Document:

EXHIBIT 10.2

                                 SCHEDULE 2.1(i)

                               COMMENCEMENT DATES

Homewood Suites(R) Boulder
Boulder, Colorado

June 30, 2000

<PAGE>

                                SCHEDULE 3.1(A)-9

                                   BASE RENTS

Homewood Suites(R) Boulder
Boulder, Colorado

                                                               $774,052

                                      -2-

<PAGE>

                                SCHEDULE 3.1(b)-9
                            SUITE REVENUE BREAKPOINT

HOMEWOOD SUITES(R) BOULDER
BOULDER, COLORADO

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------

QUARTERS                2000           2001          2002           2003          2004
--------                ----           ----          ----           ----          ----
<S>                 <C>          <C>            <C>           <C>            <C>
1ST QUARTER               $--        $251,566       $259,306      $270,917       $278,658

2ND QUARTER            $3,096        $503,132       $518,612      $541,834       $557,316

3RD QUARTER          $281,754        $754,698       $777,918      $812,751       $835,974

4TH QUARTER          $560,412      $1,006,264     $1,037,224    $1,083,668     $1,114,632

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

<CAPTION>
--------------------------------------------------------------------------------------------

QUARTERS                2005           2006          2007           2008          2009
--------                ----           ----          ----           ----          ----
<S>               <C>            <C>            <C>           <C>            <C>
1ST QUARTER           $286,398       $294,139      $301,879       $309,620      $317,360

2ND QUARTER           $572,796       $588,278      $603,758       $619,240      $634,720

3RD QUARTER           $859,194       $882,417      $905,637       $928,860      $952,080

4TH QUARTER         $1,145,592     $1,176,556    $1,207,516     $1,238,480    $1,269,440

--------------------------------------------------------------------------------------------
</TABLE>

                                      -3-EXHIBIT 10.3

[GRAPHIC OMITTED]

                                                               BOULDER, COLORADO

                                                              PROMUS HOTELS, INC
                                                              755 CROSSOVER LANE
                                                        MEMPHIS, TENNESSEE 38117
                                                                       99-hom/co

                                                          HOMEWOOD SUITES
                                                         LICENSE AGREEMENT

DATED  JUNE 30,  2000  BETWEEN  PROMUS  HOTELS,  INC.,  A  DELAWARE  CORPORATION
      ----------------
("LICENSOR"),   AND  APPLE  SUITES  MANAGEMENT,  INC.,  A  VIRGINIA  CORPORATION
                     -----------------------------------------------------------
("LICENSEE"), WHOSE ADDRESS IS 306 EAST MAIN STREET, RICHMOND, VIRGINIA 23219 .
                               -------------------------------------------------

                          THE PARTIES AGREE AS FOLLOWS:

1.       THE LICENSE.

         Licensor  owns,  operates and  licenses a system  designed to provide a
         distinctive,  high quality  hotel  service to the public under the name
         "Homewood  Suites"  (the  "SYSTEM").   High  standards  established  by
         Licensor  are the  essence of the  System.  Future  investments  may be
         required  of  Licensee  under  this  License  Agreement  ("AGREEMENT").
         Licensee has independently investigated the risks of the business to be
         operated hereunder,  including current and potential market conditions,
         competitive factors and risks, has read Licensor's  "Franchise Offering
         Circular,"  and has made an  independent  evaluation of all such facts.
         Aware of the  relevant  facts,  Licensee  desires  to enter  into  this
         Agreement  in  order to  obtain  a  license  to use the  System  in the
         operation of a Homewood  Suites hotel  located at 4950  BASELINE  ROAD,
         BOULDER,  COLORADO  80303  (the  "HOTEL")  subject to the terms of this
         Agreement.

         A.       THE HOTEL.  The Hotel  comprises all  structures,  facilities,
                  appurtenances,  furniture,  fixtures,  equipment,  and  entry,
                  exit, parking and other areas from time to time located on the
                  site  approved for the Hotel and  acknowledged  by Licensor in
                  anticipation of the execution of this Agreement, or located on
                  any land from time to time approved by Licensor for additions,
                  signs or other facilities. No change in the number of approved
                  guest suites ("GUEST  SUITES")  reflected on Attachment B (the
                  "RIDER") and no other  significant  change in the Hotel may be
                  made without Licensor's prior approval. Redecoration and minor
                  structural  changes that comply with Licensor's  standards and
                  specifications  will not be considered  significant.  Licensee
                  represents  that it is  entitled  to  possession  of the Hotel
                  during the entire License Term without restrictions that would
                  interfere with anything contemplated in this Agreement.

         B.       THE SYSTEM. The System is composed of elements,  as designated
                  from time to time by Licensor,  designed to identify "Homewood
                  Suites hotels" to the consuming public and/or to contribute to
                  such   identification   and  its   association   with  quality
                  standards.  The System at present  includes  the service  mark
                  "Homewood  Suites"  and  such  other  service  marks  and such
                  copyrights,  trademarks and similar  property rights as may be
                  designated  from  time to time by  Licensor  to be part of the
                  System;  access  to a  reservation  service;  distribution  of
                  advertising,   publicity  and  other  marketing  programs  and
                  materials;  the furnishing of training programs and materials,
                  standards,   specifications  and  policies  for  construction,
                  furnishing,  operation,  appearance  and service of the Hotel,
                  and  other  requirements  as  stated  or  referred  to in this
                  Agreement  and from  time to time in the  Manual  (as  defined
                  herein) or in other  communications to Licensee;  and programs
                  for  inspecting  the  Hotel  and  consulting   with  Licensee.
                  Licensor  may add  elements to the System or modify,  alter or
                  delete elements of the System (including the trade name and/or
                  brand name of the Hotel) at its sole  discretion  from time to
                  time.  Licensee is only  authorized to use  "Homewood  Suites"
                  service marks and trademarks at or in connection with the ----
                  Hotel.

<PAGE>

         C.       THE  MANUAL.  Licensee  acknowledges  the receipt of a current
                  Homewood  Suites  Standards  Manual  ("MANUAL").   The  Manual
                  contains,   among  other   matters,   minimum   standards  and
                  requirements   for   constructing,    equipping,   furnishing,
                  supplying,  operating,  maintaining  and  marketing the Hotel.
                  Licensor  shall have the right to change the Manual  from time
                  to time and Licensee agrees to abide by the Manual as changed.
                  The  Manual  shall at all times  remain the sole  property  of
                  Licensor.   Licensee  shall  use  all  reasonable  efforts  to
                  maintain the confidentiality of the Manual. Licensee shall not
                  make  or  distribute  copies  of the  Manual  or  any  portion
                  thereof.

         D.       APPLICATION OF MANUAL.  All hotels  operated within the System
                  will be subject to the Manual,  as it may from time to time be
                  modified  or revised by  Licensor.  Licensor  may, in its sole
                  discretion,  grant limited exceptions from compliance with the
                  Manual which may be made based on local  conditions or special
                  circumstances.  Each  material  change in the  Manual  will be
                  explained  in writing to  Licensee  at least 30 days before it
                  goes into  effect.  Licensee is  responsible  for the costs of
                  implementing  all changes  required because of modification to
                  the Manual.

                  Licensor  may  require  that  particular  models  or brands of
                  furniture,   fixtures,   equipment,   food,  and  other  items
                  (collectively, the "SUPPLIES") be used in the operation of the
                  Hotel  or  be  purchased   from  Licensor  or  from  a  source
                  designated by Licensor.  Otherwise,  Licensee may purchase all
                  Supplies  from  any  source  as  long  as  the  standards  and
                  specifications  in the Manual  are met,  which  standards  and
                  specifications  may be changed by Licensor  from time to time.
                  Licensee will be responsible for the costs, if any, associated
                  with the  purchase of Supplies or changing  brands,  models or
                  sources of supply.

2.       GRANT OF LICENSE.

         Licensor  hereby  grants  to  Licensee  a  nonexclusive   license  (the
         "LICENSE") to use the System only at the Hotel, only in connection with
         the operation of a Homewood Suites hotel,  only in accordance with this
         Agreement and only during the "License  Term"  beginning  with the date
         hereof and terminating as provided in Paragraph 13. The License applies
         to the  location  of the Hotel  specified  herein  and no  other.  This
         Agreement does not limit Licensor's right, or the rights of any parent,
         subsidiary,  division or affiliate of Licensor ("ENTITIES"),  to use or
         license  to others  the  System or any part  thereof or to engage in or
         license  any  business   activity  at  any  other  location.   Licensee
         acknowledges  that  Licensor and its Entities are and may in the future
         be engaged in other business activities  including activities involving
         transient lodging and related  activities which may be or may be deemed
         to be competitive with the System; that facilities,  programs, services
         and/or personnel used in connection with the System may also be used in
         connection  with such other  business  activities  of Licensor  and its
         Entities; and that Licensee is acquiring no rights hereunder other than
         the non-exclusive right to use the System in connection with a Homewood
         Suites hotel as  specifically  defined  herein in  accordance  with the
         terms of this Agreement.

3.       LICENSOR'S RESPONSIBILITIES.

         A.       TRAINING.  During the  License  Term,  Licensor  will  specify
                  required and  optional  training  programs  and provide  these
                  programs at various locations. Licensee may be charged for (i)
                  required training services and materials and (ii) for optional
                  training  services  and  materials  if provided  to  Licensee.
                  Travel,  lodging  and  other  expenses  of  Licensee  and  its
                  employees will be borne by Licensee.

         B.       RESERVATION  SERVICES.  During the  License  Term,  so long as
                  Licensee is in full  compliance with the obligations set forth
                  in this  Agreement,  Licensor will afford  Licensee  access to
                  reservation services for the Hotel.

         C.       CONSULTATION.  Licensor will,  from time to time at Licensor's
                  sole discretion,  make available to Licensee  consultation and
                  advice  in  connection   with   operations,   facilities   and
                  marketing.  Licensor shall have the right to establish fees in
                  advance    for   its    advice   and    consultation    on   a
                  project-by-project basis.

         D.       ARRANGEMENTS  FOR  MARKETING,   ETC.  Licensor  will  use  the
                  Marketing/Reservation  Contribution  for costs associated with
                  advertising,  promotion,  publicity, market research and other
                  marketing   programs   and   related   activities,   including
                  reservation  programs  and  services.  Licensor may enter into
                  arrangements   for   development,    marketing,    operations,
                  administrative,  technical and support

<PAGE>

                  functions,  facilities,  programs,  services and/or  personnel
                  with any other  entity and may use any  facilities,  programs,
                  services  and/or  personnel used in connection with the System
                  in  connection  with any business  activities of its Entities.
                  Licensor is not  obligated  to expend  funds for  marketing or
                  reservation  services in excess of the amounts  received  from
                  Licensees  using the System.  Licensor and its designees shall
                  have  no  obligation  in   administering   any  marketing  and
                  reservation activities to make expenditures for Licensee which
                  are equivalent or proportionate to Licensee's payments,  or to
                  ensure  that  any  particular   hotel  benefits   directly  or
                  proportionately from such expenditures.

         E.       INSPECTIONS/COMPLIANCE  ASSISTANCE.  Licensor has the right to
                  inspect  the  Hotel at any  time,  with or  without  notice to
                  Licensee,  to determine if the Hotel is in compliance with the
                  standards and rules of operation  set forth in the Manual.  If
                  the Hotel  fails to comply  with such  standards  and rules of
                  operation, Licensor may, at its option and at Licensee's cost,
                  require an action plan to correct the  deficiencies.  Licensee
                  must then take all steps necessary to correct any deficiencies
                  within the times established by Licensor.  Licensor's approval
                  of an action  plan does not waive any rights it may have under
                  this Agreement nor does it relieve Licensee of any obligations
                  under this Agreement.

4.       PROPRIETARY RIGHTS.

         A.       OWNERSHIP OF THE SYSTEM.  Licensee  acknowledges  and will not
                  contest,  either  directly or  indirectly,  Licensor's (or its
                  affiliates',  as the case may be)  unrestricted  and exclusive
                  ownership  of the System and any  element(s)  or  component(s)
                  thereof,  and acknowledges that Licensor has the sole right to
                  grant licenses to use all or any element(s) or component(s) of
                  the System. Licensee specifically agrees and acknowledges that
                  Licensor (or its affiliates) is the owner of all right,  title
                  and interest in and to the service mark "Homewood Suites", its
                  distinguishing  characteristics,  trade names,  service marks,
                  trademarks,  logos,  copyrights,  slogans, etc., and all other
                  marks associated with the System  ("Marks")  together with the
                  goodwill symbolized thereby and that Licensee will not contest
                  directly or indirectly  the validity or ownership of the Marks
                  either  during  the  term of  this  Agreement  or at any  time
                  thereafter. All improvements and additions whenever made to or
                  associated with the System by the parties to this Agreement or
                  anyone else,  and all service marks,  trademarks,  copyrights,
                  and service mark and trademark registrations at any time used,
                  applied for or granted in connection with the System,  and all
                  goodwill  arising from Licensee's use of the Marks shall inure
                  to the benefit of and become the  property of Licensor (or its
                  applicable affiliate).  Upon expiration or termination of this
                  Agreement,   no   monetary   amount   shall  be   assigned  as
                  attributable to any goodwill associated with Licensee's use of
                  the System or any  element(s)  or  component(s)  of the System
                  including the name or Marks.

         B.       USE OF NAME.  Licensee  will not use the  word  "Homewood"  or
                  "Homewood  Suites" or any  similar  word(s) in its  corporate,
                  partnership,  business  or  trade  name,  or in  any  Internet
                  related  name  (including a domain name) except as provided in
                  this  Agreement  or the Manual,  nor  authorize or permit such
                  word(s) to be used by anyone else.

5.       TRADEMARK AND SERVICE MARK.

         A.       TRADEMARK  DISPUTES.  Licensor  will  have the sole  right and
                  responsibility   to  handle   disputes   with  third   parties
                  concerning use of all or any part of the System,  and Licensee
                  will, at its reasonable  expense,  extend its full cooperation
                  to  Licensor in all such  matters.  All  recoveries  made as a
                  result of disputes  with third  parties  regarding  use of the
                  System  or any  part  thereof  shall  be for  the  account  of
                  Licensor.  Licensor  need not initiate  suit  against  alleged
                  imitators or infringers and may settle any dispute by grant of
                  a license or otherwise. Licensee will not initiate any suit or
                  proceeding  against  alleged  imitators or  infringers  or any
                  other suit or proceeding to enforce or protect the System.

         B.       PROTECTION  OF NAMES AND MARKS.  Both  parties will make every
                  effort  consistent  with the foregoing to protect and maintain
                  the Marks and name  "Homewood  Suites" and its  distinguishing
                  characteristics  as  standing  for the  System  and  only  the
                  System.  Licensee  agrees  to  execute  any  documents  deemed
                  necessary by Licensor or its counsel to obtain  protection for
                  Licensor's  Marks or to maintain their continued  validity and
                  enforceability.  Licensee  agrees to use such  names and Marks
                  only in  connection  with the  operation of a Homewood  Suites
                  hotel  and in the  manner  authorized  by  Licensor.  Licensee

<PAGE>
                  acknowledges  that any  unauthorized use of the names or Marks
                  shall constitute  infringement of Licensor's rights.  Licensee
                  must  notify  Licensor   immediately,   in  writing,   of  any
                  infringement or challenge to Licensee's use of the Marks or of
                  any unauthorized use or possible misuse of Licensor's Marks or
                  Licensor's proprietary information.

6.       LICENSEE'S RESPONSIBILITIES.

         A.       OPERATIONAL AND OTHER  REQUIREMENTS.  During the License Term,
                  Licensee will:

                  (1)    promptly  pay to Licensor  all amounts due Licensor and
                         its  Entities  as  royalties  or fees or for  goods  or
                         services purchased by Licensee;

                  (2)    maintain the Hotel in a clean,  safe and orderly manner
                         and in first class condition;

                  (3)    provide efficient,  courteous and high-quality  service
                         to the public;

                  (4)    operate  the Hotel 24 hours a day every day,  except as
                         otherwise   permitted  by  Licensor  based  on  special
                         circumstances;

                  (5)    strictly  comply in all  respects  with the  Manual and
                         with all other policies, procedures and requirements of
                         Licensor which may be from time to time communicated to
                         Licensee;

                  (6)    strictly comply with Licensor's reasonable requirements
                         to protect  the  System  and the Hotel from  unreliable
                         sources of supply;

                  (7)    strictly comply with Licensor's requirements as to:

                         (a)  the types of  services  and  products  that either
                              must or may be used, promoted or  offered  at  the
                              Hotel;

                         (b)  use, display, style and type of signage;

                         (c)  directory and reservation  service listings of the
                              Hotel;

                         (d)  training   of  persons  to  be   involved  in  the
                              operation of the Hotel;

                         (e)  participation   in  all   marketing,   reservation
                              service,   advertising,   training  and  operating
                              programs designated by Licensor as System-wide (or
                              area-wide) programs based on Licensor's assessment
                              of the  long-term  best  interests of hotels using
                              the System, considering the interest of the System
                              overall;

                         (f)  maintenance,   appearance  and  condition  of  the
                              Hotel;

                         (g)  quality and types of services offered to customers
                              at the Hotel, and

                         (h)  its 100% Satisfaction Guarantee rule of operation,
                              and any  similar  rules of  operation  designed to
                              maintain  or  improve   relationships  with  past,
                              present  and  potential  guests  and  other  hotel
                              customers,  as such rule or rules are in effect or
                              as they may be established or revised hereafter;

                  (8)    use  such   automated   guest   service   and/or  hotel
                         management  and/or  telephone  system(s) which Licensor
                         deems to be in the best  interests  of the System based
                         on  Licensor's   assessment   of  the  long-term   best
                         interests of hotels using the System,  considering  the
                         interests  of  the  System   overall,   including   any
                         additions,   enhancements,   supplements   or  variants
                         thereof which may be developed during the term hereof;

                  (9)    participate in and use those reservation services which
                         Licensor  deems  to be in  the  best  interests  of the
                         System based on Licensor's  assessment of the long-term
                         best interests of hotels using the
<PAGE>

                         System,   considering   the  interests  of  the  System
                         overall,   including   any   additions,   enhancements,
                         supplements or variants  thereof which may be developed
                         during the term hereof;

                  (10)   adopt  improvements  or changes to the System as may be
                         from time to time designated by Licensor;

                  (11)   strictly  comply  with all  governmental  requirements,
                         including  the filing and  maintenance  of any required
                         trade name or fictitious name registrations, paying all
                         taxes,  and maintaining all  governmental  licenses and
                         permits  necessary  to operate the Hotel in  accordance
                         with the System;

                  (12)   permit   inspection   of  the   Hotel   by   Licensor's
                         representatives  at any time and give them free lodging
                         for  such  time  as  may  be  reasonably  necessary  to
                         complete their inspections;

                  (13)   upon   request  by   Licensor,   provide  to   Licensor
                         statistics on Hotel operations in the form specified by
                         Licensor and using definitions specified by Licensor;

                  (14)   promote the Hotel on a local or regional  basis subject
                         to  Licensor's  requirements  as to form,  content  and
                         prior approvals;

                  (15)   ensure  that no part of the  Hotel or System is used to
                         further  or promote  another  lodging  facility  or any
                         business that competes with any business Licensor or an
                         affiliate  engages in at any time during the  Agreement
                         (including, but not limited to, the timeshare resort or
                         vacation ownership business), except for those approved
                         by Licensor, its parent, subsidiaries or affiliates;

                  (16)   use every reasonable means to encourage use of Homewood
                         Suites facilities  everywhere by the public;  provided,
                         however, this will not prohibit Licensor from requiring
                         Licensee's  participation in programs designed to refer
                         prospective customers to other hotels (in the System or
                         otherwise);

                  (17)   in all respects use Licensee's  best efforts to reflect
                         credit upon and create favorable public response to the
                         name "Homewood Suites";

                  (18)   comply   with   Licensor's    requirements   concerning
                         confidentiality of information;

                  (19)   not at any  time  during  the  term of this  Agreement,
                         through itself or any member of an affiliated group (as
                         defined by the Internal  Revenue Code) own, in whole or
                         in  part,  or  be  the  licensor  of,  a  hotel  brand,
                         tradename,  system or chain without the written consent
                         of  Licensor  in its sole  discretion.  Hereafter,  any
                         entity that,  through itself or any affiliate,  owns in
                         whole or in part,  or is the licensor of a hotel brand,
                         tradename,  system or chain  shall be  referred to as a
                         COMPETITOR"; and

                  (20)   maintain  possession and control of the Hotel and Hotel
                         site.

         B.       UPGRADING  OF THE HOTEL.  Licensor  may at any time during the
                  License Term require substantial modernization, rehabilitation
                  and  other  upgrading  of the  Hotel to meet the then  current
                  standards  specified in the Manual as long as those  standards
                  apply to a majority of the hotels operated by Licensor and its
                  licensees in the same brand or category as the Hotel.  Nothing
                  in this paragraph shall be construed to relieve  Licensee from
                  the obligation to maintain  acceptable product quality ratings
                  at the Hotel and  maintain  the Hotel in  accordance  with the
                  Manual at all times during the Agreement.  Limited  exceptions
                  from those  standards  may be made by Licensor  based on local
                  conditions   or  special   circumstances.   If  the  upgrading
                  requirements  contained in this  Paragraph  6b cause  Licensee
                  undue  hardship,  Licensee  may  terminate  this  Agreement by
                  paying a fee computed according to Paragraph 13f.

         C.       STAFF AND MANAGEMENT. Licensee is at all times responsible for
                  the management of the Hotel's  business.  Licensee may fulfill
                  this  responsibility  by  retaining a third  party  management
                  company  ("MANAGER");  provided,  however,  Licensee shall not
                  enter into any lease,  management  agreement or other  similar
                  arrangement for the operation of the Hotel or any part thereof
                  with any entity without the prior written  consent of Licensor
                  in Licensor's  sole  discretion  (there being no obligation on
                  the part of

<PAGE>

                  Licensor  to  approve  a  third  party  management   company).
                  Licensee understands that Licensor will not normally approve a
                  Competitor  to manage the Hotel,  or any entity that  (through
                  itself  or  an  affiliate)  is  the  exclusive  manager  for a
                  Competitor.  If a  Manager  becomes a  Competitor  at any time
                  during the term of the Agreement,  Licensee shall have 90 days
                  to retain a  substitute  manager  suitable to  Licensor.  As a
                  prerequisite  for  Licensor's  approval  of  a  Manager,   the
                  proposed  management  agreement  must  provide  (1)  that  the
                  Manager has  authority  for the  day-to-day  management of the
                  Hotel;  (2) that the Manager has the  authority to perform the
                  obligations of the Licensee under this Agreement; and (3) that
                  in the case of any  conflict  between this  Agreement  and the
                  management agreement, this Agreement prevails.

7.       FEES.

         A.       Commencing  on the  opening  date of the  Hotel as a  Homewood
                  Suites  hotel  and  continuing  for  the  full  term  of  this
                  Agreement,  for each month (or part of a month), Licensee will
                  pay to Licensor by the 15th of the following month:

                  (1)    a royalty fee equal to 4 percent of the gross  revenues
                         attributable  to or payable for rental of Guest  Suites
                         at the Hotel with  deductions  for sales and room taxes
                         only ("GROSS SUITES REVENUE"); and

                  (2)    a  "MARKETING/RESERVATION   CONTRIBUTION"  equal  to  4
                         percent     of    Gross     Suites     Revenue.     The
                         Marketing/Reservation Contribution is subject to change
                         by    Licensor    from    time    to    time,     which
                         Marketing/Reservation  Contributions do not include the
                         cost,   installation   or  maintenance  of  reservation
                         services equipment or training; and

                  (3)    all amounts due  Licensor  for any other  miscellaneous
                         fees or invoices or for goods or services  purchased by
                         or   provided  to  Licensee  or  paid  by  Licensor  on
                         Licensee's behalf; and

                  (4)    an amount equal to any sales, gross receipts or similar
                         tax imposed on Licensor for the receipt of the payments
                         required in (1), (2) and (3) of this  Paragraph  above,
                         unless the tax is an optional  alternative to an income
                         tax otherwise payable by Licensor.

         B.       Licensee will operate the Hotel so as to maximize Gross Suites
                  Revenue  consistent with sound marketing and industry practice
                  and will not engage in any  conduct  which is likely to reduce
                  Gross  Suites  Revenue  in order  to  further  other  business
                  activities.

         C.       Royalties may be charged on revenues (or upon any other basis,
                  if so determined by Licensor)  from any activity  conducted at
                  the Hotel if added by  mutual  agreement  and if:  (i) not now
                  offered at hotels within the System generally and is likely to
                  benefit significantly from or be identified significantly with
                  the  Homewood  Suites  name or other  aspects of the System or
                  (ii) designed or developed by or for Licensor.

         D.       Licensor may charge for optional products or services accepted
                  by Licensee  from Licensor  either in accordance  with current
                  practice or as developed in the future.

         E.       A Guest  Suite  addition  fee for guest suite  additions  to a
                  hotel set forth in Licensor's then current "FRANCHISE OFFERING
                  CIRCULAR"  shall be paid by Licensee to Licensor on Licensee's
                  submission  of an  application  to add any Guest Suites to the
                  Hotel.  As a condition  to Licensor  granting  its approval of
                  such application, Licensor may require Licensee to upgrade the
                  Hotel, subject to Paragraph 6b.

         F.       Local and regional  marketing  programs and related activities
                  may be conducted by Licensee,  but only at Licensee's  expense
                  and subject to Licensor's requirements. Reasonable charges may
                  be made by Licensor for optional advertising materials ordered
                  or used by Licensee for such programs and activities.

         G.       Licensee  shall   participate   in  Licensor's   travel  agent
                  commission  program(s) as it may be modified from time to time
                  and shall  reimburse  Licensor  on or before  the 15th of each
                  month for call costs associated with such programs  including,
                  but not limited to, travel agent  commissions  and third party
                  reservation  service  charges  (such  as  airline  reservation
                  systems).

<PAGE>

         H.       Each payment paid by Licensor  under this Paragraph 7 shall be
                  accompanied by the monthly statement  referred to in Paragraph
                  8.  Licensor  may  apply  any  amounts   received  under  this
                  Paragraph 7 to any amounts  due under this  Agreement.  If any
                  amounts  are  not  paid  when  due,  such  non-payment   shall
                  constitute a breach of this Agreement  and, in addition,  such
                  unpaid amounts will accrue a service  charge  beginning on the
                  first day of the month following the due date of 1 1/2 percent
                  per month but not to exceed the maximum  amount  permitted  by
                  applicable law.

8.       RECORDS AND AUDITS.

         A.       DAILY  AND  MONTHLY  REPORTS.  At  the  request  of  Licensor,
                  Licensee  shall prepare and deliver daily reports to Licensor,
                  which reports will contain information reasonably requested by
                  Licensor  on a  daily  basis,  such as  daily  rate  and  room
                  occupancy,   and  which  may  be  used  by  Licensor  for  its
                  reasonable purposes. At least monthly,  Licensee shall prepare
                  a  statement  which will  include all  information  concerning
                  Gross Suites Revenue,  other revenues  generated at the Hotel,
                  suite occupancy rates,  reservation data and other information
                  required  by  Licensor   (the   "DATA").   The  Data  will  be
                  permanently   recorded  and  retained  as  may  be  reasonably
                  required by Licensor. By the 15th of each month, Licensee will
                  submit to Licensor a statement  setting forth the Data for the
                  previous month and  reflecting the  computation of the amounts
                  then due under Paragraph 7. The statement will be in such form
                  and detail as Licensor  may  reasonably  request  from time to
                  time, and may be used by Licensor for its reasonable purposes.

         B.       MAINTENANCE OF RECORDS.  Licensee  shall, in a manner and form
                  satisfactory   to  Licensor  and  utilizing   accounting   and
                  reporting   standards  as  reasonably  required  by  Licensor,
                  prepare on a current basis (and preserve for no less than four
                  years),  complete and accurate records concerning Gross Suites
                  Revenue  and all  financial,  operating,  marketing  and other
                  aspects of the Hotel, and maintain an accounting  system which
                  fully and  accurately  reflects all  financial  aspects of the
                  Hotel and its  business.  Such records  shall include books of
                  account, tax returns,  governmental  reports,  register tapes,
                  daily  reports,  and complete  quarterly and annual  financial
                  statements  (profit and loss  statements,  balance  sheets and
                  cash flow statements).

         C.       AUDIT.  Licensor may require Licensee to have the Gross Suites
                  Revenue or other monies due  hereunder  computed and certified
                  as  accurate  by a  certified  public  accountant.  During the
                  License  Term and for two years  thereafter,  Licensor and its
                  authorized  agents shall have the right to verify  information
                  required  under  this  Agreement  by  requesting,   receiving,
                  inspecting and auditing,  at all reasonable times, any and all
                  records  referred  to above  wherever  they may be located (or
                  elsewhere if reasonably  requested by  Licensor).  If any such
                  inspection or audit discloses a deficiency in any payments due
                  hereunder,  Licensee shall immediately pay to Licensor (i) the
                  deficiency,  (ii) a service  charge  thereon  as  provided  in
                  Paragraph  7h,  and  (iii)  all  inspection  and  audit  costs
                  (including travel, lodging, meals, salaries and other expenses
                  of  the   inspecting   or  auditing   personnel).   Licensor's
                  acceptance of Licensee's payment of any deficiency as provided
                  for herein shall not waive  Licensor's right to terminate this
                  Agreement as provided for herein in Paragraph 13. If the audit
                  discloses   an   overpayment,   Licensor   shall   refund  the
                  overpayment to Licensee within 30 days.

         D.       ANNUAL FINANCIAL STATEMENTS.  Licensee will submit to Licensor
                  complete year-end financial statements for the Hotel, Licensee
                  and/or any  guarantors as soon as available but not later than
                  90 days after the end of Licensee's fiscal year. Licensee will
                  certify them to be true and correct and to have been  prepared
                  in accordance with generally  accepted  accounting  principles
                  consistently  applied,  and any false  certification will be a
                  breach of this Agreement.

         E.       All of the information  provided to Licensor  pursuant to this
                  paragraph or any other part of this Agreement,  or pursuant to
                  any   agreement   ancillary  to  this   Agreement   (including
                  agreements  relating to the System 21 business system or other
                  property   management   system   provided  by  Licensor)  (the
                  "INFORMATION"),  shall be the property of  Licensor.  HOWEVER,
                  NOTWITHSTANDING  ANYTHING TO THE  CONTRARY IN THIS  AGREEMENT,
                  INFORMATION,  SUCH AS FINANCIAL  STATEMENTS,  PREPARED FOR THE
                  HOTEL, LICENSEE AND/OR GUARANTORS,  WHICH ANY SUCH PARTIES ARE
                  REQUIRED BY LAW OR BY THEIR NORMAL  BUSINESS  PRACTICES TO USE
                  FOR OTHER PURPOSES (SUCH AS IN FILINGS WITH THE SECURITIES AND
                  EXCHANGE  COMMISSION OR OTHER GOVERNMENTAL  AUTHORITIES OR FOR
                  TRANSMISSION  TO  SHAREHOLDERS)  MAY BE USED BY THEM  FOR SUCH
                  PURPOSES,  AND SUCH  PARTIES  SHALL  RETAIN  OWNERSHIP IN SUCH
                  INFORMATION  TO THE  EXTENT  NECESSARY  TO

<PAGE>

                  PERMIT SUCH USE.  NEVERTHELESS,  LICENSOR SHALL OWN THE COPIES
                  OF ANY  SUCH  INFORMATION  PROVIDED  BY ANY  SUCH  PARTIES  IN
                  ACCORDANCE WITH THE TERMS OF THIS AGREEMENT. Licensor will use
                  reasonable efforts to sort, categorize, classify and otherwise
                  analyze the information to help licensees market their hotels.
                  The  Information  will remain the  proprietary  information of
                  Licensor  which  Licensor  will share with  licensees  only as
                  determined  by Licensor in its sole  discretion.  Licensor and
                  its  affiliates  may  use  the   Information  for  any  reason
                  whatsoever, including an earnings claim in Licensor's offering
                  circular.

9.       INDEMNITY.

         SUBJECT TO THE PROVISIONS OF ANY MANAGEMENT  AGREEMENT BETWEEN LICENSOR
         (AS MANAGER  THEREUNDER) AND LICENSEE (AS OWNER  THEREUNDER),  Licensee
         will indemnify,  during and after the term of this Agreement,  Licensor
         and  its  affiliates,   and  their  respective   officers,   directors,
         employees, agents,  predecessors,  successors and assigns ("INDEMNIFIED
         PARTIES") against, hold them harmless from, and promptly reimburse them
         for, all payments of money (fines, damages, legal fees, expenses, etc.)
         by  reason  of  any  claim,   demand,  tax,  penalty,  or  judicial  or
         administrative  investigation  or proceeding  (even where negligence of
         Licensor and/or its Entities and/or their Indemnified Parties is actual
         or alleged) arising from any claimed occurrence at the Hotel or arising
         from,  as a  result  of,  or in  connection  with  the  development  or
         operation  of the Hotel  (including,  but not  limited  to, the design,
         construction, financing, furnishing, equipment, acquisition of supplies
         or operation of the Hotel in any way), or any other of Licensee's acts,
         omissions or  obligations  or those of anyone  associated or affiliated
         with Licensee or the Hotel in any way arising out of or related to this
         Agreement.  At the  election  of  Licensor,  Licensee  will also defend
         Licensor and/or its Entities and/or their  Indemnified  Parties against
         the same. In any event,  Licensor will have the right,  through counsel
         of its choice, to control any matter to the extent it could directly or
         indirectly affect Licensor and/or its Entities and/or their Indemnified
         Parties  financially.  Licensee  will also  reimburse  Licensor for all
         expenses,   including  attorneys'  fees  and  court  costs,  reasonably
         incurred by Licensor to protect itself and/or its Entities and/or their
         Indemnified  Parties  from,  or to  remedy  Licensee's  defaults  or to
         collect any amounts due under this Agreement.

10.      INSURANCE.

         A.       Licensee  will  comply  with  Licensor's   specifications  for
                  insurance  as to  amount  and  type  of  coverage  as  may  be
                  reasonably  specified by Licensor from time to time in writing
                  and will in any  event  maintain  as a minimum  the  following
                  insurance underwritten by an insurer approved by Licensor:

                  (1)    employer's   liability   and   workers'    compensation
                         insurance as prescribed by applicable law; and

                  (2)    liquor  liability  insurance,  if  applicable,   naming
                         Licensor  and  its  then  current  Entities  and  their
                         predecessors,  successors  and  assigns  as  additional
                         insureds  with  single-limit  coverage for personal and
                         bodily   injury  and   property   damage  of  at  least
                         $10,000,000 for each occurrence; and

                  (3)    commercial general liability  insurance (with products,
                         completed   operations  and   independent   contractors
                         coverage)  and   comprehensive   automobile   liability
                         insurance,  all on an occurrence and per location basis
                         naming Licensor,  its Entities and their  predecessors,
                         successors  and  assigns  as  additional  insureds  and
                         underwritten by an insurer  approved by Licensor,  with
                         single-limit  coverage for  personal and bodily  injury
                         and property  damage of at least  $10,000,000  for each
                         occurrence; and

                  (4)    in connection with all construction at the Hotel during
                         the  License  Term,  Licensee  will  cause the  general
                         contractor  to  maintain  with an insurer  approved  by
                         Licensor  commercial general liability  insurance (with
                         products,   completed   operations,   and   independent
                         contractors  coverage including  workers'  compensation
                         and automobile liability insurance for such independent
                         contractors)  in at least the amount of $10,000,000 for
                         each  occurrence  for  personal  and bodily  injury and
                         property  damage with Licensor,  its Entities and their
                         predecessors,  successors  and  assigns  as  additional
                         insureds.

         B.       EVIDENCE  OF   INSURANCE/CHANGES.   This  coverage   shall  be
                  evidenced by original  certificates of insurance  submitted to
                  Licensor simultaneously herewith,  annually hereafter and each
                  time a change is made in any  insurance or insurance  carrier,
                  Licensee  will furnish to Licensor  certificates  of insurance
                  including the term and coverage of the insurance in force, the
                  persons insured,  and a statement that the

<PAGE>

                  coverage may not be  cancelled,  altered or permitted to lapse
                  or expire without 30 days advance  written notice to Licensor.
                  Licensor will send  Licensee  notice of any policy or coverage
                  which Licensor, in its sole discretion, finds unacceptable and
                  upon receipt of such notice,  Licensee will promptly undertake
                  to change such policy or coverage.

         C.       If  Licensee  fails or  neglects  to  obtain or  maintain  the
                  insurance  or  policy  limits   required  by  this  Agreement,
                  Licensor shall have the option,  without notice, to obtain and
                  maintain such insurance for Licensee, and  Licensee  shall pay
                  immediately  upon  demand therefore, the premiums and the cost
                  incurred by Licensor in taking such action.

11.      TRANSFER.

         A.       TRANSFER OF THIS  AGREEMENT BY LICENSOR.  Licensor  shall have
                  the right to  transfer  or  assign  this  Agreement  or any of
                  Licensor's rights, obligations, or assets under this Agreement
                  to any person or legal  entity  provided  that the  transferee
                  assumes all of Licensor's  obligations  to Licensee under this
                  Agreement.

         B.       TRANSFERS BY LICENSEE.

                  (1)    General  Statement  of  Explanation  and  Intent.  This
                         Agreement is not transferable by Licensee, and a change
                         in  ownership  of the  Hotel or the  licensed  business
                         (i.e.,  either  this  Agreement,  the  Licensee  or any
                         indirect  ownership  interest in the  Licensee)  is not
                         allowed  under  this  Agreement.  Certain  intra-family
                         transfers  of  interest  and (in the case of  corporate
                         licensees)  corporate  restructurings  are permitted as
                         long  as the  requirements  described  below  are  met.
                         However,  Licensor has entered into this Agreement with
                         a  particular  Licensee or its owners.  If the Licensee
                         wants to  transfer  the  Hotel or its  interest  in the
                         licensed  business,  such a transfer will  constitute a
                         "change  of  ownership".  If the  transferee  wants  to
                         continue  to  operate  the Hotel as a  Homewood  Suites
                         hotel,  the  transferee  will  have to apply  for a new
                         license which,  if approved,  will last at most for the
                         balance of the term of this Agreement. If the change of
                         ownership is not approved,  or if the  transferee  does
                         not want to continue to operate the Hotel as a Homewood
                         Suites  hotel,  Licensor  may  refuse to consent to the
                         termination of this Agreement. If Licensor does consent
                         to  termination,  this  Agreement  will  terminate  and
                         Licensee will owe liquidated damages.  In addition,  if
                         the transfer is to a Competitor, Licensor has the right
                         to buy the Hotel.  The  foregoing  explanation  is more
                         fully described and qualified by the following specific
                         provisions.

                  (2)    Licensee  understands and acknowledges  that the rights
                         and duties set forth in this  Agreement are personal to
                         Licensee,  and that  Licensor  has  entered  into  this
                         Agreement in reliance on the business skill,  financial
                         capacity,   and  personal  character  of  Licensee  (if
                         Licensee is an  individual),  and that of the partners,
                         members,  or stockholders of Licensee (if Licensee is a
                         partnership,   company,  corporation,  or  other  legal
                         entity). Accordingly, no direct or indirect interest in
                         the  Hotel  or in  this  Agreement,  and no  direct  or
                         indirect   Equity   Interest  (as  defined  herein)  in
                         Licensee may be sold, leased, assigned, or transferred,
                         (such instances hereafter referred to collectively as a
                         "TRANSFER"),  without  the  consent  of  the  Licensor.
                         Nothing  herein shall require  Licensor's  approval for
                         any pledge,  mortgage,  or  hypothecation of all or any
                         part of the assets of the licensed business (other than
                         this  Agreement or any Equity  Interest in Licensee) to
                         banks or other lending institutions.

                  (3)    Any  purported   Transfer,   by  operation  of  law  or
                         otherwise,  not in  accordance  with the  provisions of
                         this  Agreement  shall  be  null  and  void  and  shall
                         constitute  a  breach  of  this  Agreement,  for  which
                         Licensor  may  terminate  this  Agreement  upon  notice
                         without  opportunity to cure pursuant to Paragraph 13d,
                         and as a result of which  Licensee will owe  liquidated
                         damages.

                  (4)    References  in this  Agreement  to  "EQUITY  INTERESTS"
                         shall mean any direct or indirect  beneficial  interest
                         in Licensee (an  "INDIRECT"  interest is an interest in
                         an entity other than the Licensee  that either  itself,
                         or through others, has an interest in the Licensee). In
                         addition,  "PUBLICLY-TRADED EQUITY INTEREST" shall mean
                         any Equity  Interest  which is traded on any securities
                         exchange or is

<PAGE>

                         quoted  in  any  publication  or  electronic  reporting
                         service  maintained  by  the  National  Association  of
                         Securities Dealers,  Inc. or any of its successors.  In
                         computing changes of Equity Interests, limited partners
                         will  not  be  distinguished   from  general  partners.
                         Licensor's  judgment  will be  final  if  there  is any
                         question as to the definition of Equity  Interest or as
                         to the  computation of relative Equity  Interests,  the
                         principal considerations being: direct and indirect (i)
                         power to exercise control over the affairs of Licensee;
                         (ii) right to share in  Licensee's  profits;  and (iii)
                         exposure to risk in the Licensee's business.

                  (5)    Licensee  represents  that  the  Equity  Interests  are
                         directly and (if applicable)  indirectly owned as shown
                         on the Rider.

         C.       PROCEDURES FOR TRANSFERS. Licensee must provide written notice
                  to Licensor in advance of any  proposed  Transfer  stating the
                  identity of the prospective  transferee,  purchaser, or lessee
                  and the terms and conditions of the conveyance. As a condition
                  to consenting to the transfer, Licensor may require any one or
                  more of the following to be met:

                  (1)    Licensee  will  upon  request  provide  a  copy  of any
                         proposed   agreement   of   transfer   and  all   other
                         information  with respect  thereto  which  Licensor may
                         reasonably require;

                  (2)    Licensee will upon request  provide  documents  showing
                         ownership  structure of the  Licensee,  site control by
                         the Licensee,  possession or management  control by the
                         Licensee, financial statements of any participants, and
                         any other documents reasonably requested by Licensor;

                  (3)    Licensee  will upon  request  pay a  processing  fee to
                         Licensor of up to $5,000 to cover  Licensor's  costs to
                         review and consent to the Transfer;  provided  however,
                         in the case of a  transfer  of Equity  Interests  which
                         require   registration   under  any  federal  or  state
                         securities law, Licensee will pay a processing fee that
                         will not exceed $25,000;

                  (4)    Licensee and all  participants  in any proposed  public
                         offering   (including   the  sale  of   partnership  or
                         membership  interests)  (i)  agree to  fully  indemnify
                         Licensor  in  connection  with the  registration,  (ii)
                         furnish  Licensor with all information  requested,  and
                         (iii)  avoid   using   Licensor's   service   marks  or
                         trademarks    or    otherwise    implying    Licensor's
                         participation in or endorsing of any public offering;

                  (5)    Licensee will at all times  adequately  provide for the
                         management of the Hotel during any Transfer; or

                  (6)    Licensor may require the transferee to promptly execute
                         a new license  agreement  on  Licensor's  then  current
                         license  agreement  for  the  unexpired  term  of  this
                         Agreement,  and Licensor  may require the  guarantee of
                         the new license  agreement  by the same  guarantors  of
                         this  Agreement (or substitute  guarantors  approved by
                         Licensor in its sole discretion).

         D.       PERMITTED TRANSFERS.  Licensor will not unreasonably  withhold
                  consent to any of the following  Transfers  provided  Licensee
                  complies  with  all the  requirements  specified  by  Licensor
                  pursuant to Subparagraph c above (it being  understood that if
                  Licensee  is in  default of any of its  obligations  under the
                  Agreement,  it will not be unreasonable for Licensor to refuse
                  to consent to any of these Transfers):

                  (1)    EQUITY INTERESTS WHICH ARE NOT  PUBLICLY-TRADED  MAY BE
                         TRANSFERRED, IF AFTER THE TRANSACTION,  GLADE M. KNIGHT
                         OWNS, DIRECTLY OR INDIRECTLY,  A BENEFICIAL INTEREST IN
                         THE  GENERAL  PARTNER  OF  LICENSEE  AND  CONTROLS  THE
                         MANAGEMENT AND POLICIES OF SUCH GENERAL PARTNER AND NOT
                         LESS  THAN  50%  OF ALL  EQUITY  INTERESTS  ARE  OWNED,
                         DIRECTLY OR INDIRECTLY,  BY GLADE M. KNIGHT AND, IN THE
                         CASE OF ANY SUCH PERMITTED  TRANSFER,  THE REQUIREMENTS
                         OF CLAUSES  (3) AND (6) OF  SUBPARAGRAPH  C. ABOVE NEED
                         NOT BE COMPLIED WITH BY LICENSEE.

                  (2)    Publicly-traded  equity  interests  may be  transferred
                         (without  Licensor's consent and without  notification)
                         if such  transfer  is exempt  from  registration  under
                         federal  securities law and if  immediately  before and
                         after  the  transfer,  the  transferor  and  transferee
                         respectively  each  own  less  than 25  percent  of the
                         Equity Interests in Licensee.

<PAGE>

                  (3)    Licensee,   if  a  natural  person,  may  transfer  its
                         interest  in the  License  or  Equity  Interest  in the
                         Licensee to one or more of Licensee's spouse,  parents,
                         siblings, nephews,  descendants or spouses' descendants
                         or  to  a  corporation   entirely   owned  by  Licensee
                         ("PERMITTED TRANSFEREES").

                  (4)    If Licensee is a natural  person,  upon the  Licensee's
                         death, the License or Licensee's Equity Interest in the
                         Licensee will pass in accordance with Licensee's  will,
                         or, if Licensee dies intestate, in accordance with laws
                         of  intestacy   governing  the   distribution   of  the
                         Licensee's  estate,  as the case may be,  provided  the
                         transferee  is  one or more of the decedent's Permitted
                         Transferees  (excluding  corporations formerly owned by
                         the  Licensee)  and within one year after the death the
                         Permitted   Transferees  meet  all  Licensor's   normal
                         requirements of an approved applicant.

                  (5)    Licensee  may sell or lease the Hotel,  the Hotel site,
                         or any portion  thereof if, in the reasonable  judgment
                         of Licensor, after such transfer,  Licensee will retain
                         possession and control of the Hotel site and management
                         control of the Hotel operations (which may be via third
                         party  management  contract  pursuant to Paragraph 6c).
                         If,  in  the  reasonable  judgment  of  Licensor,   the
                         transfer  of the  Hotel  will  result  in the  loss  of
                         possession  or  control  of the Hotel or Hotel  site or
                         management of the Hotel, the transfer will constitute a
                         change of ownership as described in Subparagraph e.

         E.       CHANGE OF OWNERSHIP.

                  (1)    Any  Transfer  that  does not  qualify  as a  permitted
                         transfer under  Subparagraph d above shall constitute a
                         change  of  ownership.  If in the case of a  change  of
                         ownership,   the  transferee  desires  to  continue  to
                         operate  the  Hotel as a  Homewood  Suites  hotel,  the
                         transferee must submit an application for a new license
                         agreement.  The new license,  if  approved,  will be at
                         most  for the  unexpired  term of this  Agreement.  The
                         transferee shall be responsible for all normal fees and
                         costs   (including   application   fees  and  costs  of
                         improvements to the Hotel).

                  (2)    Licensor   shall   process  such  change  of  ownership
                         application  in  good  faith  and  in  accordance  with
                         Licensor's  then  current   procedures,   criteria  and
                         requirements  regarding upgrading of the Hotel, credit,
                         operational abilities and capabilities,  prior business
                         dealings,  market  feasibility,  guarantees,  and other
                         factors deemed relevant by Licensor.  If such change of
                         ownership application is approved, Licensor and the new
                         owner shall,  upon surrender of this  Agreement,  enter
                         into a new license agreement. The new license agreement
                         shall be on  Licensor's  then  current form and contain
                         Licensor's  then current terms  (except for  duration),
                         and if  applicable,  the  new  license  agreement  will
                         contain specified upgrading and other requirements.  If
                         the  application  is  approved,   Licensee   submits  a
                         voluntary  termination  of this  Agreement  and signs a
                         release (in a form  satisfactory  to  Licensor)  of all
                         claims  against  Licensor,  and the  proposed new owner
                         executes  a new  license  within 30 days of the sale of
                         the Hotel, no liquidated damages described in Paragraph
                         13 will be owed by Licensee for the termination of this
                         Agreement.

                  (3)    If a change of ownership  application  for the proposed
                         transferee   is  not   approved   by  Licensor  or  the
                         transferee  does not want to  continue  to operate  the
                         Hotel as a Homewood  Suites hotel,  Licensor may refuse
                         consent to the  transfer and reserve all  remedies;  if
                         Licensor  does  consent and the Transfer  occurs,  then
                         this Agreement  shall  terminate  pursuant to Paragraph
                         13d hereof and Licensor shall be entitled to all of its
                         remedies including liquidated damages.

         F.       TRANSFER TO COMPETITOR.  Notwithstanding any of the foregoing,
                  if the  Licensee  receives a bona fide offer from a Competitor
                  to purchase or lease the Hotel or to purchase  Licensee or any
                  entity that controls  Licensee,  or to purchase an interest in
                  either,  and  Licensee  or any  person or entity  that owns or
                  controls Licensee wishes to accept such offer,  Licensee shall
                  give written notice thereof to Licensor,  stating the name and
                  full identity of the prospective  purchaser or tenant,  as the
                  case may be,  including  the names and addresses of the owners
                  of  the  capital   stock,   partnership   interests  or  other
                  proprietary interests of such prospective purchaser or tenant,
                  the price or  rental  and all  terms  and  conditions  of such
                  proposed transaction, together with all other information with
                  respect  thereto which is requested by Licensor and reasonably
                  available  to  Licensee.  Within  60  days  after  receipt  by
                  Licensor of such written notice from Licensee,  Licensor shall
                  elect by written  notice to Licensee one of the following four
                  alternatives:

                  (1)    If the proposed  transaction  is a sale or lease of the
                         Hotel,  Licensor (or its designee) shall have

<PAGE>

                         the right to purchase or lease the Hotel  premises  and
                         related  property  at the same price or rental and upon
                         the same  terms  and  conditions  as those set forth in
                         such bona fide offer from a  Competitor.  In such event
                         Licensee and Licensor (or its designee)  shall promptly
                         enter into an agreement  for sale or lease at the price
                         or rental and on terms  consistent  with such bona fide
                         offer.

                  (2)    If the proposed  transaction  is a purchase of all or a
                         portion  of the stock or  assets  (which  includes  the
                         Hotel) of  Licensee or the person that owns or controls
                         Licensee,  Licensor  (or its  designee)  shall have the
                         right  to  purchase  the  Hotel  premises  and  related
                         property.  If the  parties  are unable to agree as to a
                         purchase   price  and  terms  within   thirty  days  of
                         Licensor's election, the fair market value of the Hotel
                         premises and related  property  shall be  determined by
                         arbitration  as  follows:  Either  party may by written
                         notice to the other appoint an  arbitrator.  Thereupon,
                         within 15 days  after the  giving of such  notice,  the
                         other  shall by written  notice to the  former  appoint
                         another  arbitrator,  and in  default  of  such  second
                         appointment the arbitrator first appointed shall be the
                         sole  arbitrator.  When any two  arbitrators  have been
                         appointed as aforesaid,  they shall, if possible, agree
                         upon a third arbitrator and shall appoint him by notice
                         in writing,  signed by both of them in triplicate,  one
                         of  which  triplicate  notices  shall  be given to each
                         party  hereto;  but if 15 days shall lapse  without the
                         appointment of the third arbitrator as aforesaid,  then
                         such  third   arbitrator  shall  be  appointed  by  the
                         American  Arbitration  Association  from its  qualified
                         panel of  arbitrators,  and shall be a person having at
                         least ten (10) years' recent professional experience as
                         to the subject matter in question.  Upon appointment of
                         the  third  arbitrator   (whichever  way  appointed  as
                         aforesaid), the three arbitrators shall meet and render
                         their  decision.  The  decision  of a  majority  of the
                         arbitrators so chosen shall be conclusive. Licensor (or
                         its designee)  shall have the right, at any time within
                         30 days of being notified in writing of the decision of
                         the  arbitrators  as  aforesaid,  to purchase the Hotel
                         premises and related property at the valuation fixed by
                         the  arbitrators.  The parties  shall share equally the
                         expense of such arbitration.

                  (3)    To terminate  this  Agreement,  in which event Licensee
                         shall  be  obligated  to  pay  to  Licensor  liquidated
                         damages pursuant to a Special  Termination as set forth
                         in Paragraph 13f.

                  (4)    To refuse to consent  to the  Transfer,  reserving  all
                         remedies under the applicable law.

         G.       FINANCING.  The construction and/or operation of the Hotel may
                  not be  financed by a public  offering of any right,  title or
                  interest in the Hotel,  the property upon which it is built or
                  the receipts from its  operation  without the prior review and
                  approval of the applicable documentation by Licensor. Licensee
                  shall   submit  a   non-refundable   $25,000   fee  with  said
                  documentation.

12.      CONDEMNATION AND CASUALTY.

         A.       CONDEMNATION.  Licensee shall, at the earliest  possible time,
                  give Licensor notice of any proposed taking by eminent domain.
                  If  Licensor  agrees  that  the  Hotel or a  substantial  part
                  thereof is to be taken,  Licensor may, in its sole  discretion
                  and  within  a  reasonable  time of the  taking  (within  four
                  months) transfer this Agreement to a nearby location  selected
                  by  Licensee.  If  Licensor  approves  the  new  location  and
                  authorizes  the transfer and if within one year of the closing
                  of the Hotel Licensee opens a new hotel at the new location in
                  accordance with Licensor's specifications,  then the new hotel
                  will be deemed to be the Hotel licensed under this  Agreement.
                  If a  condemnation  takes place and a new hotel does not,  for
                  whatever  reason,  become the Hotel  under this  Agreement  in
                  strict  accordance with this paragraph (or if it is reasonably
                  evident  to  Licensor  that  such  will  be  the  case),  this
                  Agreement  will terminate  immediately  upon notice thereof by
                  Licensor  to  Licensee,  without  the  payment  of  liquidated
                  damages as calculated in Paragraph 13f.

         B.       CASUALTY.  If the Hotel is damaged by fire or other  casualty,
                  Licensee will  expeditiously  repair the damage. If the damage
                  or  repair   requires   closing  the  Hotel,   Licensee   will
                  immediately notify Licensor,  will repair or rebuild the Hotel
                  according   to    Licensor's    standards,    will    commence
                  reconstruction  within four  months  after  closing,  and will
                  reopen the Hotel for continuous business operations as soon as
                  practicable  (but in any  event  within  one  year  after  the
                  closing of the Hotel), giving Licensor ample advance notice of
                  the date of reopening.  If the Hotel is not reopened according
                  to this Paragraph,  this Agreement will terminate immediately,
                  upon notice thereof by Licensor to Licensee,  with the payment
                  of

<PAGE>

                  liquidated  damages as calculated in Paragraph  13f,  provided
                  however,  if Licensee's  insurer  fails to pay the  applicable
                  insurance  policy  proceeds  to  Licensee,  or  if  Licensee's
                  lender,  pursuant to a valid agreement with Licensee,  refuses
                  to allow  the  insurance  proceeds  to be used for  repair  or
                  rebuilding,  the  Agreement  may  be  terminated  by  Licensee
                  without payment of the liquidated damages in Paragraph 13f. In
                  such case  Licensee  shall  notify  Licensor  and  provide any
                  reasonable proof requested by Licensor.

         C.       NO  EXTENSIONS  OF TERM.  Nothing  in this  Paragraph  12 will
                  extend the License Term but Licensee  shall not be required to
                  make any payments  pursuant to Paragraph 7 for periods  during
                  which  the  Hotel is  closed  by  reason  of  condemnation  or
                  casualty.

13.      TERMINATION.

         A.       EXPIRATION OF TERM. Unless terminated earlier,  this Agreement
                  will expire without notice 20 YEARS FROM THE EFFECTIVE DATE OF
                  THIS AGREEMENT, AS DEFINED ON ATTACHMENT B HEREIN.

         B.       PERMITTED  TERMINATION  PRIOR TO EXPIRATION OF TERM.  Licensee
                  may  terminate  this  Agreement  on  the  tenth  or  fifteenth
                  anniversary  date of the  opening  of the  Hotel by  giving at
                  least  12 but  not  more  than 15  months  advance  notice  to
                  Licensor  accompanied  by the payment as provided in Paragraph
                  13f herein.

         C.       TERMINATION OR SUSPENSION BY LICENSOR ON ADVANCE NOTICE.  This
                  Agreement may be  terminated if Licensee  fails to satisfy any
                  obligations  under this  Agreement or any  attachment  hereto.
                  Except in the case of an immediate  termination as provided in
                  subparagraph  13d below,  this  Agreement  shall  terminate if
                  Licensee  fails to cure an Event of Default after the Licensor
                  furnishes adequate notice of termination based on the Event of
                  Default.

                  (1)    An "EVENT OF DEFAULT" shall occur if the Licensee fails
                         to  satisfy  or  comply  with any of the  requirements,
                         conditions, or terms set forth in (i) this Agreement or
                         any  attachment  including,  but not  limited  to,  any
                         provisions regarding: any transfer of the Hotel, or any
                         direct  or  indirect   interest  in  the  Agreement  or
                         Licensee,  any  representation  or  warranty,  any  fee
                         obligation, any operational requirements (including the
                         standards in the Manual); trademarks usage; maintenance
                         of records,  insurance and indemnity; or (ii) any other
                         agreement   between  Licensor  (or  an  affiliate)  and
                         Licensee  relating  to the  Hotel,  including,  but not
                         limited to, any property  management  system agreement,
                         such as the System 21 business system agreement, or any
                         agreement to manage the Hotel.

                  (2)    Notice  of  termination  shall be  adequate,  if mailed
                         thirty  (30) days (or such  longer  period  required by
                         applicable law) in advance of the termination date.

                  (3)    Licensor's  notice of  termination  shall  not  relieve
                         Licensee of its obligations under this Agreement or any
                         attachment.

                  (4)    As a result of  Licensee's  efforts to comply  with the
                         terms and  conditions  contained  on  Attachment  A and
                         elsewhere  in  this  Agreement,   Licensee  will  incur
                         substantial  expense  and expend  substantial  time and
                         effort.  Licensee acknowledges and agrees that Licensor
                         shall have no liability or  obligation  to Licensee for
                         any  losses,   obligations,   liabilities  or  expenses
                         incurred by Licensee if (i)  Licensee  commits an Event
                         of Default as described in Paragraph  13c(1);  (ii) the
                         Hotel is not  authorized by Licensor to Open as defined
                         in  Attachment A or (iii) this  Agreement is terminated
                         because  Licensee has not  complied  with the terms and
                         conditions of this Agreement.

                  (5)    Notwithstanding  the  foregoing,  following an Event of
                         Default,   Licensor  may  at  any  time,  in  its  sole
                         discretion,   suspend   its   obligations   under  this
                         Agreement (including reservation services).

         D.       IMMEDIATE   TERMINATION  BY  LICENSOR.   Notwithstanding   the
                  foregoing   paragraph,   this  Agreement  may  be  immediately
                  terminated  (or  terminated at the earliest time  permitted by
                  applicable  law)  if one or  more  of the  following  material
                  breaches to this Agreement or any Attachment occur:

<PAGE>

                  (1)    Any Event of Default where a prior Event of Default had
                         also occurred  during the preceding 12 months,  but the
                         License was not terminated  because  Licensee cured the
                         prior Event of Default;

                  (2)    Licensee or any  guarantor  of  Licensee's  obligations
                         hereunder shall:

                         (a)  generally  not pay its debts as they become due or
                              shall  admit in writing its  inability  to pay its
                              debts, or shall make a general  assignment for the
                              benefit of creditors; or

                         (b)  commence  any  case,  proceeding  or other  action
                              seeking reorganization,  arrangement,  adjustment,
                              liquidation,  dissolution  or composition of it or
                              its debts under any law  relating  to  bankruptcy,
                              insolvency,  reorganization  or relief of debtors,
                              or seeking  appointment  of a  receiver,  trustee,
                              custodian or other similar  official for it or for
                              all or any substantial part of its property; or

                         (c)  take any  corporate  or other  action to authorize
                              any of the actions  set forth above in  Paragraphs
                              (a) or (b).

                  (3)    Any case,  proceeding or other action against  Licensee
                         or any such  guarantor  shall be  commenced  seeking to
                         have an order for relief entered  against it as debtor,
                         or  seeking  reorganization,  arrangement,  adjustment,
                         liquidation,  dissolution  or  composition of it or its
                         debts under any law relating to bankruptcy, insolvency,
                         reorganization   or  relief  of  debtors,   or  seeking
                         appointment of a receiver,  trustee, custodian or other
                         similar  official for it or for all or any  substantial
                         part of its  property,  and such  case,  proceeding  or
                         other  action (i)  results in the entry of an order for
                         relief  against  it which is not  fully  stayed  within
                         seven  business  days  after the entry  thereof or (ii)
                         remains undismissed for a period of 45 days; or

                  (4)    an attachment  remains on all or a substantial  part of
                         the  Hotel  or of  Licensee's  or any  such  guarantors
                         assets for 30 days; or

                  (5)    Licensee or any such guarantor  fails within 60 days of
                         the entry of a final judgment  against  Licensee in any
                         amount  exceeding  $50,000  to  discharge,   vacate  or
                         reverse the judgment, or to stay execution of it, or if
                         appealed,  to  discharge  the  judgment  within 30 days
                         after a final adverse decision in the appeal; or

                  (6)    Licensee loses possession or the right to possession of
                         all or a  significant  part of the Hotel or Hotel site;
                         or

                  (7)    Licensee fails to continue to identify the Hotel to the
                         public as a Homewood Suites hotel; or

                  (8)    Licensee contests in any court or proceeding Licensor's
                         ownership  of the System or any part of the System,  or
                         the  validity  of  any  service   marks  or  trademarks
                         associated with Licensor's business; or

                  (9)    Any action is taken toward  dissolving  or  liquidating
                         Licensee or any such guarantor,  if it is a corporation
                         or partnership, except for death of a partner; or

                  (10)   Licensee or any of its  principals is, or is discovered
                         to have  been  convicted  of a  felony  (or  any  other
                         offense if it is likely to  adversely  reflect  upon or
                         affect the Hotel,  the System,  the Licensor and/or its
                         Entities in any way; or

                  (11)   Licensee  maintains false books and records of accounts
                         or submits false reports or information to Licensor.

                  (12)   Licensee  becomes a Competitor (as defined in Paragraph
                         6a(19).

         E.       DE-IDENTIFICATION OF HOTEL UPON TERMINATION.  Upon termination
                  or expiration of the term,  Licensee

<PAGE>

                  will take  whatever  action is necessary to assure that no use
                  is made of any part of the System  (including  but not limited
                  to the Marks) at or in connection with the Hotel or otherwise.
                  Licensee  shall  return to  Licensor  the Manual and all other
                  proprietary materials,  remove all distinctive System features
                  of the Hotel,  including the primary freestanding sign down to
                  the   structural   steel,   and   take   all   other   actions
                  ("DE-IDENTIFICATION   ACTIONS")   required  to  preclude   any
                  possibility  of  confusion  on the part of the public that the
                  Hotel  is still  using  all or any  part of the  System  or is
                  otherwise  holding  itself  out to the  public  as a  Homewood
                  Suites  hotel.  If within 30 days  after  termination  of this
                  Agreement  Licensee  fails  to  comply  with  this  paragraph,
                  Licensor or its agents at  Licensee's  expense,  may enter the
                  premises  of  the  Hotel  to  perform  the   De-identification
                  Actions.  The  preceding  sentence  shall not in any way limit
                  Licensor's other rights or remedies under this Agreement.

         F.       LIQUIDATED  DAMAGES.  The parties  recognize the difficulty of
                  ascertaining  damages to  Licensor  resulting  from  premature
                  termination   of  this   Agreement,   and  have  provided  for
                  liquidated damages, which represent the parties' best estimate
                  as to the damages arising from the circumstances in which they
                  are  provided  and which are only  damages  for the  premature
                  termination  of this  Agreement,  and not as a  penalty  or as
                  damages for breaching  this  Agreement or in lieu of any other
                  payment.  If this  Agreement is  terminated  other than by the
                  expiration of the term  described in Paragraph  13a,  Licensee
                  will pay Licensor,  within 10 days of termination,  liquidated
                  damages in an amount determined as follows:

                  (1)    an amount equal to the amount payable under Paragraph 7
                         (regarding   Fees)  for  the  three   years   prior  to
                         termination; or

                  (2)    if the  Hotel  opened  but has been  Open for less than
                         three years,  an amount equal to the greater of: (i) 36
                         times the monthly average payable under Paragraph 7, or
                         (ii) 36 times the amount payable under  Paragraph 7 for
                         the last full month prior to termination; or

                  (3)    if the Hotel opened,  but has not been in operation for
                         one full  month,  an amount  equal to $3,000  per Guest
                         Suite in the Hotel; or

                  (4)    if the Agreement is terminated  before the commencement
                         of  construction  or of the Work (as  described  in the
                         applicable attachment),  an amount equal to the initial
                         application  fee  that  would  be  due  for  a  license
                         application   according  to  Licensor's   then  current
                         franchise offering circular (in addition to any initial
                         application fee already paid); or

                  (5)    if the Agreement is terminated  after  commencement  of
                         construction  or of the Work but before  opening of the
                         Hotel,  an  amount  equal  to  two  times  the  initial
                         application fee; or

                  (6)    if the  Agreement is  terminated  pursuant to Paragraph
                         13b  (permitted  termination  after  10th or 15th year)
                         only,  an  amount  equal to the  amount  payable  under
                         Paragraph  7 for the  two  years  prior  to  notice  of
                         termination.

                  Furthermore, Licensee recognizes the additional harm by way of
                  confusion   with   respect  to  national   accounts,   greater
                  difficulty in re-entering  the market,  and damage to goodwill
                  of the Marks that  Licensor  will  suffer in the case of (i) a
                  Licensee who  terminates two or more license  agreements  with
                  Licensor at approximately the same time (between either itself
                  or  its  affiliates  and  Licensor)  or  (ii) a  license  that
                  terminates as a result of the Hotel or Licensee being acquired
                  by a  Competitor,  and the Licensor is unable or elects not to
                  buy the Hotel pursuant to Paragraph 11f (each of these will be
                  referred to as a "SPECIAL TERMINATION").  Licensee agrees that
                  in the case of a Special Termination, the amount of liquidated
                  damages as calculated above will be doubled.

14.      RENEWAL.

         This Agreement is non-renewable.

<PAGE>

15.      RELATIONSHIP OF PARTIES.

         A.       NO AGENCY RELATIONSHIP. Licensee is an independent contractor.
                  Neither party is the legal  representative or agent of, or has
                  the power to obligate (or has the right to direct or supervise
                  the daily  affairs of) the other for any  purpose  whatsoever.
                  Licensor  and   Licensee   expressly   acknowledge   that  the
                  relationship intended by them is a business relationship based
                  entirely  on, and defined by, the express  provisions  of this
                  Agreement  and that no  partnership,  joint  venture,  agency,
                  fiduciary or employment relationship is intended or created by
                  reason of this Agreement.

         B.       LICENSEE'S  NOTICES TO PUBLIC CONCERNING  INDEPENDENT  STATUS.
                  Licensee  will  take  all  necessary   steps  including  those
                  reasonably  requested  by Licensor to minimize the chance of a
                  claim being made against  Licensor for anything that occurs at
                  the Hotel,  or for acts,  omissions or obligations of Licensee
                  or anyone associated or affiliated with Licensee or the Hotel.
                  Such steps may, for example,  include  giving  notice in Guest
                  Suites, public rooms and advertisements, on business forms and
                  stationery,  etc., making clear to the public that Licensor is
                  not the owner or operator of the Hotel and is not  accountable
                  for  what  happens  at the  Hotel.  Unless  required  by  law,
                  Licensee will not use the words "Homewood",  "Homewood Suites"
                  or any other names or mark associated with the System to incur
                  any obligation or indebtedness on behalf of Licensor. Licensee
                  shall not enter  into or  execute  any  contracts  in the name
                  "Homewood  Suites  hotel",  and all  contracts for the Hotel's
                  operations  and  services at the Hotel shall be in the name of
                  Licensee or Licensee's management company. Likewise, the words
                  "Homewood",  "Homewood Suites",  or any similar words will not
                  be  used  to  name or  identify  developments  adjacent  to or
                  associated with the Hotel, nor will Licensee use such names in
                  its general business in any manner separated from the business
                  of the Hotel.

16.      MISCELLANEOUS.

         A.       SEVERABILITY AND INTERPRETATION. The remedies provided in this
                  Agreement  are  not  exclusive.   If  any  provision  of  this
                  Agreement  is held to be  unenforceable,  void or  voidable as
                  being contrary to the law or public policy of the jurisdiction
                  entitled  to  exercise  authority  hereunder,   all  remaining
                  provisions  shall  nevertheless  continue  in full  force  and
                  effect  unless  deletion  of  such  provision(s)  impairs  the
                  consideration  for this Agreement in a manner which frustrates
                  the purpose of the parties or makes  performance  commercially
                  impracticable.  The  provisions  of this  Agreement  shall  be
                  interpreted  based on the reasonable  intention of the parties
                  in the context of this  transaction  without  interpreting any
                  provision in favor of or against any party whether or not such
                  party  was the  drafting  party  or by such  party's  position
                  relative to the other party.  Any covenant,  term or provision
                  of this Agreement  which, in order to effect the intent of the
                  parties, must survive the termination of this Agreement, shall
                  survive any such termination.

         B.       CONTROLLING LAW. This Agreement shall become valid when signed
                  by the  parties  hereto.  It shall be deemed  made and entered
                  into in the  State of  Tennessee  and  shall be  governed  and
                  construed  under and in accordance  with the laws of the State
                  of  Tennessee.  In  entering  into  this  Agreement,  Licensee
                  acknowledges  that it has  sought,  voluntarily  accepted  and
                  become  associated  with  Licensor  who  is  headquartered  in
                  Memphis,  Tennessee,  and that this Agreement contemplates and
                  will  result  in  business   relationships   with   Licensor's
                  headquarter's   personnel.   The  choice  of  law  designation
                  permits,  but does not require that all suits  concerning this
                  Agreement be filed in the State of Tennessee.

         C.       EXCLUSIVE  BENEFIT.  This  Agreement  is  exclusively  for the
                  benefit  of the  parties  hereto,  and it may not give rise to
                  liability to a third party,  except as otherwise  specifically
                  set forth  herein.  No agreement  between  Licensor and anyone
                  else is for the benefit of Licensee.

         D.       ENTIRE  AGREEMENT.  Licensor and the Licensee each acknowledge
                  and  warrant to each other that they wish to have all terms of
                  this business  relationship defined in this written agreement.
                  Neither  Licensor nor Licensee wishes to enter into a business
                  relationship  with the other in which any terms or obligations
                  are the subject of alleged  oral  statements  or in which oral
                  statements   serve  as  the  basis  for  creating   rights  or
                  obligations  different than or supplementary to the rights and
                  obligations set forth in this Agreement. Accordingly, Licensor
                  and Licensee  agree that this  Agreement  and any  Attachments
                  hereto  and  the  documents  referred  to  herein,   shall  be
                  construed  together and shall  supersede  and cancel any prior
                  and/or   contemporaneous   discussions  or  writings  (whether
                  described

<PAGE>

                  as representations,  inducements,  promises, agreements or any
                  other term)  between  Licensor or anyone  acting on its behalf
                  and Licensee or anyone acting on his, her or its behalf, which
                  might  be  taken to  constitute  agreements,  representations,
                  inducements,  promises or understandings (or any equivalent to
                  such terms) with respect to this Agreement or the relationship
                  between the parties and Licensor and Licensee  each agree that
                  they have  placed,  and will  place,  no  reliance on any such
                  discussions  or  writings.   This  Agreement   (including  any
                  Attachments  and the  documents  referred to  herein),  is the
                  entire  agreement  between the parties and contains all of the
                  terms, conditions,  rights and obligations of the parties with
                  respect to the Hotel or any other  aspect of the  relationship
                  between the parties.  No future  license or offer of a license
                  for additional  locations or any other business  activity have
                  been  promised to Licensee  and no such license or offer shall
                  come into  existence,  except by means of a separate  writing,
                  executed by Licensor's  officer or such other entity  granting
                  the  license  and   specifically   identified   as  a  License
                  Agreement. No change, modification, amendment or waiver of any
                  of the  provisions  of this  Agreement  will be effective  and
                  binding upon  Licensor  unless it is in writing,  specifically
                  identified  as an  amendment to this  Agreement  and signed by
                  Licensor's officer.

         E.       LICENSOR'S  WITHHOLDING  CONSENT.  Licensor  may  withhold its
                  consent,  wherever  required  under  this  Agreement,  if  any
                  default or breach by  Licensee  exists  under this  Agreement.
                  Approvals  and  consents  by  Licensor  will not be  effective
                  unless  evidenced  by a  writing  duly  executed  on behalf of
                  Licensor.

         F.       NOTICES.  Any notice must be in writing and will be  effective
                  on  either  (1)  the  day  it is  sent  via  facsimile  with a
                  confirmation  of  receipt;  or (2) the  third  day after it is
                  mailed by first class mail;  or (3) the day it is delivered by
                  express  delivery  service;  or (4) the  third day after it is
                  sent by certified mail to the appropriate party at its address
                  first  stated  above or to such person and at such  address as
                  may be designated by notice hereunder.

         G.       GENERAL   RELEASE.   Licensee   and  its   respective   heirs,
                  administrators,  executors, agents,  representatives and their
                  respective  successors and assigns,  hereby  release,  remise,
                  acquit and forever  discharge  Licensor  and its  Entities and
                  their officers, directors,  employees, agents, representatives
                  and their  respective  successors and assigns from any and all
                  actions,  claims,  causes of  action,  suits,  rights,  debts,
                  liabilities,   accounts,  agreements,   covenants,  contracts,
                  promises, warrants, judgments,  executions,  demands, damages,
                  costs and expenses,  whether known or unknown at this time, of
                  any kind or nature, absolute or contingent,  if any, at law or
                  in equity, on account of any matter, cause or thing whatsoever
                  which has happened, developed or occurred at any time from the
                  beginning  of time to and  including  the  date of  Licensee's
                  execution and delivery to Licensor of this  Agreement and that
                  they will not institute any suit or action at law or otherwise
                  against Licensor directly or indirectly  relating to any claim
                  released hereby by Licensee.  This release and covenant not to
                  sue shall survive the termination of this Agreement.  Licensee
                  shall take  whatever  steps are  necessary or  appropriate  to
                  carry out the terms of this release upon Licensor's request.

         H.       DESCRIPTIVE   HEADINGS.   The  descriptive  headings  in  this
                  Agreement  are for  convenience  only and shall not control or
                  affect the meaning or  construction  of any  provision in this
                  Agreement.

         I.       WARRANTIES.  Licensee warrants, represents and agrees that all
                  statements  made by Licensee in the  Application  submitted to
                  Licensor  in  anticipation  of this  Agreement  and all  other
                  documents  and  information  submitted  by Licensee  are true,
                  correct and  complete as of the date hereof and will  continue
                  to be updated  so that they are true,  correct  and  complete.
                  This warranty and representation shall survive the termination
                  of this Agreement.

         J.       TIME.  Time is of the essence in this Agreement.

         K.       INCLUDING. Including shall mean including, without limitation.

         L.       COUNTERPARTS.  This Agreement may be executed in counterparts,
                  and each copy so  executed  and  delivered  shall be deemed an
                  original.

<PAGE>

         M.       AMENDMENTS.  If an  amendment  to this  Agreement  is required
                  prior to its execution, said amendment shall be made a part of
                  this  Agreement  as an  Attachment.  If an  amendment  to this
                  Agreement is necessary  after its  execution,  said  amendment
                  shall  be  made a part  of  this  Agreement  in the  form of a
                  separate document.

         N.       PERFORMANCE  REQUIREMENTS/RESPONSIBILITIES.  Attachment  A  is
                  hereby  incorporated  by  reference  and  made a part  of this
                  Agreement  to set  forth  certain  of  Licensee's  performance
                  conditions and requirements.

         O.       BUSINESS  JUDGMENT.  The  parties  hereto  recognize,  and any
                  mediator  or  judge is  affirmatively  advised,  that  certain
                  provisions of this Agreement describe the right of Licensor to
                  take (or refrain from taking)  certain actions in the exercise
                  of its  assessment of the long-term  best  interests of hotels
                  using the  System,  considering  the  interests  of the System
                  overall.  Where such decisions have been taken by Licensor and
                  are supported by the business judgment of Licensor,  neither a
                  mediator  nor a judge  nor any  other  person  reviewing  such
                  decisions  shall  substitute  his, her or its judgment for the
                  judgment so exercised by Licensor.

17.      EXPIRATION OF OFFER.

         This  Agreement  constitutes  an offer  which must be  accepted  by the
         Licensee  named on the signature  page hereof by dating,  executing and
         returning to Licensor two copies  hereof (and all  attachments  hereto,
         including,  if required,  the Guaranty) on or before the date specified
         on the Rider.

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

LICENSEE:                            LICENSOR:

APPLE SUITES MANAGEMENT, INC.        PROMUS HOTELS, INC.

By: /s/ Glade M. Knight              By: /s/ Thomas P. Powell
   -------------------------------       ---------------------------------------

Name:  Glade M. Knight, President    Name:   Thomas P. Powell
     -----------------------------         -------------------------------------

Title:      President                Title:    Vice President
       ---------------------------          ------------------------------------

Witness:                             Witness:  Linda K. Hendrix
        --------------------------            ----------------------------------

Date:                                Date:     July 10, 2000
     -----------------------------         -------------------------------------

<PAGE>

                                    GUARANTY

Location:   4950 BASELINE ROAD, BOULDER, COLORADO
          ----------------------------------------------------------------------

As an  inducement  to Promus  Hotels,  Inc.  ("LICENSOR")  to execute  the above
License   Agreement,   the   undersigned,    jointly   and   severally,   hereby
unconditionally  warrant to Licensor and its  successors and assigns that all of
Licensee's   representations  in  the  License  Agreement  and  the  application
submitted  by Licensee to obtain the License  Agreement  are true and  guarantee
that all of Licensee's obligations under the above License Agreement,  including
any amendments thereto whenever made (the "AGREEMENT"),  will be punctually paid
and performed.

Upon  default  by  Licensee  or  notice  from  Licensor,  the  undersigned  will
immediately make each payment required of Licensee under the Agreement.  Without
affecting the obligations of the undersigned  under this Guaranty,  Licensor may
without notice to the undersigned extend,  modify or release any indebtedness or
obligation  of Licensee,  or settle,  adjust or  compromise  any claims  against
Licensee.  The undersigned waive notice of amendment of the Agreement and notice
of demand for payment or performance by Licensee.

Upon the death of an individual guarantor,  the estate of such guarantor will be
bound by this Guaranty but only for defaults and obligations  hereunder existing
at the time of death,  and the obligations of the other guarantors will continue
in full force and effect.

The Guaranty  constitutes a guaranty of payment and not of collection,  and each
of the  guarantors  specifically  waives any  obligation  of Licensor to proceed
against  Licensee  on any money or  property  held by  Licensee  or by any other
person or entity as collateral  security,  by way of set off or  otherwise.  The
undersigned  further agree that this Guaranty  shall continue to be effective or
be  reinstated  as the  case  may  be,  if at  any  time  payment  or any of the
guaranteed obligations is rescinded or must otherwise be restored or returned by
Licensor upon the insolvency, bankruptcy or reorganization of Licensee or any of
the undersigned, all as though such payment has not been made.

This Guaranty shall be governed and construed  under and in accordance  with the
laws of the State of Tennessee.

IN WITNESS  WHEREOF,  each of the undersigned has signed this Guaranty as of the
date of the above Agreement.

Witnesses:                                Guarantors:

                                          Apple Suites, Inc.

 /s/ [Illegible]                          By: /s/ Glade M. Knight         (Seal)
---------------------------                   ----------------------------
                                               Glade M. Knight, President

                                       19

<PAGE>

                      ATTACHMENT A - PERFORMANCE CONDITIONS
                               CHANGE OF OWNERSHIP

I.     CONSULTATION.  Licensee or its representative(s) shall meet with Licensor
       at a location selected by Licensor,  within 30 days following the date of
       Licensee's  receipt  of a request  from  Licensor  for  consultation  and
       coordination with the project manager assigned to Licensee by Licensor.

II.    WORK AND PURCHASE REQUIREMENT. Attachment C, the Product Improvement Plan
       (the "PIP"), is incorporated by reference, attached to and made a part of
       this Agreement. Licensee shall perform the renovation and/or construction
       work and  purchase  the items  described  on the PIP (the  "WORK")  on or
       before  the  completion  date  specified  on the  Rider.  Whether  or not
       indicated on the PIP, the Work shall include Licensee's purchasing and/or
       leasing and installing all fixtures, equipment,  furnishings,  furniture,
       signs, computer terminals and related equipment, supplies and other items
       which would be  required  of a new  Homewood  Suites  licensee  under the
       Manual and such  other  equipment,  furnishings  and  supplies  as may be
       required by Licensor  in order to operate  the Hotel.  Licensee  shall be
       solely  responsible  for obtaining all  necessary  licenses,  permits and
       zoning variances required for the Hotel.

III.   APPROVAL OF  ARCHITECT/ENGINEER  AND CONTRACTOR.  Licensor shall have the
       right to approve the  architect/engineer,  general  contractor  and major
       subcontractors  for the Work.  The Work  shall not  commence  until  such
       approval has been granted,  which approvals may be conditioned on bonding
       of the  contractors.  Prior to  commencement of the Work, if requested by
       Licensor,  Licensee  shall  submit to  Licensor,  resumes  and  financial
       statements of the  architect/engineer,  general  contractor and any major
       sub-contractors for the Work and such additional  information  concerning
       their experience and financial responsibility as Licensor may request.

IV.    APPROVAL OF PLANS.  On or before the Plans  submission  date specified on
       the  Rider,  Licensee  shall  submit to  Licensor,  Licensee's  plans and
       specifications  and  drawings  for  the  Work,   including  the  proposed
       furnishings,  fixtures,  equipment and signs (collectively,  "PLANS") for
       approval.  Licensor may supply  Licensee  with  representative  prototype
       Guest Room and public area plans and schematic  building plans as a guide
       for preparation of plans and  specifications for the Hotel. Once Licensor
       has approved the Plans,  no change shall be made to the Plans without the
       advance consent of Licensor. In approving the Plans, Licensor does not in
       any manner warrant the depth of its analysis or assume any responsibility
       for the  efficacy of the Plans or the  resulting  construction.  Licensee
       shall cause the Hotel renovation and/or  construction to be in accordance
       with this Agreement, the approved Plans, the Manual and the PIP.

V.     COMMENCEMENT;  COMPLETION.  Licensee shall commence the Work on or before
       the date specified on the Rider and shall continue the Work uninterrupted
       (except for interruption by reason of events  constituting force majeure)
       until it is  completed.  Notwithstanding  the  occurrence  of any  events
       constituting  force  majeure,  or any  other  cause,  the  Work  shall be
       completed and the Hotel shall be furnished, equipped, and shall otherwise
       be in compliance with this Agreement not later than the date specified on
       the Rider.  Licensor  shall have the sole right to determine  whether the
       Work has been completed in accordance with this  Agreement,  the approved
       Plans, the Manual and the PIP.

VI.    INSPECTION.  During the course of the Work,  Licensee shall, and Licensee
       shall cause the architect,  engineer,  contractors, and subcontractors to
       cooperate  fully with Licensor for the purpose of permitting  Licensor to
       inspect the Hotel in order to determine whether the Work is being done in
       accordance with this Agreement and shall provide Licensor with samples of
       construction materials, etc. as Licensor may request.

VII.   REPORTS.  Licensee  shall  submit to  Licensor  each month after the date
       hereof (or more

                                 Attachment A-1

<PAGE>

       frequently if Licensor shall so request) a report  showing  progress made
       toward fulfilling the terms of this Agreement.

VIII.  ACQUISITION OF EQUIPMENT,  FURNISHINGS,  AND SUPPLIES/STAFFING.  Licensee
       shall order,  purchase and/or lease and install all fixtures,  equipment,
       furnishings,  furniture, signs, computer terminals and related equipment,
       supplies  and other  items  required by  Licensor,  this  Agreement,  the
       approved Plans, the Manual and the PIP.

       In  accordance  with  the  Manual  and  such  other  instructions  as are
       furnished  to Licensee by  Licensor,  Licensee  shall cause to be hired a
       staff to operate the Hotel,  and all such  personnel  shall be trained as
       required  by the  Manual.  All costs and  expenses  incurred  directly or
       indirectly  in hiring and training  such staff shall be paid by Licensee,
       except as expressly provided otherwise in the Manual.

IX.    COST OF CONSTRUCTION  AND EQUIPPING.  Licensee shall bear the entire cost
       of the Work, including the cost of the plans, professional fees, licenses
       and permits, equipment, furniture, furnishings and supplies.

X.     LIMITATION OF LIABILITY. Notwithstanding the right of Licensor to approve
       the Plans,  the  architect,  engineer  and  certain  contractors,  and to
       inspect  the Work and the  Hotel,  Licensor  shall have no  liability  or
       obligation  with respect to the Work, or the design and  construction  of
       the Hotel, as the rights of Licensor are being  exercised  solely for the
       purpose of  assuring  compliance  with the terms and  conditions  of this
       Agreement.  Licensor does not undertake to approve the Hotel as complying
       with governmental requirements or as being safe for guests or other third
       parties.  Licensee  should  not rely  upon  Licensor's  approval  for any
       purpose  whatsoever  except  compliance  with  Licensor's then prevailing
       standards and requirements of the Manual.

XI.    CONDITIONAL AUTHORIZATION.  Licensor may conditionally authorize Licensee
       to continue to operate the Hotel as a Homewood  Suites  hotel even though
       Licensee has not fully complied with the terms of this  Agreement.  Under
       certain  circumstances,  Licensor  may  suspend  services  to  the  Hotel
       (including  reservation  services)  while the Work is being  performed by
       Licensee.

XII.   PERFORMANCE OF AGREEMENT. Licensee agrees to satisfy all of the terms and
       conditions of this Agreement, and to equip, supply and staff the Hotel in
       accordance  with  this  Agreement  and  to  cooperate  with  Licensor  in
       connection  therewith.  As a result of Licensee's  efforts to comply with
       the  terms  and  conditions  of  this  Agreement,   Licensee  will  incur
       substantial  expense and expend  substantial  time and  effort.  Licensee
       acknowledges  and  agrees  that  Licensor  shall  have  no  liability  or
       obligation  to  Licensee  for any  losses,  obligations,  liabilities  or
       expenses  incurred by Licensee if this  Agreement is  terminated  because
       Licensee  has  not  complied  with  the  terms  and  conditions  of  this
       Agreement.

                                 Attachment A-2

<PAGE>

                                  ATTACHMENT B
                           RIDER TO LICENSE AGREEMENT

1.     Name and Address of Licensee:           Apple Suites Management, Inc.
                                               Attn: Glade M. Knight
                                               306 East Main Street
                                               Richmond, Virginia  23219

2.     Location of Hotel:                      4950 Baseline Road
                                               Boulder, Colorado 80303

3.     Number of Approved Guest Rooms:         112

4.     Effective Date of License:              Date  Apple  Suites, Inc. closes
                                               the   purchase  of  and  obtains
                                               possession  and  control  of the
                                               Hotel ("Closing").

                                               It   shall   be   a    condition
                                               precedent  to  the  validity  of
                                               this    Agreement,    and   this
                                               Agreement  shall  be of no force
                                               and  effect and  Licensee  shall
                                               have no rights  hereunder unless
                                               and until on or before  December
                                               13,  1999,  Licensee  shall have
                                               submitted to  Licensor,  written
                                               verification,    in    a    form
                                               satisfactory  to Licensor,  that
                                               Closing  has  occurred.   Within
                                               five days of  Closing,  Licensee
                                               shall  submit to Licensor  (i) a
                                               copy of the deed,  as  recorded,
                                               transferring  the Hotel to Apple
                                               Suites, Inc., (ii) a copy of the
                                               lease agreement between Licensee
                                               and  Apple  Suites,   Inc.,  and
                                               (iii) the franchise  application
                                               fee in the amount of $50,400

5.     Term of License to Expire:              20  years  from  the   date   of
                                               Closing

6.     Plans Submission Dates:                 as  required  under  the Product
                                               Improvement Plan (Attachment C)

7.     Construction or Work Commencement Date: upon Closing

8.     Construction or Work Completion Date:   within 180 days  of  Closing  but
                                               not later than March 30, 2001

9.     Offer Expiration Date [Paragraph 17]:   December 23, 1999

10.    Ownership of Licensee:                  Apple Suites Management, Inc.100%

                                               Stockholder:
                                               -----------
                                               Glade M. Knight              100%

                                 Attachment B-1

<PAGE>

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