Lender
                  under the caption Total Maximum Commitment on Schedule C-1, in
                  an aggregate amount of $30,000,000.

                           (x)      The definition of "Unencumbered Asset Value"
                  hereby is amended by deleting from the parenthetical appearing
                  in subsection (v) of such definition the language ", such as
                  Murfreesboro and Jackson, which until they are directly
                  secured by real property".

                           (xi)     The following definitions hereby are added
                  in alphabetical order:

                           "Aggregate NOI" shall have the meaning set forth in
                  the definition "Go-forward Reserve".

                           "Average Quarterly NOI Decline" shall mean the
                  quotient obtained by dividing (a) the result of (i) the
                  quotient obtained by dividing (A) the result of (x) the
                  Aggregate NOI for the immediately preceding four quarters (the
                  "Most Recent NOI") subtracted from (y) the Aggregate NOI for
                  the equivalent four quarter period for the immediately
                  preceding year (the "Previous NOI") by (B) the Previous NOI
                  multiplied by (ii) the Most Recent NOI by (b) 4.


                                    5.20 - 3
<PAGE>

                           "Go-forward Reserve" shall mean the reserve against
                  the Borrowing Base to be established at such time as the
                  Interim Reserve is terminated following the delivery to the
                  Agent of the collateral reporting set forth in Section 6.2(e)
                  for the period ending December 31, 2001. Such reserve shall be
                  in an amount equal to the greater of (a) the product of 5
                  times the result of (i) the actual total NOI generated by the
                  Real Property Collateral and the Underlying Real Property
                  Collateral securing repayment of Eligible Notes (the
                  "Aggregate NOI") for the immediately preceding four quarters
                  subtracted from (ii) the Aggregate NOI for the four quarters
                  ended the immediately preceding quarter prior to the last
                  quarter in the period set forth in (a)(i) above or (b) the
                  product of 5 times the Average Quarterly NOI Decline. Schedule
                  1.1 sets forth an example of the calculation of the Go-forward
                  Reserve.

                           "Interim Reserve" shall mean the reserve against the
                  Borrowing Base established pursuant to Section 2.1(b) by the
                  Agent for the period commencing on October 3, 2001 and ending
                  on the date that the collateral reporting set forth in Section
                  6.2(e) for the period ending December 31, 2001 has been
                  delivered to the Agent. Such reserve shall be in an amount
                  equal to the Aggregate NOI for the twelve months ending August
                  31, 2001. Section 1.1 sets forth an example of the calculation
                  of the Interim Reserve.

                           (b)      Section 2.1(b) hereby is amended and
restated in its entirety to read as follows:

                  "Anything to the contrary in this Section 2.1 notwithstanding,
Agent shall have the right to establish reserves in such amounts, and with
respect to such matters, as Agent in its Permitted Discretion shall deem
necessary or appropriate, against the Borrowing Base, including without
limitation, the Go-Forward Reserve, the Interim Reserve, and reserves with
respect to (i) sums that the Obligors are required to pay (such as taxes,
assessments, insurance premiums, or, in the case of leased assets, rents or
other amounts payable under such leases) and have failed to pay under any
Section of this Agreement or any other Loan Document, and (ii) amounts owing by
the Obligors to any Person to the extent secured by a Lien on, or trust over,
any of the Collateral, which Lien or trust, in the reasonable determination of
Lender (from the perspective of an asset-based lender), would be likely to have
a priority superior to the Liens of Agent, for the benefit of the Lender Group
(such as landlord liens, ad valorem taxes, or sales taxes where given priority
under applicable law) in and to such item of the Collateral. Agent shall notify
Borrower in writing as soon as is practicable following the establishment of any
such reserve or any change in the amount thereof, which notice shall set forth
in reasonable detail the amount of such reserve and the reason for the
establishment thereof (provided that no such notification shall be required for
the Go-forward Reserve or the Interim Reserve)."

                           (c)      Section 2.6(a) hereby is amended by:

                           (i)      deleting from clause (i) thereof the number
                  "0.50" and inserting "2.50" in lieu thereof; and


                                    5.20 - 4
<PAGE>

                           (ii)     deleting from clause (ii) thereof the number
                  "0.50" and inserting "1.00" in lieu thereof.

                           (d)      Section 2.11(d) hereby is amended by
deleting the dollar amount "$1,500" and inserting "$3,500" in lieu therof.

                           (e)      Section 3.2 hereby is amended and restated
in its entirety to read as follows:

                           "3.2 Conditions Precedent to inclusion of the
                  Additional Pledged Notes in the Borrowing Base and the Making
                  of Loans on or after the Maximum Facility Amount Availability
                  Date. The following shall be conditions precedent to the
                  inclusion of the Additional Pledged Notes as set forth on
                  Schedule A-1 in the calculation of the Borrowing Base and the
                  making of Advances on or after the Maximum Facility Amount
                  Availability Date:

                           (a)      Agent shall have received each of the
                  following documents, in form and substance satisfactory to
                  Agent, duly executed, and each such document shall be in full
                  force and effect:

                           (i)      the Additional Pledged Notes;

                           (ii)     the Additional Pledged Deeds of Trust;

                           (iii)    the Additional Pledged Note Endorsements;

                           (iv)     the Additional Pledged Deed of Trust
                  Assignments;

                           (v)      the Additional Pledged Title Policies;

                           (vi)     the Additional Pledged Title Policy
                  Assignment Endorsements;

                           (vii)    the Additional Pledged Note Obligor
                  Notifications;

                           (viii)   the FF&E Bank Notification Letters; and

                           (ix)     the Additional Pledged Note Estoppels;

                           (b)      Agent shall have received real estate
                  appraisals, in form and substance, and from real estate
                  appraisers, satisfactory to Agent in its Permitted Discretion
                  with respect to each parcel of Underlying Real Property
                  Collateral encumbered by an Additional Pledged Deed of Trust;

                           (c)      Agent shall have received title reports and
                  title insurance policies, in form and substance, and from
                  title companies, satisfactory to


                                    5.20 - 5
<PAGE>

                  Agent in its Permitted Discretion with respect to each
                  additional parcel of Underlying Real Property Collateral;

                           (d)      Agent shall have received an opinion of
                  Obligors' counsel in form and substance satisfactory to Agent
                  in its Permitted Discretion;

                           (e)      Agent shall have received a Phase I
                  environmental report with respect to each parcel of Underlying
                  Real Property Collateral encumbered by an Additional Pledged
                  Deed of Trust, the environmental consultants retained for such
                  reports, the scope of the reports, and the results of the
                  reports shall be satisfactory to Agent, in its Permitted
                  Discretion;

                           (f)      Agent shall have received, to its
                  satisfaction, in its Permitted Discretion, an assignment for
                  the benefit of the Lenders of the FF&E Reserves maintained by
                  each Mortgagor of each parcel of Underlying Real Property
                  Collateral which is subject to an Additional Pledged Deed of
                  Trust;

                           (g)      Agent shall have completed its business,
                  legal, and collateral due diligence, including, but not
                  limited to, (i) a collateral audit and review of each
                  Obligor's books and records and verification of each Obligor's
                  representations and warranties to the Lender Group, the
                  results of which shall be satisfactory to each Lender in each
                  Lender's Permitted Discretion, and (ii) a review of the
                  financial and business performance of each Shoney's Inn
                  operated on the Underlying Real Property Collateral securing
                  the Additional Pledged Notes and the determination of the
                  Baseline NOI, the results of which shall be reasonably
                  satisfactory to each Lender in each Lender's Permitted
                  Discretion;

                           (h)      Agent shall have syndicated to its
                  satisfaction the increase in Commitments from the Interim
                  Facility Amount to the Maximum Facility Amount and, to the
                  extent necessary to reach the Total Maximum Commitment,
                  Joining Lenders, as defined in the Joinder Agreement, shall
                  have been admitted to the credit facility as provided in
                  Section 14.3;

                           (i)      Agent shall have determined, to its
                  satisfaction in its Permitted Discretion, the right of Agent,
                  on behalf of the Lender Group, to change the flag under which
                  the lodging operations are conducted on the Real Estate
                  Collateral in the event Agent enters into possession and
                  control thereof as a result of the exercise of remedies with
                  respect to a Mortgage upon default by an Obligor, or the
                  Additional Pledged Notes or the Additional Pledged Deeds of
                  Trust upon default by a Mortgagor;

                           (j)      Agent shall have received such estoppel
                  letters from the purchasers of the Underlying Real Property
                  Collateral securing repayment of the Additional Pledged Notes,
                  with respect to the status of the


                                    5.20 - 6
<PAGE>

                  Additional Pledged Notes as of the Maximum Facility Amount
                  Availability Date as Agent shall require in its Permitted
                  Discretion; and

                           (k)      Agent shall have determined, to Agent's
                  satisfaction in its Permitted Discretion, that the Additional
                  Pledged Notes are cross-collateralized and cross-defaulted
                  each to each other and to each Pledged Note;

                           (l)      Obligors shall have utilized their best
                  efforts to obtain for the benefit of the Lender Group estoppel
                  letters, in form and substance satisfactory to the Agent in
                  its Permitted Discretion, from each ground lessor with respect
                  to the Underlying Real Property Collateral securing repayment
                  of the Additional Pledged Notes, if any, stating that the
                  ground lease is in full force and effect, that the ground
                  lessor agrees to send copies of any notices of default sent to
                  the ground lessee also to Agent, and that the Agent has the
                  right to cure any such default applicable to a mortgagee under
                  the applicable ground lease;

                           (m)      Agent and ShoLodge Franchise shall have
                  entered into an agreement, in form and substance acceptable to
                  Agent in its Permitted Discretion, whereby ShoLodge Franchise
                  agrees to (i) provide to Agent, at such time as any notice is
                  sent to the Mortgagor/licensee, a copy of any notices sent to
                  the Mortgagor/licensee under the applicable license agreement
                  for the use of the Shoney's Inn marks with respect to lodging
                  operations on the Underlying Real Property Collateral securing
                  repayment of the Additional Pledged Notes, and to permit Agent
                  to cure any default by the Mortgagor/licensee under the
                  applicable license agreement within the time periods provided
                  in the license agreement, and (ii) to license to Agent the use
                  of the Shoney's Inn marks, upon the same terms and conditions
                  set forth in the applicable license agreement, in the event
                  that the Agent comes into possession of any such Underlying
                  Real Property Collateral; and

                           (n)      all other documents and legal matters in
                  connection with the transactions contemplated by this
                  Agreement shall have been delivered, executed, or recorded and
                  shall be in form and substance satisfactory to Agent in its
                  Permitted Discretion."

                           (f)      Section 3.6 hereby is amended by deleting
the first sentence thereof and inserting the following in lieu thereof: "This
Agreement shall become effective upon the execution and delivery hereof by
Obligors and the Lender Group and shall continue in full force and effect for a
term ending on September 30, 2004 (the "Maturity Date").

                           (g)      Section 3.8 hereby is amended by:

                           (i)      deleting from the initial sentence thereof
                                    the words "together with the Applicable
                                    Prepayment Premium" and


                                    5.20 - 7
<PAGE>

                                    inserting the words "without premium or
                                    penalty" in lieu thereof;

                           (ii)     deleting the second sentence thereof in its
                                    entirety; and

                           (iii)    deleting the last three sentences thereof in
                                    their entirety. .

                           (h)      Section 3.9 hereby is amended and restated
in its entirety to read as follows:

                           "3.9     Note Default and Remedies.

                           (a)      Upon the occurrence of a default under one
                  or more of the Notes and/or the instruments securing the
                  indebtedness evidenced thereby, the Obligors shall have the
                  right, in their discretion, to take such action as is deemed
                  appropriate to collect the Indebtedness evidenced by such
                  Notes, including, without limitation, the exercise of all
                  remedies under the instruments securing the indebtedness
                  evidenced by such Notes. All proceeds received from the
                  exercise of such remedies shall be Collections governed by the
                  provisions of Section 2.7. Notwithstanding anything to the
                  contrary contained in this Agreement, the Obligors shall have
                  5 days to cure any Overadvance created by such a default, in
                  accordance with Section 2.5.

                           (b)      If an Obligor, directly or indirectly,
                  acquires the Underlying Real Property Collateral securing
                  repayment of a Note following the exercise of its remedies as
                  set forth in subsection 3.9(a), or by reason of a deed in lieu
                  of such exercise of remedies, Obligors may, for a period of 10
                  days following such acquisition, pledge the Underlying Real
                  Property Collateral which previously secured repayment of such
                  Note (which shall then be Real Property Collateral hereunder).
                  Such additional Real Property Collateral may be added to the
                  Collateral securing the Obligations through an amendment to
                  this Agreement and as set forth in Section 4.5. Thereafter,
                  such Real Property Collateral shall be included in the
                  determintion of the Borrowing Base and the NOI from such Real
                  Property Collateral shall be included in the NOI for Real
                  Estate Collateral."

                           (i)      Section 4.4 hereby is amended by:

                           (i)      deleting from the next to last sentence
                                    thereof the language "(iii) the Obligors
                                    shall maintain the released Note free and
                                    clear of all Liens or other encumbrances,
                                    and (iv)" and inserting the language "and
                                    (iii)" in lieu thereof; and

                           (ii)     deleting the last sentence thereof in its
                                    entirety and inserting in lieu thereof the
                                    following:

                                    "Any Note so released from being considered
                                    Collateral shall, however, be included in
                                    the calculation of Unencumbered Asset


                                    5.20 - 8
<PAGE>

                                    Value provided such Note is free and clear
                                    of Liens or other encumbrances."

                           (j)      Section 4.5 hereby is amended by inserting
between the words "any time" and "and from time to time" the words "in
accordance with Section 2.1(c) or Section 3.9".

                           (k)      Section 6.2(e) hereby is amended and
restated in its entirety as follows:

                           "(e)     on a monthly basis and within 50 days of the
end of the month,

                           (i)      a calculation of the NOI, on the basis of
                                    the immediately preceding twelve months,
                                    derived by the respective Mortgagor from the
                                    hotel operations for each parcel of
                                    Underlying Real Property Collateral, and by
                                    Holdings or Borrower, as the case may be,
                                    with respect to any parcel of Real Property
                                    Collateral; and

                           (ii)     an analysis, accompanied by appropriate
                                    calculations and discussion, as required by
                                    Agent in its Permitted Discretion, of the
                                    occupancy rate, average daily room rate, and
                                    revenue per available room derived by the
                                    respective Mortgagor from the hotel
                                    operations for each parcel of Underlying
                                    Real Property Collateral, and by Holdings or
                                    Borrower, as the case may be, with respect
                                    to any parcel of Real Property Collateral."

                           (l)      Section 7.20 hereby is amended by:

                           (i)      deleting from the first sentence of
                                    subparagraph (b) thereof the dollar amount
                                    "$100,000,000" and inserting "$90,000,000"
                                    in lieu thereof; and

                           (ii)     deleting the second sentence of subparagraph
                                    (b) thereof in its entirety.

                           (m)      Section 14.3(a) hereby is amended by
deleting the last sentence thereof in its entirety.

                           (n)      Schedule A-1 of the Loan Agreement hereby is
deleted in its entirety and the new Schedule A-1 attached hereto shall be
inserted in lieu thereof.

                           (o)      Schedule C-1 of the Loan Agreement hereby is
deleted in its entirety and the new Schedule C-1 attached hereto shall be
inserted in lieu thereof.

                           (p)      Schedule 1.1 hereby is added to the Loan
Agreement.


                                    5.20 - 9
<PAGE>

                           (q)      Schedule 5.20 of the Loan Agreement hereby
is amended by adding thereto the addendum to Schedule 5.20 attached hereto.

                           (r)      Exhibit B-1 of the Loan Agreement hereby is
amended by deleting from paragraph R thereof the language "[$46.5 MILLION]" and
inserting "[$30 MILLION]" in lieu thereof.

                           (p)      Exhibit C-2 of the Loan Agreement hereby is
amended by deleting from paragraph 2(b) of Schedule 3 thereto the dollar amount
"$100,000,000" and inserting "$90,000,000" in lieu thereof.

         3.       Conditions Precedent to Amendment. The satisfaction of each of
the following, unless waived or deferred by Agent in its sole discretion, shall
constitute conditions precedent to the effectiveness of this Amendment and each
and every provision hereof:

                           (a)      Agent shall have received this Amendment,
duly executed by the parties hereto, and the same shall be in full force and
effect.

                           (b)      Agent shall have received a reaffirmation
and consent substantially in the form attached hereto as Exhibit A (the
"Consent"), duly executed and delivered by each Guarantor.

                           (c)      The representations and warranties in this
Amendment, the Loan Agreement and the other Loan Documents shall be true and
correct in all respects on and as of the date hereof, as though made on such
date (except to the extent that such representations and warranties relate
solely to an earlier date).

                           (d)      After giving effect to this Amendment, no
Event of Default or event which with the giving of notice or passage of time
would constitute an Event of Default shall have occurred and be continuing on
the date hereof, nor shall result from the consummation of the transactions
contemplated herein.

                           (e)      No injunction, writ, restraining order, or
other order of any nature prohibiting, directly or indirectly, the consummation
of the transactions contemplated herein shall have been issued and remain in
force by any Governmental Authority against Borrower, Holdings, Agent or any
Lender, or any of their respective Affiliates.

                           (f)      Agent shall have received an amendment fee
in the amount of $300,000, which amount Borrower and Holdings authorize Agent,
for the benefit of the Lender Group, to charge to the Loan Account.

                           (g)      Borrower shall have complied with the
following with respect to each Pledged Note or Real Estate Collateral added to
Schedule A-1 of the Loan Agreement pursuant to this Amendment:


                                   5.20 - 10
<PAGE>

                           (1)      Agent shall have received each of the
                  following documents, as applicable, in form and substance
                  satisfactory to Agent, duly executed, and each such document
                  shall be in full force and effect:

                                    (i)      the Pledged Notes;

                                    (ii)     the Pledged Deeds of Trust;

                                    (iii)    the Pledged Note Endorsements;

                                    (iv)     the Pledged Deed of Trust
                                             Assignments;

                                    (v)      the Pledged Title Policies;

                                    (vi)     the Pledged Title Policy Assignment
                                             Endorsements;

                                    (vii)    the Pledged Note Obligor
                                             Notifications; and

                                    (viii)   the Pledged Note Estoppels.

                           (2)      Agent shall have received real estate
                  appraisals, in form and substance, and from real estate
                  appraisers, satisfactory to Agent with respect to each
                  additional parcel of Real Estate Collateral.

                           (3)      Agent shall have received title reports and
                  title insurance policies, in form and substance, and from
                  title companies, satisfactory to Agent with respect to each
                  additional parcel of Underlying Real Property Collateral.

                           (4)      Agent shall have received an opinion of
                  Obligor's counsel in form and substance satisfactory to Agent
                  in its Permitted Discretion.

                           (5)      Agent shall have received such environmental
                  reports with respect to the additional Real Estate Collateral,
                  the environmental consultants retained for such reports, the
                  scope of the reports, and the results of the reports shall be
                  satisfactory to Agent, in its Permitted Discretion.

                           (6)      Agent shall have received, to its
                  satisfaction, an assignment for the benefit of Lenders of the
                  FF&E Reserves, if any, maintained by each Mortgagor of each
                  additional parcel of Underlying Real Property Collateral which
                  is subject to a Pledged Deed of Trust.

                           (7)      Agent shall have determined, to its
                  satisfaction in its Permitted Discretion, the right of Agent,
                  on behalf of the Lender Group, to change the flag under which
                  the lodging operations are conducted on the Real Estate
                  Collateral in the event Agent enters into possession and
                  control thereof as a result of the exercise of remedies with
                  respect to a Mortgage upon default by an Obligor, or the
                  Pledged Notes or the Pledged Deeds of Trust upon default by a
                  Mortgagor.


                                   5.20 - 11
<PAGE>

                           (8)      Agent shall have received such estoppel
                  letters from the purchasers under the Motel Purchase
                  Agreement, with respect to the status of any Pledged Notes as
                  of the date of the inclusion thereof in the calculation of the
                  Borrowing Base as Agent shall require in its Permitted
                  Discretion.

                           (9)      Agent and ShoLodge Franchise shall have
                  entered into an agreement, in form and substance acceptable to
                  Agent in its Permitted Discretion, whereby ShoLodge Franchise
                  agrees to (i) provide to Agent, at such time as any notice is
                  sent to the Mortgagor/licensee, a copy of any notices sent to
                  the Mortgagor/licensee under the applicable license agreement
                  for the use of the Shoney's Inn marks with respect to lodging
                  operations on the Underlying Real Property, and to permit
                  Agent to cure any default by the Mortgagor/licensee under the
                  applicable license agreement within the time periods provided
                  in the license agreement, and (ii) to license to Agent the use
                  of the Shoney's Inn marks, upon the same terms and conditions
                  set forth in the applicable license agreement, in the event
                  that the Agent comes into possession of any Underlying Real
                  Property Collateral.

         4.       Representations and Warranties. Each of the Borrower and
Holdings hereby represents and warrants to the Agent that (a) the execution,
delivery, and performance of this Amendment and of the Loan Agreement, as
amended hereby, are within its powers, have been duly authorized by all
necessary action, and are not in contravention of any law, rule, or regulation,
or any order, judgment, decree, writ, injunction, or award of any arbitrator,
court, or Governmental Authority, or of the terms of its Governing Documents, or
of any contract or undertaking to which it is a party or by which any of its
properties may be bound or affected, (b) this Amendment and the Loan Agreement,
as amended hereby, constitute its legal, valid, and binding obligation,
enforceable against it in accordance with its terms, and (c) this Amendment has
been duly executed and delivered by it.

         5.       Choice of Law. The validity of this Amendment, its
construction, interpretation and enforcement, the rights of the parties
hereunder, shall be determined under, governed by, and construed in accordance
with the laws of the State of California.

         6.       Counterparts; Telefacsimile Execution. This Amendment may be
executed in any number of counterparts and by different parties and separate
counterparts, each of which when so executed and delivered, shall be deemed an
original, and all of which, when taken together, shall constitute one and the
same instrument. Delivery of an executed counterpart of a signature page to this
Amendment or Consent by telefacsimile shall be effective as delivery of a
manually executed counterpart of this Amendment or such Consent. Any party
delivering an executed counterpart of this Amendment or the Consent by
telefacsimile also shall deliver a manually executed counterpart of this
Amendment or Consent, as applicable, but the failure to deliver a manually
executed counterpart shall not affect the validity, enforceability, and binding
effect of this Amendment or the Consent.

         7.       Effect on Loan Documents.


                                   5.20 - 12
<PAGE>

                  (a)      The Loan Agreement, as amended hereby, and each of
the other Loan Documents shall be and remain in full force and effect in
accordance with its respective terms and hereby is ratified and confirmed in all
respects. The execution, delivery, and performance of this Amendment shall not,
except as expressly set forth herein, operate as a waiver of or, except as
expressly set forth herein, as an amendment of, any right, power, or remedy of
Agent or any Lender under the Loan Agreement, as in effect prior to the date
hereof. The waivers, consents, and modifications herein are limited to the
specifics hereof, shall not apply with respect to any facts or occurrences other
than those on which the same are based, shall not excuse future non-compliance
with the Loan Agreement, and shall not operate as a consent to any further or
other matter, under the Loan Documents.

                  (b)      Upon and after the effectiveness of this Amendment,
each reference in the Loan Agreement to "this Agreement", "hereunder", "herein",
"hereof" or words of like import referring to the Loan Agreement, and each
reference in the other Loan Documents to "the Agreement", "thereunder",
"therein", "thereof" or words of like import referring to the Loan Agreement,
shall mean and be a reference to the Loan Agreement as modified and amended
hereby.

                  (c)      To the extent that any terms and conditions in any of
the Loan Documents shall contradict or be in conflict with any terms or
conditions of the Loan Agreement, after giving effect to this Amendment, such
terms and conditions are hereby deemed modified or amended accordingly to
reflect the terms and conditions of the Loan Agreement as modified or amended
hereby.

         8.       Further Assurances. Each of Borrower and Holdings shall
execute and deliver all agreements, documents, and instruments, in form and
substance satisfactory to Agent, and take all actions as Agent may reasonably
request from time to time, to perfect and maintain the perfection and priority
of Agent's security interests in the Collateral (for the benefit of the Lender
Group) and to fully consummate the transactions contemplated under this
Amendment and the Loan Agreement.

         9.       Entire Agreement. This Amendment, together with all other
instruments, agreements, and certificates executed by the parties in connection
herewith or with reference thereto, embody the entire understanding and
agreement between the parties hereto and thereto with respect to the subject
matter hereof and thereof and supersede all prior agreements, understandings,
and inducements, whether express or implied, oral or written.


                  [Remainder of page intentionally left blank]


                                   5.20 - 13
<PAGE>

                  IN WITNESS WHEREOF, the parties have entered into this
Amendment as of the date first above written.


                           SHOLODGE, INC., a Tennessee corporation



                           By /s/ James M. Grout
                              -------------------------------------------------
                           Title:  Executive Vice President


                           THE HOTEL GROUP, INC., a Kansas corporation



                           By /s/ James M. Gout
                              -------------------------------------------------
                           Title:  Executive Vice President


                           FOOTHILL CAPITAL CORPORATION,
                           a California corporation, as Agent and as a Lender



                           By /s/ Davies Gannon
                              -------------------------------------------------
                           Title:
                                 ----------------------------------------------


                                   5.20 - 14