Document:

Exhibit 10.7

                               APPLE SUITES, INC.
                    c/o Cornerstone Realty Income Trust, Inc.
                              306 East Main Street
                            Richmond, Virginia 23219

                                December 22, 1999

Promus Hotels, Inc.
755 Crossover Lane
Memphis, Tennessee 38117-4900

                   Re:   Agreement   of  Sale  dated   November  22,  1999  (the
                         "Purchase  Agreement";  capitalized terms not otherwise
                         defined herein shall have the meanings ascribed to such
                         terms in the Purchase  Agreement) between Hampton Inns,
                         Inc.,  Promus Hotels  Florida,  Inc. and Promus Hotels,
                         Inc., as Sellers, and Apple Suites, Inc., as Buyer

Gentlemen:

         Reference is made to (i) the Purchase  Agreement  and (ii) the purchase
money  note of even  date  herewith  made by the  undersigned  in the  amount of
$4,384,500 (the "Note") and the mortgages  and/or deeds of trust and/or deeds to
secure debt securing the Note (individually and collectively, the "Mortgage").

         We hereby  agree  that  until such time as all  amounts  evidenced  and
secured by the Note and the Mortgage have been paid in full we shall not:

         (i) transfer, or agree to transfer (or suffer or permit the transfer or
     agreement to transfer), in any manner, either voluntarily or involuntarily,
     by  operation  of  law or  otherwise,  all  or  any  portion  of any of the
     properties located in Henrico County,  Virginia,  Pinellas County,  Florida
     and Anne Arundel  County,  Maryland  heretofore  transferred to us by deeds
     from you dated  September  20, 1999 or November  29, 1999 (the  "Restricted
     Properties"),  without, in any such case, your prior written consent, which
     shall  not be  unreasonably  withheld  in the  case  of a  transfer  to any
     affiliate or subsidiary wholly owned by Apple Suites, Inc.; or

         (ii) encumber,  or agree to encumber, in any manner, either voluntarily
     or involuntarily,  by operation of law or otherwise,  all or any portion of
     any  of the  Restricted  Properties,  or any  interest  or  rights  therein
     without,  in any such case,

<PAGE>

     your prior  written  consent.  As  used  in this clause,  "encumber"  shall
     include,  without  limitation, the placing or permitting the placing of any
     mortgage,  deed of trust, assignment of rents or other security device. (It
     is understood that you may grant or deny your consent under this clause and
     the immediately preceding clause in your sole discretion).

         Notwithstanding the foregoing,  it is understood that neither the lease
to Apple Suites Management,  Inc. from us, dated September 20, 1999 nor the Deed
of Trust,  Assignment  of Leases  and Rents  and  Security  Agreement  (or other
mortgage document) made by us and Apple Suites Management, Inc. for your benefit
dated September 20, 1999 or November 29, 1999,  shall  constitute a violation of
the foregoing restrictions.

                                         Very truly yours,

                                         APPLE SUITES, INC.,
                                         a Virginia corporation

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

                                       2Exhibit 10.8

                                                          (HOTEL FRANCHISE FEES)

                                 PROMISSORY NOTE

$45,000.00                                                    RICHMOND, VIRGINIA
                                                               DECEMBER 22, 1999

FOR VALUE RECEIVED,  Apple Suites Management,  Inc., a Virginia corporation (the
"Maker"),  hereby  makes an  UNCONDITIONAL  PROMISE TO PAY TO THE ORDER OF Apple
Suites,  Inc., a Virginia  corporation  (the  "Holder"),  in lawful money of the
United  States of America,  the  principal sum of Forty Five Thousand and 00/100
Dollars  ($45,000.00),  together with interest  thereon,  in accordance with the
following terms:

1.       INTEREST.

         Interest  shall  accrue on the unpaid  principal  balance at the annual
rate of nine percent (9%) (the "Note Rate"). With respect to amortized payments,
interest at the Note Rate shall be based on a 360-day year and a uniform  period
of 30 days per month.  If there is an Event of Default (as defined  below),  the
annual rate of interest shall  increase to twelve  percent  (12%),  and shall be
compounded  monthly (the "Default  Rate").  The  computation  of interest at the
Default Rate shall be based on the actual number of days elapsed.

2.       PAYMENTS.

         (a) The debt  represented  by this  Note  shall be paid in one  hundred
twenty-one  (121)  consecutive  monthly  installments.  The  amount of the first
installment  shall be $112.50,  consisting  entirely of  interest,  based on the
actual number of days elapsed.  The amount of each subsequent  installment shall
be $570.04, consisting of principal and interest on an amortized basis.

         (b)  Installments  shall be due and  payable  on the  first day of each
month,  beginning with January 1, 2000. The due date for each installment  shall
be deemed a "Payment  Date." The entire  balance of principal and interest shall
be due and payable in full on January 1, 2010.

         (c) The Maker is entitled to prepay the  principal  balance  under this
Note,  in whole or in  part,  on one or more  occasion(s),  without  premium  or
penalty.

         (d) The Holder shall have the right to allocate all payments under this
Note in accordance with the following priority: (1) first, to accrued but unpaid
interest; and (2) second, to unpaid principal.

3.       PAYMENT ADDRESS AND METHOD.

         The Holder shall have the right,  which may be exercised on one or more
occasion(s)  in the sole  discretion of the Holder,  to require the Maker to use
any address for the  delivery of payment and any  reasonable  method of payment,
including  but not  limited to  cashier's  check or

<PAGE>

wire  transfer.  For present purposes, the Holder  hereby  requires the Maker to
use a single check for each installment  payment, and to use the mailing address
shown below for the delivery of all payments:

                                    Apple Suites, Inc.
                                    Attn:  Stanley J. Olander, Jr., Secretary
                                    306 East Main Street
                                    Richmond, VA  23219

4.       SECURITY AND COLLATERAL.

         The  Holder  and the  Maker  acknowledge  and  agree  that no  security
interest has been granted in any property or collateral in connection  with this
Note.

5.       PURPOSE.

         The Maker has leased an  extended-stay  hotel in Jackson,  Mississippi.
The Maker has  received  funds from the Holder for the  satisfaction  of various
franchise fees for such hotel.  This Note serves as evidence of the indebtedness
of the Maker to the Holder,  and provides for the repayment of such indebtedness
to the Holder.

6.       EVENTS OF DEFAULT.

         (a)      Each  of  the  following  events shall constitute an "Event of
Default" under this Note:

                  (1) the Maker's  failure to pay to the Holder,  within a grace
period of five (5) calendar days after any Payment Date,  the full amount due on
such Payment Date;

                  (2) the  acceleration  of any payment  obligation of the Maker
under any other promissory  note, debt instrument or other financial  instrument
or agreement that now exists or may exist in the future;

                  (3)  the   commencement  of  any  proceeding  to  appoint  any
receiver, trustee, custodian,  liquidator, or similar official for the Maker, or
the final appointment of any of the foregoing;

                  (4) the attachment,  levy, seizure or garnishment,  whether in
whole or in part, of any wages,  funds,  financial accounts or other property of
the Maker;

                  (5) the entry of any judgment  against the Maker that exceeds,
when  combined  with its other unpaid  judgments,  ten percent (10%) of the then
unpaid principal balance under this Note;

                  (6) the  general  inability  of the  Maker to pay its debts as
they become due;
                                      -2-

<PAGE>

                  (7) the filing or commencement, by the creditors of the Maker,
of any Insolvency  Action (as defined below) that is not dismissed within thirty
(30) calendar days after the original date of filing or commencement;

                  (8) the approval or voluntary filing of any Insolvency Action,
or the approval or consummation of any plan to make a general assignment for the
benefit of creditors, by the Maker;

                  (9) the  approval  of  any  plan,  or  the  execution  of  any
contract,  that causes or is intended to cause any of the following with respect
to the Maker:  (A) its dissolution;  (B) the liquidation of its assets;  (C) the
termination of its corporate existence,  whether by merger or otherwise;  or (D)
the sale or transfer of all, or substantially all, of its assets;

                  (10) any event  that  causes or will  cause the Maker to cease
its  business or  operations  for a period of more than thirty (30)  consecutive
calendar days; or

                  (11) any event that terminates or will terminate the business,
operations or legal existence of the Maker.

         (b)      For purposes of this Note, the term "Insolvency  Action" shall
mean any case or proceeding,  or petition  relating  thereto,  that arises under
any state  or  Federal  laws  relating  to bankruptcy or insolvency, whether now
existing or subsequently  enacted,  and that seeks  reorganization,  liquidation
or other relief with respect to the debts, assets or businesses of the Maker.

7.       REMEDIES.

         (a) If an Event of Default  occurs,  all unpaid  principal  and accrued
interest  under  this Note shall  become  immediately  due and  payable in full,
without any action whatsoever by the Holder.

         (b) The  Maker  shall  pay all  costs,  including  but not  limited  to
reasonable  legal  fees and  expenses,  whether  arising in  connection  with an
Insolvency  Action or  otherwise,  that may be incurred by the Holder to enforce
this Note or to collect the amounts due under this Note  ("Enforcement  Costs").
The Holder,  in its sole discretion,  shall have the right to treat  Enforcement
Costs as additional interest under this Note.

                                      -3-

<PAGE>

8.       TRANSFER AND ASSIGNMENT.

         (a) The Holder shall have the right to transfer this Note and to assign
any rights or remedies under this Note.  Such right may be exercised in whole or
in part, on one or more occasion(s),  in the sole discretion of the Holder.  The
obligations of the Maker under this Note shall not be altered or affected in any
way by any such transfer or assignment by the Holder.

         (b) The Maker shall be absolutely  prohibited from assigning any of its
obligations under this Note without the prior written consent of the Holder. The
Holder shall be entitled to withhold such consent in its sole discretion for any
reason or no reason.  Any attempted  assignment in violation of such prohibition
shall be ineffective and void.

         (c) The Holder and the Maker  acknowledge  and agree that this Note (1)
is evidence of commercial debt financing; and (2) is not an investment contract,
is not designed to raise capital, is not part of any plan of distribution and is
not related to any offering of securities.

9.       WAIVERS.

         (a) The Holder  shall not be deemed to have waived any of its rights or
remedies  under this Note  unless the  Holder  delivers a written  notice to the
Maker that  states the nature and scope of such  waiver.  Without  limiting  the
foregoing, no waiver of the Holder's rights or remedies shall be deemed to exist
solely  because the Holder,  on one or more  occasion(s),  may have:  (1) waived
certain  rights or remedies;  (2) elected  certain rights or remedies in lieu of
others;  (3) delayed in  exercising  any rights or  remedies;  (4)  extended any
Payment Dates under this Note; or (5) refrained  from requiring the Maker to act
in strict compliance with this Note.

         (b) The Maker, to the maximum extent  permitted by law, hereby grants a
complete, irrevocable and unconditional waiver of each of the following: (1) the
right to require presentment,  demand,  dishonor,  protest or any notices of any
kind or nature from the Holder in  connection  with this Note;  (2) the right to
assert any statute of limitations as a defense to the  enforcement of this Note;
(3) any claim that seeks to restrain,  enjoin, prohibit, delay or interfere with
any  transfer  of this Note by the Holder,  or any  assignment  of the  Holder's
rights or remedies  under this Note; (4) any claim that a transfer or assignment
by the Holder with respect to this Note has altered or affected the  obligations
of the Maker in any way; and (5) any claim that the Holder has waived its rights
or  remedies  under this Note in a manner  other than the  manner  described  in
subsection (a) immediately above.

                                      -4-

<PAGE>

10.      GENERAL.

         (a) Time is of the essence  with  respect to this Note and each Payment
Date.  Except as expressly set forth in this Note,  or in a written  waiver that
may be granted by the Holder,  there are no grace  periods and no  extensions of
time for payment with respect to this Note,  and no grace  periods or extensions
shall be implied.

         (b) This Note shall be interpreted  and enforced in accordance with the
laws of the  Commonwealth  of  Virginia,  without  regard  to any  choice of law
provisions or principles thereof to the contrary.

         (c) All  provisions  in this  Note are  severable  and each  valid  and
enforceable  provision shall remain in full force and effect,  regardless of any
official or formal  determination  that declares certain provisions of this Note
to be invalid or unenforceable.

         (d) Captions and  headings are used in this Note for  convenience  only
and shall not affect the  interpretation  of this Note.  Terms such as "hereof,"
"hereby,"  "hereto,"  "herein" and "hereunder"  shall be deemed to refer to this
Note as a whole, rather than to any particular provision of this Note.

         (e) All terms and  conditions of this Note shall be binding  upon,  and
enforceable  against,  the  Holder and the  Maker,  and all of their  respective
assignees and successors in title or interest.

                                            APPLE SUITES MANAGEMENT, INC.,
                                            a Virginia corporation

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

                                      -5-

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