<PAGE>

                                                                    EXHIBIT 10.4

                 CONSENT AND AMENDMENT AGREEMENT WITH RELEASE

     THIS CONSENT AND AMENDMENT AGREEMENT WITH RELEASE ("Agreement"), is made as
of September 28, 2001, by and between Wells Fargo Bank Minnesota, N.A., as
Trustee for the Registered Certificateholders of Banc of America Commercial
Mortgage Inc. Commercial Mortgage Pass-Through Certificates, Series 2000-2, by
and through its authorized master servicer ORIX Capital Markets, LLC, a Delaware
limited liability company (f/k/a ORIX Real Estate Capital Markets, LLC, a
Delaware limited liability company) (collectively, "Lender"), and Residence Inn
III, LLC, a Delaware limited liability company ("Borrower") with reference to
the following agreed upon facts:

                                   RECITALS
                                   --------

     A.   On or about December 29, 1999, Lender's predecessor in interest, Bank
of America, N.A., a national banking association ("Original Lender"), made a
loan to Borrower in the original principal amount of Fifty-Five Million Five
Hundred Eighty-Eight Thousand and No/100 Dollars ($55,588,000.00) (the "Loan"),
pursuant to the terms of that certain Loan Agreement dated December 29, 1999, by
Borrower, in favor of Original Lender (the "Loan Agreement").

     B.   The Loan is evidenced by that certain Promissory Note dated December
29, 1999, executed by Borrower, as maker, in favor of Original Lender, as
holder, in the original face amount of Fifty-Five Million Five Hundred Eighty-
Eight Thousand and No/100 Dollars ($55,588,000.00) (the "Note"), and is secured
by, among other documents:

          1.   that certain Mortgage, Assignment of Leases and Rents, Security
               Agreement and Fixture Filing (the "Massachusetts Mortgage") dated
               as of December 29, 1999, executed by Borrower, in favor of
               Original Lender, and filed in the Registry District of Middlesex
               County, State of Massachusetts, on January 7, 2000, as Document
               No. 187647, in Book 176, Page 91 (and recorded with Deeds, Book
               10613, Page 245), encumbering that certain 130-unit hotel
               described in the attached Exhibit "A" and commonly known as 1775
               Andover Street, Tewksbury, Massachusetts (the "Massachusetts
               Property");

          2.   that certain Mortgage, Assignment of Leases and Rents, Security
               Agreement and Fixture Filing (the "Alabama Mortgage") dated as of
               December 29, 1999, executed by Borrower, in favor of Original
               Lender, and recorded in the Official Records of Montgomery
               County, State of Alabama, on January 4, 2000, in Real Property
               Book 2070, Page 0203, encumbering that certain 94-unit hotel
               described on the attached Exhibit
<PAGE>

               "B" and commonly known as 1200 Hilmar Court, Montgomery, Alabama
               (the "Alabama Property");

          3.   that certain Deed of Trust, Assignment of Leases and Rents,
               Security Agreement and Fixture Filing (the "Bakersfield
               Mortgage") dated as of December 29, 1999, executed by Borrower,
               in favor of Original Lender, and recorded in the Official Records
               of Kern County, State of California, on January 4, 2000, as
               Instrument No. 0200000535, encumbering that certain 114-unit
               hotel described on the attached Exhibit "C" and commonly known as
               4241 Chester Lane, Bakersfield, California (the "Bakersfield
               Property");

          4.   that certain Deed of Trust, Assignment of Leases and Rents,
               Security Agreement and Fixture Filing (the "Pleasant Hill
               Mortgage") dated as of December 29, 1999, executed by Borrower,
               in favor of Original Lender, and recorded in the Official Records
               of Contra Costa County, State of California, on January 4, 2000,
               as Instrument No. 00-0000775, encumbering that certain 126-unit
               hotel described on the attached Exhibit "D" and commonly known as
               700 Ellinwood Way, Pleasant Hill, California (the "Pleasant Hill
               Property");

          5.   that certain Deed of Trust, Assignment of Leases and Rents,
               Security Agreement and Fixture Filing (the "San Ramon Mortgage")
               dated as of December 29, 1999, executed by Borrower, in favor of
               Original Lender, and recorded in the Official Records of Contra
               Costa County, State of California, on January 4, 2000, as
               Instrument No. 00-0000777, encumbering that certain 106-unit
               hotel described on the attached Exhibit "E" and commonly known as
               1071 Market Place, San Ramon, California (the "San Ramon
               Property");

          6.   that certain Leasehold Mortgage, Assignment of Leases and Rents,
               Security Agreement and Fixture Filing (the "Connecticut
               Mortgage") dated as of December 29, 1999, executed by Borrower,
               in favor of Original Lender, and recorded in the Official Records
               of Meridan County, State of Connecticut, on January 3, 2000, in
               Volume 2534, Page 30, encumbering Borrower's leasehold interest
               in that certain 106-unit hotel described on the attached Exhibit
               "F" and commonly known as 390 Bee Street, Meridan, Connecticut
               (which leasehold interest is referred to herein as the
               "Connecticut Property");

          7.   that certain Deed to Secure Debt, Assignment of Leases and Rents
               and Security Agreement (the "Georgia Mortgage") dated as of
               December 29, 1999, executed by Borrower, in favor of Original
               Lender, and recorded in the Official Records of Fulton County,
               State of Georgia, on February 28, 2000, in Deed Book 28610, Page
               144, encumbering that certain 126-unit hotel described on the
               attached Exhibit "G" and commonly known as 3401 International
               Boulevard, Hapeville, Georgia (the "Georgia Property");

                                       2
<PAGE>

          8.   that certain Open-End Mortgage, Assignment of Leases and Rents,
               Security Agreement and Fixture Filing (the "Ohio Mortgage") dated
               as of December 29, 1999, executed by Borrower, in favor of
               Original Lender, and recorded in the Official Records of Hamilton
               County, State of Ohio, on January 10, 2000, in Book 8166, Page
               460, encumbering that certain 118-unit hotel described on the
               attached Exhibit "H" and commonly known as 11401 Reed Hartman
               Highway, Blue Ash, Ohio (the "Ohio Property");

          9.   that certain Deed of Trust, Assignment of Leases and Rents,
               Security Agreement and Fixture Filing (the "Irving Mortgage")
               dated as of December 29, 1999, executed by Borrower, in favor of
               Original Lender, and recorded in the Official Records of Dallas
               County, State of Texas, on January 5, 2000, as Document No.
               856105, in Volume 2000003, Page 820, encumbering that certain
               120-unit hotel described on the attached Exhibit "I" and commonly
               known as 950 Walnut Hill, Irving, Texas (the "Irving Property");
               and

          10.  that certain Deed of Trust, Assignment of Leases and Rents,
               Security Agreement and Fixture Filing (the "Houston Mortgage")
               dated as of December 29, 1999, executed by Borrower, in favor of
               Original Lender, and recorded in the Official Records of Harris
               County, State of Texas, on January 3, 2000, as Document No.
               U153854, encumbering that certain 110-unit hotel described on the
               attached Exhibit "J" and commonly known as 525 Bay Area
               Boulevard, Houston, Texas (the "Houston Property").

     C.   The Massachusetts Mortgage, the Alabama Mortgage, the Bakersfield
Mortgage, the Pleasant Hill Mortgage, the San Ramon Mortgage, the Connecticut
Mortgage, the Georgia Mortgage, the Ohio Mortgage, the Irving Mortgage and the
Houston Mortgage are hereinafter sometimes referred to collectively as the
"Mortgages". The Massachusetts Property, the Alabama Property, the Bakersfield
Property, the Pleasant Hill Property, the San Ramon Property, the Connecticut
Property, the Georgia Property, the Ohio Property, the Irving Property, and the
Houston Property are hereinafter sometimes referred to individually as a
"Property," and collectively as the "Properties."

     D.   The Mortgages, the Note and the Loan Agreement, along with any and all
other agreements, certificates or other documents evidencing the Loan shall
hereinafter collectively be defined as the "Loan Documents."

     E.   Lender is the current owner, mortgagee (or beneficiary, as the case
may be) and assignee of each of the Loan Documents.

     F.   Borrower and Apple Hospitality Two, Inc., a Virginia corporation
("AHT"), have entered into that certain Purchase Agreement dated May 18, 2001,
as amended by (i) that certain Amendment and Joinder dated July 30, 2001, by and
among Borrower, AHT and the Partnership, and (ii) that certain Second Amendment
and Joinder dated as of August 31, 2001, by and among Borrower, AHT, the
Partnership, Crestline, Capital Corporation, a Maryland corporation

                                       3
<PAGE>

("Crestline Capital"), CC USAGP LLC, a Delaware limited liability company ("CC
USAGP"), CCMH Desert Springs Corporation, a Delaware corporation ("CCMH Desert
Springs"), and CCRI USA LLC, a Delaware limited liability company ("CCRI USA")
(the "Purchase Agreement"); pursuant to the Purchase Agreement, on the date
hereof:

          1.   CC USAGP, CCMH Desert Springs and CCRI USA transferred all of
               their respective partnership interests in the Partnership to (i)
               AHT Res III GP, Inc., a Virginia corporation ("AHT GP"), and (ii)
               AHT Res III LP, Inc., a Virginia corporation ("AHT LP"), as a
               result of which AHT GP owns a one percent (1%) partnership
               interest in the Partnership as the sole general partner of the
               Partnership, and AHT LP owns a ninety-nine percent (99%)
               partnership interest in the Partnership as the sole limited
               partner of the Partnership (and AHT owns one hundred percent
               (100%) of the stock shares in each of AHT GP and AHT LP); and

          2.   Crestline Capital transferred one hundred percent (100%) of its
               stock shares in Crestline RES III to AHT, as a result of which
               AHT is the sole shareholder of Crestline RES III.

     G.   Borrower and Apple Hospitality Management, Inc., a Virginia
corporation ("AHM") have entered into that certain Master Hotel Lease Agreement
of even date herewith, pursuant to the terms of which Borrower shall lease the
Properties to AHM.

     H.   Article 7 of the Loan Agreement provides that an Event of Default
shall occur if Borrower shall fail to comply with, observe or perform any
covenant or agreement in any of the Loan Documents. Borrower acknowledges the
existence and enforceability of Article 7 of the Loan Agreement as well as
Lender's ability to declare an Event of Default under the circumstances
described above, absent consent thereto from Lender, and has requested Lender's
consent to (i) the transfer of partnership interests in the Partnership, (ii)
the transfer of shares of stock in Crestline RES III , (iii) the assignment by
Borrower of all of its rights and obligations under that certain Management
Agreement dated December 29, 1999, executed by Residence Inn by Marriott, Inc.,
a Delaware corporation ("Marriott"), as Manager, and Borrower, as owner (the
"Management Agreement") to AHM, (iv) the subsequent amendment and restatement of
such Management Agreement pursuant to that certain Amended and Restated
Management Agreement dated September 28, 2001, executed by Marriott, as Manager,
and AHM, as Lessee (collectively, the "Transfer"), and (v) the leasing of the
Properties from Borrower to AHM (the "Leasing").

     I.   Lender has agreed to consent to the Transfer, the Leasing, and certain
related amendments to the Loan Agreement subject to the terms and conditions of
this Agreement.

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

                                       4
<PAGE>

                                   AGREEMENT
                                   ---------

     1.   Recitals.  The Recitals set forth above are incorporated by reference
          --------
herein. Borrower acknowledges that the Recitals are not mere recitals but are
representations of fact which are being relied upon by Lender in consenting to
the Transfer and the Leasing.

     2.   Reaffirmation.  Borrower acknowledges, represents and warrants that
          -------------
the terms and conditions of the Loan Documents are in full force and effect,
without waiver, modification (except as specifically set forth herein) or offset
of any kind whatsoever.

     3.   Conditions Precedent to Lender's Consent.  Lender hereby consents to
          ----------------------------------------
the Transfer, the Leasing, and certain related amendments to the Loan Agreement
upon Borrower's timely, full and complete satisfaction of the following
conditions precedent (the "Closing"):

     (a)  the full and complete execution and delivery to Lender of the
following documents, each of even date herewith:

          (i)   this Agreement;
         (ii)   a Certificate of Limited Liability Company and Authorization to
                Sign;
        (iii)   a Certificate of Partnership and Authorization to Sign;
         (iv)   Borrower's Financial Certificate;
          (v)   Borrower Principal's Financial Certificate (Apple Hospitality
                Two, Inc.) (the "AHT Financial Certificate");
         (vi)   Borrower Principal's Financial Certificate (Apple Suites
                Advisors, Inc.) (the "Apple Suites Financial Certificate");
        (vii)   Acknowledgment and Agreement of the Borrower Principals to
                Personal Liability for the Exceptions to Non-Recourse;
       (viii)   Environmental Indemnity Agreement (the "Environmental
                Indemnity"), to be executed by AHT and Apple Suites; and
         (ix)   Nondisturbance Agreement and Consent of Management (the
                "Management Agreement Subordination"), to be executed by Lender,
                AHM, Borrower and Marriott.

     (b)  Lender's review and approval of the organizational documents of
Borrower and its constituent members;

     (c)  the delivery to Lender of a lender's policy form of "Fairway
Endorsement" or its equivalent to each of the Lender's title policies for the
Properties, if available;

     (d)  the delivery to Lender of satisfactory evidence of the currency of the
Required Insurance;

     (e)  the full release and reconveyance of any other monetary liens or
monetary encumbrances against the Properties other than the Mortgages and other
Permitted Encumbrances (as defined in the Loan Agreement);

     (f)  Lender's receipt and approval of an opinion letter from counsel for
Borrower, the Partnership, Crestline RES III, AHT and Apple Suites Advisors,
Inc., a Virginia corporation

                                       5
<PAGE>

("Apple Suites") (i) that the above-referenced entities are validly existing and
duly organized, (ii) that the undersigned parties are duly authorized to enter
into this Agreement and all transactions contemplated hereby, (iii) that this
Agreement and of all documents required by Lender in connection herewith is duly
executed, and (iv) that in the event of a bankruptcy proceeding involving
certain affiliates of Borrower, the assets of Borrower (including the
Properties) will not be substantively consolidated with the assets of such
affiliate;

     (g)  the payment of Lender's assumption fee in the amount of 0.5% of the
then outstanding principal balance of the Loan, and all other third party
payments, fees, costs and expenses incurred in connection with this Agreement,
which sum will not be applied to the outstanding principal, interest or other
sums due Lender under the Note or other Loan Documents;

     (h)  the deposit with Lender into the Debt Service Escrow an additional
monthly debt service payment in the amount of $489,067.76 to be used in
accordance with the terms of the Loan Documents; and

     (i)  Borrower's and/or other persons' or entities' execution and delivery
of such other certificates or documents as Lender may reasonably require.

     4.   Assumption Fee; Expenses.  As consideration for Lender's consent to
          ------------------------
the Transfer and the Leasing, Borrower covenants and agrees to pay to Lender at
Closing:

     (a)  0.5% of the then outstanding principal balance of the Loan, which
represents the assumption fee to be paid to Lender for consenting to the
Transfer and the Leasing (Lender acknowledges that it has received $25,000 as a
non-refundable deposit which will be applied to the assumption fee at Closing);
and

     (b)  $80.00, which represents Lender's out-of-pocket costs for financial
reports relating to the Transfer and the Leasing.

     Borrower shall, at or prior to Closing, pay the cost of any escrow, title
insurance, filing or recording fees applicable to this transaction, including
without limitation, Lender's reasonable attorneys' fees and costs, estimated at
$25,000.

     5.   Representations and Warranties by Borrower. Borrower represents and
          ------------------------------------------
warrants to Lender, and acknowledges that Lender is relying thereon, as follows:

     (a)  each of the Mortgages constitute a valid and enforceable first
priority lien against the applicable Property encumbered thereby. There are no
monetary liens against the Properties other than the Mortgages and other
Permitted Encumbrances, including any liens for outstanding current property
taxes;

     (b)  that, as of September 10, 2001, (i) the current outstanding principal
balance of the Note is $53,256,401.74; (ii) the current effective interest rate
of the Note is 8.08% per annum; (iii) the current effective monthly principal
and interest installment payment under the Note is $489,067.76, which is due and
payable on the first day of each and every calendar month; (iv) the current
effective monthly escrow payment to Lender for taxes on the Properties is

                                       6
<PAGE>

$116,955.34, which is due and payable on the first day of each and every
calendar month; (v) the current effective monthly escrow payment to Lender for
insurance on the Properties is $0; (vi) all installment payments due under the
Note through and including September 1, 2001, have been paid current; (vii)
there are no defenses or claims of setoffs with respect to any such sums or
other amounts owing under the Note or any other Loan Documents; (viii) to
Borrower's knowledge, no payment default exists of any amount due and owing
under the Loan Documents and no late charges are currently owing thereunder; and
(ix) there are currently no outstanding default notices issued pursuant to the
Loan Documents.

     (c)  that, as of September 18, 2001, in accordance with the Loan Documents,
the following balances for impounds, reserves and escrow accounts are on deposit
with Lender:

            (i)   Tax Impound                              $  813,228.98
           (ii)   Insurance Impound                        $        0.00
          (iii)   Replacement Reserve                      $1,681,648.34
           (iv)   Repair Escrow Reserve                    $  387,762.28
            (v)   Debt Service Escrow                      $1,058,302.88

     (d)  the execution and delivery by Borrower of this Agreement and the
Management Agreement Subordination and the performance by Borrower of all of its
obligations hereunder have been duly authorized;

     (e)  the execution and delivery by AHT and Apple Suites of (i) the Borrower
Principals' Consent attached hereto, (ii) the Personal Liability Acknowledgment,
and (iii) the Environmental Indemnity Agreement have been duly authorized;

     (f)  the execution and delivery by AHT of the AHT Financial Certificate
have been duly authorized;

     (g)  the execution and delivery by Apple Suites of the Apple Suites
Financial Certificate has been duly authorized;

     (h)  the execution and delivery by the Partnership of the Reaffirmation and
Consent of Original Borrower Principal attached hereto has been duly authorized;

     (i)  the execution and delivery by Crestline Capital of the Consent of
Original Borrower Principal attached hereto has been duly authorized;

     (j)  the execution by Borrower of this Agreement shall not constitute a
breach of any provision contained in Borrower's organizational or formation
documents, nor does Borrower's execution hereof constitute an event of default
under any agreement to which Borrower is now or may hereafter become a party;

     (k)  from and after the Transfer and Leasing: (i) no entity will have an
ownership interest in the Properties other than Borrower and AHM; (ii) the
Partnership shall be the sole equity member of Borrower, and Crestline RES III
shall be the sole non-equity member of Borrower; (iii) AHT GP shall be the sole
general partner of the Partnership (iv) AHT LP shall be

                                       7
<PAGE>

the sole limited partner of the Partnership, and (v) AHT shall be the sole
shareholder of Crestline RES III;

     (l)  the execution and delivery by Borrower of this Agreement and the
performance by Borrower of all of its obligations hereunder does not and will
not violate any provision of any laws, or of any order, writ, judgment,
injunction, decree, determination or award;

     (m)  the execution and delivery by Borrower of this Agreement and the
performance by Borrower of all of its obligations hereunder does not and will
not result in a breach of or constitute a default under, cause or permit the
acceleration of any obligation owed under, or require any consent (other than
that of Lender or Marriott (which consent has been obtained)) under any
indenture or loan or credit agreement or any other agreement, lease or
instrument to which Borrower is a party or by which its property is bound or
affected;

     (n)  the consent of Lender to the Transfer and the Leasing shall not be
deemed an agreement by Lender to accept additional changes to the Loan
Documents, to waive any defaults under or breaches of the Loan Documents,
whether now or hereafter existing, or to waive any of its rights under the Loan
Documents;

     (o)  this Agreement constitutes a legal, valid and binding obligation of
Borrower in favor of Lender subject to all laws, including equitable principles,
insolvency laws, and other matters applying to creditors.

     6.   Modification of Loan Agreement.  All references in the Loan Agreement
          ------------------------------
and the other Loan Documents to Crestline Capital, including references in
Sections 5.1(m), 5.2(c)(i-ii) and 9.3(b) of the Loan Agreement, shall hereafter
be references to "Apple Hospitality Two, Inc., a Virginia corporation", and AHT
hereby affirms all of the obligations of Crestline Capital under the Loan
Agreement.

     7.   Lender's Consent to Transfer and the Leasing; Release of Crestline
          ------------------------------------------------------------------
Capital.  Subject to the satisfaction of all of the conditions precedent
-------
described in Section 3 above, and except as expressly provided herein, Lender
consents to the Transfer and the Leasing and agrees to release and forever
discharge Crestline Capital and its affiliates, officers, directors and
employees from any and all further obligations and liabilities of any kind it
may now or hereafter have under the Loan Documents, except for (a) any
environmental or other damage to the Properties occurring prior to Closing for
which Crestline Capital would be liable or responsible pursuant to that certain
Environmental Indemnity Agreement dated as of December 29, 1999 by and among
Borrower, Crestline Capital and the Partnership in favor of the Original Lender,
and (b) any acts arising from fraudulent or tortious conduct, including
intentional or negligent misrepresentation of financial data presented to Lender
by or on behalf of Crestline Capital (the "Release").

     8.   Limitation of Consent.  Lender's consent in this Agreement is strictly
          ---------------------
limited to the Transfer and the Leasing and this Agreement shall not constitute
a waiver or modification of any requirement of obtaining Lender's consent to any
further transfer of partnership interests in the Partnership or any future
transfer of any other interests in Borrower or its constituent members, or any
future transfer or leasing of the Properties or any portion thereof or interest

                                       8
<PAGE>

therein, nor shall it constitute a modification of the terms, provisions, or
requirements in the Loan Documents in any respect except as expressly provided
herein.  The Loan Documents are hereby ratified and except as expressly modified
in this Agreement, remain unmodified and are in full force and effect.

     9.   No Representations by Lender.  Borrower acknowledges and agrees that
          -----------------------------
Lender has made no representation or warranty, either express or implied,
regarding the Transfer or the Leasing or the Properties and has no
responsibility whatsoever with respect to the Properties, the condition of the
Properties or the use, occupancy or status of the Properties. To the extent
Borrower has any claims now or in the future which in any manner relate to the
Properties, the condition of the Properties, or the use, occupancy or status of
the Properties, the same shall not be asserted against Lender or its agents,
employees, professional consultants, affiliated entities, master servicers, sub-
servicers, special servicers, primary servicers, successors or assigns, or
asserted as a defense to any of the Loan Documents.

     10.  Effect of Agreement.  Upon the complete and timely satisfaction of the
          -------------------
conditions precedent set forth in Section 3 above, this Agreement and the other
documents being executed concurrently herewith shall be deemed to form a part of
the Loan Documents and the Release shall be deemed irrevocably granted (and
Crestline Capital is hereby made a third party beneficiary of this Section 10).
This Agreement shall not prejudice any present or future rights, remedies or
powers belonging or accruing to Lender under the Loan Documents (except as
affected by the Release), nor shall this Agreement impair the lien created by
the Mortgages.

     11.  No Effect on Liens or Priority.  Nothing in this Agreement shall in
          ------------------------------
any way release, diminish or affect the first position lien of the Mortgages or
any liens created by, or the agreements or covenants contained in, the Loan
Documents or the first-lien priority of any such liens. Borrower agrees that the
Note, the Mortgages and the other Loan Documents shall secure all other sums
that may be advanced in the future by Lender pursuant to the terms of the Loan
Documents.

     12.  Additional Representations and Warranties of Borrower.  Borrower
          -----------------------------------------------------
hereby represents and warrants that:

     (a)  Borrower is the owner of the Properties;

     (b)  any court or third-party approvals necessary for Borrower to enter
into this Agreement have been obtained;

     (c)  the entities and/or persons executing this Agreement on behalf of
Borrower are duly authorized to execute and deliver this Agreement;

     (d)  this Agreement and the Loan Documents are in full force and effect and
the transactions contemplated herein and therein constitute valid and binding
obligations enforceable by Lender in accordance with their terms and have not
been modified either orally or in writing;

     (e)  Lender has not waived any requirements of the Loan Documents or any of
Lender's rights thereunder;

                                       9
<PAGE>

     (f)  to Borrower's knowledge, no Event of Default (as defined in the
Mortgages) exists, nor does any event exist which, as a result of the passage of
time or the expiration of any cure period, or both, would constitute an Event of
Default; and

     (g)  all representations and warranties referred to herein shall be true as
of the date of this Agreement and Closing and shall survive closing.

     13.  Intentionally Omitted.

     14.  Release of Lender.  In consideration of Lender's agreement to enter
          -----------------
into this Agreement, Borrower, Crestline Capital, and each of the Partnership,
AHT and Apple Suites (each as a "Borrower Principal") (collectively, the
"Releasing Parties") hereby agree as follows:

     (a)  Releasing Parties jointly and severally release and forever discharge
Lender and its predecessors, successors, assigns, partners, directors, officers,
agents, attorneys, administrators, trustees, subsidiaries, affiliates,
beneficiaries, shareholders, representatives, master servicers, sub-servicers,
primary servicers, special servicers, servants and employees (the "Released
Parties") from any and all rights, proceedings, agreements, contracts,
judgments, debts, costs, expenses, promises, duties, claims, demands, cross-
actions, controversies, causes of action, damages, rights, liabilities and
obligations, at law or in equity whatsoever, known or unknown, suspected or
unsuspected, choate or inchoate, whether past, present or future, now held,
owned or possessed by Releasing Parties individually or collectively as against
the Released Parties from the beginning of time to the date of this Agreement
under common law or statutory right, known or unknown, arising, directly or
indirectly, proximately or remotely, out of the Properties, the Loan or any of
the Loan Documents, this Agreement or any of the documents, instruments or any
other transactions relating thereto or the transactions contemplated thereby
including, without limitation, any and all rights, proceedings, agreements,
contracts, judgments, debts, expenses, promises, duties, claims, demands, cross-
actions, controversies, causes of action, damages, rights, liability and
obligations whether based upon tort, fraud, breach of any duty of fair dealing,
breach of confidence, undue influence, duress, economic coercion, conflict of
interest, negligence, bad faith, intentional or negligent infliction of mental
distress, tortious interference with contractual relations, tortious
interference with corporate governance or prospective business advantage, breach
of contract, deceptive trade practices, libel, slander, conspiracy or any claim
for wrongfully accelerating the Note or wrongfully attempting to foreclose on
any collateral relating to the Note, contract or usury, but only to the extent
that the foregoing arise in connection with events which occurred prior to the
date of this Agreement (collectively, the "Released Claims");

     (b)  Without limiting the generality of the foregoing, this release shall
include the following matters: all aspects of this Agreement, the Loan Documents
and the negotiations between or on behalf of the Releasing Parties concerning
this Agreement and the other Loan Documents, including, but not limited to, all
meetings, telephone calls, correspondence and/or other contacts among or on
behalf of the Releasing Parties, on the one hand, and Lender, on the other hand,
incident to the attempts of said parties to reach an agreement, or in connection
with the Loan Documents;

                                       10
<PAGE>

     (c)  This release is intended to release all liability of any character
claimed for damages, of any type or nature, for injunctive or other relief, for
attorneys' fees, interest or any other liability whatsoever, whether statutory,
or contractual or tort in character, or of any other nature or character, now or
henceforth in any way related to any and all matters and dealings of any nature
whatsoever asserted or assertable by or on behalf of Releasing Parties against
Lender, and relating to the Properties or the Loan, including any loss, cost or
damage in connection with, or based upon, any breach of fiduciary duty, breach
of any duty of good faith or fair dealing, breach of confidence, breach of
funding commitment, breach of any other duty, breach of any statutory right,
fraud, usury, undue influence, duress, economic coercion, conflict of interest,
negligence, bad faith, malpractice, violations of the Racketeer Influenced and
Corrupt Organizations Act, intentional or negligent infliction of mental
distress, tortious interference with corporate or other governance or
prospective business advantage, breach of contract, deceptive trade practices,
libel, slander, defamation, conspiracy or any other cause of action, but only to
the extent that the foregoing arise in connection with events which occurred
prior to the date of execution and delivery hereof.

     (d)  Releasing Parties collectively and individually understand and agree
that this is a full, final and complete release and agree that this release may
be pleaded as an absolute and final bar to any or all suit or suits pending or
which may hereafter be filed or prosecuted by the Releasing Parties against the
Released Parties in respect of any of the matters released hereby, and that no
recovery on account of the matters described herein may hereafter be had from
Released Parties, and that the consideration given for this release is no
admission of liability and that neither Releasing Parties nor those claiming
under them will ever claim that it is.

     (e)  Each of Releasing Parties expressly acknowledges and waives any and
all rights and benefits conferred upon it by the provisions of Section 1542 of
the California Civil Code, which provides:

          A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE
          CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT
          THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM,
          MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
          DEBTOR.

     Each of Releasing Parties acknowledges that the foregoing waiver of the
provisions of Section 1542 of the California Civil Code was separately bargained
for, and expressly consents that this Agreement shall be given full force and
effect in accordance with each and all of its express terms and provisions,
including those terms and provisions relating to unknown or unsuspected claims,
demands and causes of action, if any, to the same effect as those terms and
provisions relating to any other claims, demands and causes of action
hereinabove specified.

     (f)  The provisions, waivers and releases set forth in this Section 14 are
                                                                 ----------
binding upon Releasing Parties and their respective agents, employees,
representatives, officers, directors, general partners, limited partners, joint
shareholders, beneficiaries, trustees, administrators, subsidiaries, affiliates,
employees, servants and attorneys.

                                       11
<PAGE>

     15.  Notices.  All notices and other communications shall have been duly
          -------
given and shall be effective if (a) delivered by hand courier, (b) transmitted
via telecopy (or other facsimile device) to the number set forth in Exhibit C
                                                                    ---------
to the Loan Agreement, (c) delivered prepaid by a reputable national overnight
air courier service, or (d) sent by certified or registered mail, postage
prepaid in each case to the respective party at the address set forth in
Exhibit C of the Loan Agreement, or at such other address as such party may
---------
specify by written notice to the other party hereto and shall in each case be
effective upon delivery or refusal of the addressee to accept delivery.
No notice of change of address shall be effective except upon actual receipt.
This Section 15 shall not be construed in any way to affect or impair any
     ----------
waiver of notice or demand provided in any Loan Document or to require the
giving of notice or demand to or upon any Person in any situation or for any
reason. In addition to the foregoing, Lender and Borrower may, from time to
time, specify to the other party additional parties to whom copies of notices
shall be sent by providing to the other party written notice of the name,
address, telephone number and telecopy number of any such additional notice
party. Delivery to such additional parties shall not be required to cause
notices delivered to the principal parties to be effective. Each such additional
notice party shall be entitled to receive and/or give any notice required or
permitted to be given under the Loan Agreement or any other Loan Document.
Additionally, the Loan Agreement and the Mortgages are supplemented to include
the following addresses:

          Lender:

          Wells Fargo Bank Minnesota, N.A.
          c/o Bank of America, N.A.
          Capital Markets Servicing Group
          Mail Code: CA9-703-26-10
          P.O. Box 3609
          Los Angeles, California 90051-3609
          Attention: Servicing Manager

          Borrower:

          Residence Inn III LLC
          c/o Apple Hospitality Two, Inc.
          10 South Third Street
          Richmond, Virginia  23219
          Attention:  Glade Knight

          with a copy to:

          Jenkens & Gilchrist, P.C.
          1445 Ross Avenue
          Suite 3200
          Dallas, Texas  75202
          Attention:  Thomas E. Davis

     16.  Bankruptcy of Borrower.  Borrower, as a material inducement to Lender
          ----------------------
to enter into this Agreement, and in consideration of the mutual covenants
contained in this Agreement,

                                       12
<PAGE>

and for other good and valuable consideration, by its execution hereof covenants
and agrees that in the event Borrower shall (a) file any petition with any
bankruptcy court or be the subject of any petition under the United States
Bankruptcy Code (11 U.S.C. (S)101 et seq., the "Code"), (b) file or be the
                                  ------
subject of any petition seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any present or
future federal or state act or law relating to bankruptcy, insolvency, or other
relief for debtors, (c) have sought or consented to or acquiesced in the
appointment of any trustee, receiver, conservator, or liquidator, or (d) be the
subject of any order, judgment, or decree entered by any court of competent
jurisdiction approving a petition filed against such party for any
reorganization, arrangement, composition, readjustment, liquidation,
dissolution, or similar relief under any present or future federal or state act
or law relating to bankruptcy, insolvency, or relief for debtors, Lender shall
thereupon be entitled, and Borrower irrevocably consents, to the entry of an
order by a bankruptcy court granting to Lender relief from any automatic stay
imposed by Section 362 of the Code, or otherwise, on or against the exercise of
the rights and remedies otherwise available to Lender as provided in the Loan
Documents, this Agreement or as otherwise provided by law or in equity, and
Borrower hereby irrevocably waives its right to object to, attempt to enjoin or
otherwise interfere with such relief and the exercise and enforcement by Lender
of its rights and remedies following entry of such order. Without limiting the
generality of the immediately preceding sentence, Borrower agrees that Lender
will be entitled to and hereby consents to immediate relief from the automatic
stay imposed by the Code to allow Lender to take any and all actions necessary,
desirable or appropriate to enforce any rights Lender may have under the Loan
Documents, including, but not limited to, the right to possession of the
Properties, collection of rents, and/or the commencement or continuation of an
action to foreclose Lender's liens and security interests. Borrower further
agrees that the filing of any petition for relief under the Code by Borrower,
without unanimous consent of its limited liability company managers, which
postpones, prevents, delays, or otherwise hinders Lender's efforts to collect
the amounts due under the Note or to liquidate any of the collateral therefor
shall be deemed to have been filed in bad faith and, therefore, shall be subject
to prompt dismissal or conversion to a case under Chapter 7 of the Code upon
motion therefor by Lender. Further, Borrower agrees that it will not seek, apply
for or cause the entry of any order enjoining, staying, or otherwise prohibiting
or interfering with Lender's obtaining an order granting relief from the
automatic stay and enforcement of any rights which Lender may have under the
Loan Documents, including, but not limited to, Lender's right to possession of
the Properties, collection of rents and/or the commencement or continuation of
an action to foreclose Lender's liens and security interests under the Loan
Documents.

     17.  Compliance With Interest Law.  It is the intention of Borrower and
          ----------------------------
Lender to conform strictly to the Interest Law (herein defined). Accordingly,
Borrower and Lender agree that any provisions contained in the Note or in any of
the other Loan Documents to the contrary notwithstanding, the aggregate of all
interest, or consideration constituting interest under the Interest Law, that is
taken, reserved, contracted for, charged or received under the Note or under any
of the aforesaid documents or otherwise in connection with this loan transaction
shall under no circumstances exceed the maximum amount of interest allowed by
the Interest Law. If any excess interest is provided for in the Note or in any
of the other Loan Documents, then (a) the provisions of this paragraph shall
govern and control, (b) neither Borrower nor Borrower's successors or assigns
shall be obligated to pay the amount of such interest to the extent that it is
in excess of the maximum amount of interest allowed by the Interest Law, (c) any
such excess

                                       13
<PAGE>

shall be deemed a mistake and canceled automatically and, if theretofore paid,
shall be credited against the indebtedness (or if the Note shall have been paid
in full, refunded to Borrower), and (d) the effective rate of interest shall be
automatically subject to reduction to the Maximum Legal Rate of Interest (as
hereinafter defined). To the extent permitted by the Interest Law, all sums paid
or agreed to be paid to Lender for the use, forbearance, or detention of the
indebtedness shall be amortized, prorated, allocated and spread throughout the
full term of the Note. For purposes of the Note, "Interest Law" shall mean any
present or future law of the State of Maryland (meaning the internal laws of
said state and not the laws of said state relating to choice of law), the United
States of America or any other jurisdiction, which has application to the
interest and other charges under the Note or under any of the other Loan
Documents and to the classification of Borrower under such law. For purposes of
the Note, the "Maximum Legal Rate of Interest" shall mean the maximum effective
contract rate of interest that Lender may from time to time, by agreement with
the Borrower, legally charge Borrower and in regard to which Borrower would be
prevented from successfully raising the claim or defense of usury under the
Interest Law as now or hereafter construed by courts of appropriate
jurisdiction.

     18.  Terms Generally.  (a) Each definition contained in this or any other
          ---------------
Article of this Agreement shall apply equally to both the singular and plural
form of the term defined.  Each pronoun shall include the masculine, the
feminine and neuter form, whichever is appropriate to the context.  The words
"included", "includes" and "including" shall each be deemed to be followed by
the phrase, "without limitation."  The words, "herein", "hereby", "hereof", and
"hereunder" shall each be deemed to refer to this entire Agreement and not to
any particular Article or Section hereof.  Notwithstanding the foregoing, if any
law is amended so as to broaden the meaning of any term defined in it, such
broader meaning shall apply subsequent to the effective date of such amendment.
Where a defined term derives its meaning from a statutory reference, any
regulatory definition is broader than the statutory reference and any reference
or citation to a statute or regulation shall be deemed to include any amendments
to that statute or regulation and judicial and administrative interpretations of
it, and (b) the following terms shall have the respective meanings ascribed to
them in the Uniform Commercial Code as enacted and in force in the State of
Maryland:  accessions, accounts, continuation statement, equipment, financing
statement, fixtures, general intangibles, personal property, proceeds, security
interest and security agreement.

     19.  Securities Act of 1933.  Neither Borrower nor any agent acting for
          ----------------------
Borrower has offered the Note or any similar obligation of Borrower for sale to
or solicited any offers to buy the Note or any similar obligation of Borrower
from any person or party other than Lender, and neither Borrower nor any agent
acting for Borrower will take any action which would subject the sale of the
Note to the provisions of Section 5 of the Securities Act of 1933, as amended.

     20.  Compliance with ERISA.  Borrower is not and will not be an "employee
          ---------------------
benefit plan" as defined in Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), which is subject to plans for
                                   -----
purposes of Title I of ERISA, and none of the transactions contemplated hereby
will result in a "governmental plan" within the meaning of Section 3(32) of
ERISA and transactions by Borrower are not and will not be subject to state
statutes regulating investments and fiduciary obligations with respect to
governmental plans.

                                       14
<PAGE>

     21.  Documentation Requirements, Sufficiency of Consents and Approvals.
          -----------------------------------------------------------------
Each written instrument required by this Agreement or any of the other Loan
Documents to be furnished to Lender shall be duly executed by the person or
party specified (or where no particular person or party is specified, by such
person or party as Lender shall require), duly acknowledged where required by
Lender and, in the case of affidavits and similar sworn instruments, duly sworn
to and subscribed before a notary public duly authorized to act in the premises
by governmental authority; shall be furnished to Lender in one or more copies as
required by Lender; and shall in all respects be in form and substance
reasonably satisfactory to Lender and its legal counsel. All title policies,
surveys, appraisals, and other evidence, information or documentation required
by Lender shall be in form and substance reasonably satisfactory to Lender and
its legal counsel in all respects.

     22.  Evidentiary Requirements.  Where evidence of the existence or non-
          ------------------------
existence of any circumstance or condition is required by this Agreement to be
furnished to Lender, such evidence shall in all respects be in form and
substance reasonably satisfactory to Lender.

     23.  Number, Order and Captions Immaterial.  The numbering, order and
          -------------------------------------
captions or headings of the several articles, sections and paragraphs of this
Agreement, the Note, the Mortgages and the other Loan Documents are for
convenience of reference only and shall not be considered in construing such
instruments.

     24.  Modifications.  Neither this Agreement, nor any term or provision
          -------------
hereof, may be changed, discharged or terminated, except by an instrument in
writing signed by the party against whom enforcement of the change, discharge or
termination is sought.

     25.  General Provisions.
          ------------------
               a.  Governing Law.  This Agreement shall be governed by the laws
                   -------------
          of the State of Maryland;

               b.  Severability.  In the event one or more provisions of this
                   ------------
          Agreement shall be invalid, illegal or unenforceable, the validity or
          enforceability of the remaining provisions shall not in any way be
          affected;

               c.  Rights Cumulative; Enforcement.  All of Lender's and
                   ------------------------------
          Borrower's rights, if any, under this Agreement shall be in addition
          to all of their respective rights under the Loan Documents, or
          available at law or in equity. This Agreement is subject to
          enforcement by Lender, at law or in equity, including, without
          limitation, actions for damages or specific performance;

               d.  Costs of Enforcement.  If any of the parties hereto shall
                   --------------------
          retain the services of an attorney or any other consultants in order
          to enforce this Agreement, or any portion hereof, the non-prevailing
          party(ies) agrees to pay the prevailing party(ies) any and all costs
          and expenses, including, without limitation, reasonable attorneys'
          fees, costs and disbursements, incurred by the prevailing party(ies)
          as a result thereof;

                                      15
<PAGE>

               e.  Counterparts.  This Agreement may be executed and
                   ------------
          acknowledged in any number of separate counterparts, each of which,
          when so executed and delivered, together shall be deemed an original,
          but all of which, collectively and separately, shall constitute one
          and the same agreement. All signatures need not be on the same
          counterpart. Each individual executing this Agreement in a
          representative capacity has been duly authorized to do so by all
          appropriate action;

               f.  Further Assurances.  Each of the parties hereto agrees to
                   ------------------
          execute and deliver all such documents and instruments, and do all
          such other acts and things, as may be reasonably required in the
          future to perfect, assure, confirm or effectuate the provisions of
          this Agreement;

               g.  Assignment.  This Agreement shall bind and inure to the
                   ----------
          benefit of the respective successors and assigns of each of the
          parties hereto; provided, however, Borrower may not assign this
          Agreement or any rights hereunder without Lender's prior written
          consent and any prohibited assignments shall be absolutely void.
          Lender reserves the right to sell, assign, transfer, negotiate or
          grant participations in all or any part of, or any interest in
          Lender's rights and benefits hereunder and under the Loan Documents,
          or any of them.

     26.  NO JURY TRIAL.  BORROWER AND LENDER HEREBY SEVERALLY, VOLUNTARILY,
          -------------
KNOWINGLY AND INTELLIGENTLY WAIVE ANY AND ALL RIGHTS TO TRIAL BY JURY IN ANY
LEGAL ACTION OR PROCEEDING ARISING OUT OF THE NEGOTIATION, DOCUMENTATION,
ENFORCEMENT OR TERMS OF THIS AGREEMENT, THE NOTE, MORTGAGES OR ANY OTHER LOAN
DOCUMENT OR CONCERNING THE OBLIGATIONS UNDER THIS AGREEMENT OR THE LOAN
DOCUMENTS AND/OR WITH REGARD TO THE PROPERTY OR PERTAINING TO ANY TRANSACTION
RELATED TO OR CONTEMPLATED IN THE MORTGAGES, REGARDLESS OF WHETHER SUCH ACTION
OR PROCEEDING CONCERNS ANY CONTRACTUAL OR TORTIOUS OR OTHER CLAIM. BORROWER
ACKNOWLEDGES THAT THIS WAIVER OF JURY TRIAL IS A MATERIAL INDUCEMENT TO LENDER'S
CONSENT TO THE TRANSFER AND THE LEASING AND THAT LENDER WOULD NOT HAVE CONSENTED
TO THE TRANSFER AND THE LEASING WITHOUT THIS JURY TRIAL WAIVER. BORROWER
REPRESENTS AND WARRANTS THAT IT HAS BEEN REPRESENTED BY AN ATTORNEY OR HAS HAD
AN OPPORTUNITY TO CONSULT WITH AN ATTORNEY IN CONNECTION WITH THIS AGREEMENT AND
UNDERSTAND THE LEGAL EFFECT OF THIS JURY TRIAL WAIVER.

     27.  ENTIRE AGREEMENT.  THIS AGREEMENT AND THE LOAN DOCUMENTS CONTAIN THE
          ----------------
ENTIRE AGREEMENT OF THE PARTIES HERETO WITH RESPECT TO THIS AGREEMENT, THE
SUBJECT MATTER OF THIS AGREEMENT, THE TRANSFER AND THE LEASING OR LENDER'S
CONSENT TO THE TRANSFER AND THE LEASING AND SUPERSEDE ANY PRIOR WRITTEN OR ORAL
AGREEMENTS BETWEEN THEM CONCERNING SAID SUBJECT MATTER. THERE ARE NO
REPRESENTATIONS, AGREEMENTS, ARRANGEMENTS, OR UNDERSTANDINGS, ORAL OR WRITTEN,
BETWEEN AND/OR AMONG THE PARTIES HERETO RELATING

                                       16
<PAGE>

TO THE SUBJECT MATTER CONTAINED IN THIS AGREEMENT, WHICH ARE NOT FULLY EXPRESSED
HEREIN OR IN THE LOAN DOCUMENTS.

     28.  NO ORAL ARGUMENTS.  THE WRITTEN LOAN DOCUMENTS, INCLUDING THIS
          -----------------
AGREEMENT, REPRESENT THE FINAL AGREEMENT BETWEEN AND AMONG THE PARTIES AND MAY
NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN OR
AMONG THE PARTIES.

                 [Remainder of Page Intentionally Left Blank]

                                       17
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.

BORROWER:

RESIDENCE INN III, LLC,
a Delaware limited liability company

By:  /s/ Glade M. Knight
   ------------------------------
Its: President
    -----------------------------

LENDER:

WELLS FARGO BANK MINNESOTA, N.A., as Trustee
for the Registered Certificateholders of Banc of America
Commercial Mortgage Inc. Commercial Mortgage Pass-Through
Certificates, Series 2000-2

By:  ORIX Capital Markets, LLC, a Delaware
     limited liability company (f/k/a ORIX Real
     Estate Capital Markets, LLC, a Delaware
     limited liability company), as Master Servicer

     By: /s/ [illegible]
        ---------------------------
          Its: Portfolio Manager
              ---------------------
<PAGE>

                                    JOINDER

     Crestline Capital hereby joins in the foregoing Agreement for the sole
purpose of (i) agreeing to the provisions of Section 14 thereof and (ii) making
the following representations and warranties for the benefit of Lender:

     Immediately prior to the consummation of the transactions described in
Recital F of the Agreement:

     1.  Marriott Residence Inn USA Limited Partnership, a Delaware limited
partnership (the "Partnership"), owned one hundred percent (100%) of the equity
membership interest in Borrower as the sole equity member of Borrower.

     2.  CC USAGP LLC, a Delaware limited liability company ("CC USAGP"), owned
a five percent (5%) partnership interest in the Partnership, as the sole general
partner of the Partnership;

     3.  CCMH Desert Springs Corporation, a Delaware corporation ("CCMG Desert
Springs"), owned a one percent (1%) partnership interest in the Partnership, as
a limited partner of the Partnership;

     4.  CCRI USA LLC, a Delaware limited liability company ("CCRI USA"), owned
a ninety-four percent (94%) partnership interest in the Partnership, as a
limited partner of the Partnership.

     5.  Crestline RES III Corporation, a Delaware corporation ("Crestline RES
III"), owned the sole non-equity member interest in Borrower; and

     6.  Crestline Capital owned one hundred percent (100%) of the stock shares
in Crestline RES III, as the sole shareholder of Crestline RES III.

     By accepting delivery of the foregoing Agreement and this Joinder, Lender
shall be irrevocably deemed to  have agreed to the full Release of Crestline
Capital as described in Sections 7 and 10 of the Agreement.

CRESTLINE CAPITAL CORPORATION,

a Maryland corporation

By: /s/ Larry K. Harvey
    --------------------------
Its: Senior Vice President
    --------------------------
<PAGE>

                                 Exhibits A-J

                             Property Descriptions

                                   [omitted]
<PAGE>

                         BORROWER PRINCIPALS' CONSENT

     Apple Hospitality Two, Inc., a Virginia corporation, and Apple Suites
Advisors, Inc., a Virginia corporation (collectively, "Borrower Principals")
hereby consent to the terms, conditions and provisions of the foregoing Consent
and Amendment Agreement with Release ("Agreement") and the transactions
contemplated by that Agreement.  Borrower Principals agree to be bound by the
provisions of the release set forth in Section 14 of the Agreement, the same as
though Borrower Principals had been a signatory to said Agreement.  Borrower
Principals hereby reaffirm the full force and effectiveness of the
Acknowledgment and Agreement of the Borrower Principals to Personal Liability
for the Exceptions to Non-Recourse executed by Borrower Principals on the date
hereof ("Acknowledgment").  In addition, Borrower Principals acknowledge that
their obligations under the Acknowledgment are separate and distinct from those
of Borrower on the Loan.

Dated September 28, 2001

APPLE HOSPITALITY TWO, INC.,
a Virginia corporation

By:  /s/ Glade M. Knight
     -------------------------------
     Glade M. Knight
     -------------------------------
     President
     -------------------------------

APPLE SUITES ADVISORS, INC.,
a Virginia corporation

By:  /s/ Glade M. Knight
     -------------------------------
     Glade M. Knight
     -------------------------------
     President
     -------------------------------
<PAGE>

          ACKNOWLEDGMENT AND AGREEMENT OF THE BORROWER PRINCIPALS TO
             PERSONAL LIABILITY FOR THE EXCEPTIONS TO NON-RECOURSE

     Apple Hospitality Two, Inc., a Virginia corporation ("AHT"), and Apple
Suites Advisors, Inc., a Virginia corporation ("Apple Suites") (each a "Borrower
Principal") hereby represent to the Lender that AHT has a direct or an indirect
ownership interest in the Borrower.

     BY SIGNING BELOW, each Borrower Principal understands, accepts and agrees
to the provisions of the Note, including without limitation, Sections 7 and 8 of
the Note.  No transfer of AHT's ownership interest in the Borrower or in any
other entity which directly or indirectly has an ownership interest in the
Borrower shall release either Borrower Principal from liability hereunder,
unless the Lender shall have approved the transfer.  No such Borrower Principal
shall exercise any right of subrogation against the Borrower by reason of any
payment by the Borrower Principal pursuant to the Note, including without
limitation, Sections 7 and 8 of the Note, prior to the full and final
satisfaction of the Note and all other obligations of the Borrower under the
Loan Documents.

     Notwithstanding any of the foregoing to the contrary, so long as no Event
of Default has occurred under any of the Loan Documents, if at any time after
twenty-four (24) months from the Closing, the Debt Service Coverage Ratio (as
defined in the Loan Agreement) for the Trailing Twelve Months (as hereinafter
defined) exceeds 2.50 to 1 (such time being referred to herein as the "Apple
Suites Release Date"), then, from and after the Apple Suites Release Date, Apple
Suites shall have no further liability under the Note, including without
limitation, Sections 7 and 8 of the Note (it being understood that Apple Suites
shall continue to be liable under Sections 7 and 8 of the Note for claims
arising prior to the Apple Suites Release Date).  For purposes hereof, "Trailing
Twelve Months" shall mean the twelve (12) month period ending with the last
calendar day of the month preceding the date that Apple Suites furnished Lender
with an approved written request for release from liability in accordance with
the terms of this paragraph.

Dated September 28, 2001

BORROWER PRINCIPALS
-------------------

APPLE HOSPITALITY TWO, INC.,
a Virginia corporation

By:  /s/ Glade M. Knight
     -----------------------------------
     Glade M. Knight
     -----------------------------------
     President
     -----------------------------------

APPLE SUITES ADVISORS, INC.,
a Virginia corporation

By:  /s/ Glade M. Knight
     -----------------------------------
     Glade M. Knight
     -----------------------------------
     President
     -----------------------------------
<PAGE>

           REAFFIRMATION AND CONSENT OF ORIGINAL BORROWER PRINCIPAL

     Marriott Residence Inn USA Limited Partnership, a Delaware limited
partnership, ("Borrower Principal") hereby consents to the terms, conditions and
provisions of the foregoing Consent and Amendment Agreement with Release
("Agreement") and the transactions contemplated by that Agreement.  Borrower
Principal agrees to be bound by the provisions of the release set forth in
Section 14 of the Agreement, the same as though Borrower Principal had been a
signatory to said Agreement.  Borrower Principal hereby reaffirms the full force
and effectiveness of the Acknowledgment and Agreement of the Borrower Principals
to Personal Liability for the Exceptions to Non-Recourse attached to the Note
dated December 29, 1999 ("Acknowledgment").  In addition, Borrower Principal
acknowledges that its obligations under the Acknowledgment are separate and
distinct from those of Borrower on the Loan.

Dated September 28, 2001

BORROWER PRINCIPAL
------------------

MARRIOTT RESIDENCE INN USA
LIMITED PARTNERSHIP
a Delaware limited partnership

By:  AHT Res III GP, Inc.,
     a Virginia corporation,
     Its general partner

     By: /s/ Glade M. Knight
         ----------------------------
         Glade M. Knight
         ----------------------------
         President
         ----------------------------