LOAN AGREEMENT

LOAN AGREEMENT

THIS LOAN AGREEMENT ("Agreement") is made and entered into as of the 13th

day of January, 2005, by and between HUMPHREY HOSPITALITY TRUST, INC., a

Virginia corporation (the "Borrower"), whose address for purposes of this

Agreement is 309 North 5th Street, Norfolk, Nebraska 68702 (Attn: Don Heimes),

and GREAT WESTERN BANK, a Nebraska corporation (the "Bank"), whose address for

purposes of this Agreement is 6015 Northwest Radial Highway, Omaha, Nebraska

68104 (Attn: Kolleen Hoover).

RECITALS

WHEREAS, Bank has agreed to make a Loan (as defined herein) to Borrower to

be evidenced by the Loan Documents (as defined herein), which Loan is to be

secured by those certain hotels described on Exhibit "A" attached hereto and

incorporated herein by this reference (the "Hotels" or individually, the

"Hotel") (the term "Hotels" also includes any additional or substitute Hotels

given to Bank as security for the Loan), along with all tangible and intangible

personal property used in connection with the operation of said Hotels; and

WHEREAS, Borrower owns 100% of the capital stock of E&P REIT Trust, a

Maryland real estate investment trust ("E&P Trust"), and Humphrey Hospitality

REIT Trust, a Maryland real estate investment trust ("Humphrey Trust"), which

are the general partners of E&P Financing Limited Partnership, a Maryland

limited partnership ("E&P"), and Humphrey Hospitality Limited Partnership, a

Virginia limited partnership ("HHLP"), respectively. Humphrey Trust owns 100% of

the capital stock of TRS Leasing, Inc., a Virginia corporation ("TRS Leasing").

E&P and HHLP (E&P and HHLP, and any other future owner of any of the Hotels, or

any Hotel given as additional Collateral or substituted for an existing Hotel,

are collectively referred to as the "Hotel Owners") are the respective fee

owners of the Hotels, as set forth on Exhibit "A". The Hotel Owners lease the

Hotels to TRS Leasing pursuant to that certain First Amended and Restated Master

Lease Agreement dated as of November 26, 2002 (the "Lease"). The Borrower, the

Hotel Owners and TRS Leasing are referred to in this Agreement on a consolidated

basis as the "Humphrey Entities."

WHEREAS, in connection with its obligations as lessee of the Hotels, TRS

Leasing is the franchisee under those certain franchise agreements with Super 8

Motels, Inc. and Choice Hotels International, Inc., which are described on

Exhibit "B" attached hereto and incorporated herein by this reference

(collectively, the "Franchise Agreements"); and

WHEREAS, the Loan is subject to the terms and conditions set forth in this

Agreement and in the other Loan Documents and Borrower knows and acknowledges

that Bank is relying on this Agreement, and the other Loan Documents, in making

the Loan.

For good and valuable consideration, the receipt and sufficiency of which

are hereby acknowledged, the Borrower and the Bank hereby agree as follows:

AGREEMENT

ARTICLE I

AMOUNT AND TERM OF THE LOAN

1.01. The Loan. The Bank agrees, on the terms and conditions hereinafter

set forth, to loan to the Borrower, by means of one or more advances made from

time to time during the period of time from the date hereof, to and including

the earlier of January 13, 2007 (the "Maturity Date"), or the date of the

occurrence of an Event of Default (as hereinafter defined), not to exceed the

lesser of the Borrowing Base (as hereinafter defined) or the principal sum of

Twenty-Two Million and no/100ths Dollars ($22,000,000) (the "Initial Loan Limit

Amount"), which Initial Loan Limit Amount will be reduced to Twenty Million and

no/100ths Dollars ($20,000,000) (the "Step-Down Loan Limit Amount") on the first

day of the thirteenth full month after the date hereof (the "Step-Down Effective

Date") (the lesser of the Borrowing Base, the Initial Loan Limit Amount or the

Step-Down Loan Limit Amount, as applicable, is collectively referred to as the

"Loan"). The books and records of the Bank shall, in the absence of manifest

error, be prima facie evidence in any court or other proceeding brought to

enforce the Note (as hereinafter defined) as to the principal balance of the

Loan outstanding at any time and the amount of accrued interest.

1.02. The Note. The Loan made by Bank shall be evidenced by a promissory

note (the "Note") of even date herewith payable to the order of Bank in the

original principal amount set forth in Section 1.01 above.

1.03. Use and Application of Loan Proceeds. The entire proceeds of the Loan

shall be used for the following purposes:

(A) Pay-off at closing of existing indebtedness owed to U.S. Bank

National Association, a national banking association ("US Bank"), through a

revolving credit facility and term loan.

(B) Provide operating funds for Borrower.

(C) Provide interim funding for the acquisition of hotel properties by

Borrower.

Borrower agrees that the proceeds of the Loan shall be used as described in this

Section 1.03 and shall not be used for any other purpose.

1.04. Advance of Funds.

(A) Manner of Making Advances. If the Borrower is eligible for

advances upon the Note and if, at the time of the advance, all conditions

to making an advance of funds have been satisfied, funds will be advanced

as provided in this Section 1.04(A) or as the Borrower and Bank may

otherwise agree from time to time.

(1) Advances will be made from time to time to the Borrower's

Operating Account (as defined in Section 4.01(E)) as necessary so that

the Operating Account will, at all times, have an account balance of

$100,000 in collected funds. In the event the balance in the Operating

Account exceeds $100,000 at the close of business on any Business Day

(as defined in Section 1.10), the excess amount over $100,000 in such

Operating Account shall be withdrawn from the Operating Account by

Bank and applied toward payment of the principal amount due on the

Loan.

(2) Advances will also be made from time to time upon the written

request for an advance by Borrower to Bank.

(B) Limitations on Advances. Notwithstanding anything in this

Agreement to the contrary, no advance shall be made or permitted hereunder

which would result in the unpaid principal balance of the Note, including

any advances made under the Security Documents hereunder, exceeding in the

aggregate at any one time the lesser of: (i) the Borrowing Base, or (ii)

the Initial Loan Limit Amount or the Step-Down Loan Limit Amount, as

applicable. No advance shall be made upon the occurrence and continuance of

any Event of Default described in Section 5.01 below. Any recordation of an

advance by the Bank on the Note, the reverse side of the Note, or on

supplemental sheets attached to the Note, or otherwise on the Bank's

records, made pursuant to this Agreement shall be prima facie evidence in

any court or other proceeding brought to enforce the Note that the Borrower

has authorized the Bank to make such advances and that the Bank has

effected such advances. The advance will be deemed to be at the request of

and for the benefit of Borrower when credited to Borrower's account with

Bank or when advanced in accordance with the instructions of an authorized

representative of Borrower. Bank may establish a cut-off time for

requesting advances, with requests made after that time being treated as

made the next Business Day of Bank.

1.05. Repayment and Interest.

(A) Interest Rate. The unpaid principal balance of the Loan will bear

interest from the date of execution of the Note at the national prime rate

of interest as published in the Wall Street Journal (base rate on corporate

loans posted by at least 75% of the nation's thirty (30) largest banks),

which rate of interest shall be adjusted daily as said national prime rate

of interest changes. (As applicable to the interest rate during such

period, the "Interest Rate"). Such adjustment in the Interest Rate will

occur without prior notice to Borrower. Changes in the Interest Rate shall

be effective from the date of the changes and shall be applied to amounts

outstanding on the Loan.

(B) Repayment. Borrower shall repay the aggregate unpaid principal

amount of the Loan plus interest accrued thereon as follows:

(1) Borrower shall pay interest only on the unpaid principal

balance from time to time outstanding, with such payments beginning on

the first Business Day of the calendar month following the month in

which closing occurs and continuing on the first Business Day of each

month thereafter until such time as the entire principal amount of the

Loan has been paid in full.

(2) Borrower shall pay, on the Step-Down Effective Date,

sufficient principal to reduce the outstanding unpaid principal amount

of the Loan to the Step-Down Loan Limit Amount if the outstanding

unpaid principal balance exceeds the Step-Down Loan Limit Amount on

the Step-Down Effective Date.

(3) If at any time the unpaid principal balance on the Note shall

exceed the maximum principal amount allowed under the Loan and this

Agreement, Borrower shall pay to Bank, upon oral or written demand by

Bank, an amount equal to the difference between the then outstanding

principal balance of the Loan and the maximum principal amount allowed

under the Loan.

(4) Payments of the unpaid principal shall be made from the

Borrower's Operating Account as provided in Section 1.04(A)(1).

(5) Borrower shall pay all remaining unpaid principal, all

accrued and unpaid interest, any unpaid Non-Usage Fee (as defined in

Section 1.06), and all other unpaid fees and charges due under the

Loan Documents on or before the Maturity Date.

Bank shall be authorized to withdraw funds from Borrower's Operating

Account to make any of the payments referred to above, but the failure or

refusal of Bank to do so shall not excuse or extend the due date for any

such payment. Bank agrees that on each annual anniversary date of the date

of this Agreement during the term of this Loan, it will review the Loan to

determine if the Bank will extend the Maturity Date for an additional

twelve (12) month period, which decision will be made at the Bank's sole

discretion. If the Bank so elects, Bank will notify Borrower in writing

that Bank has made such election, stating in such notice the new Maturity

Date for repayment of all principal and interest. If Bank does not elect to

extend such dates, then the Maturity Date will remain as provided in this

Agreement or as previously extended by Bank, as applicable. Failure of the

Bank to give notice of any extension as provided herein shall mean that an

extension of the Maturity Date has not been granted.

(C) Prepayment. If Borrower repays this Loan in full prior to January

13, 2007 and requests a release of all, or substantially all, of the

Collateral given to secure the Loan, Borrower shall pay to Bank a

prepayment fee of $100,000 (the "Prepayment Fee"), which will be added to

the then unpaid principal balance as of the payoff date. Other than

Borrower's obligation to pay any Non-Usage Fee and the Prepayment Fee,

Borrower may pay all or a portion of the amount owed earlier than it is due

without premium or penalty. Early payments will not, unless agreed to by

Bank in writing, relieve Borrower of Borrower's obligation to continue to

make payments as required in this Agreement. Borrower agrees not to send

Bank payments marked "paid in full," "without recourse," or similar

language. If Borrower sends such a payment, Bank may accept it without

losing any of Bank's rights under the Note or this Agreement, and Borrower

will remain obligated to pay any further amount owed to Bank.

(D) Default Rate. On any overdue principal amount of the Loan,

Borrower shall pay to the Bank interest on demand at the Default Rate from

the date such amount becomes due to the date such amount is paid in full,

but in no event shall the Default Rate exceed the highest rate permitted by

applicable law. The "Default Rate" is a rate equal to four percent (4%)

over the Interest Rate then in effect.

(E) Usury. It is the intention of the Bank and the Borrower hereof

that the Note and this Agreement and all provisions hereof and of all

documents securing the Note conform in all respects to applicable law so

that no payment of interest or other sum construed to be interest shall

exceed the highest lawful rate permissible. In determining the rate of

interest paid or payable under this Agreement and the Note or any documents

securing the same, all funds paid or to be paid as interest or construed to

be interest shall be prorated, allocated, or spread as permitted under

applicable law. If, through any circumstances, the contract of the Borrower

and the Bank would result in exceeding the highest lawful interest rate

applicable to this transaction, or if the Borrower pays any sum as interest

or construed to be interest in excess of such rate, then, ipso facto, (i)

the amount contracted for shall be automatically reduced to the highest

lawful rate authorized for this transaction, and (ii) the amount of excess

interest paid shall be applied to the reduction of the principal balance of

the Note, if any, and if the principal balance has been fully paid, the

excess interest shall be refunded to the Borrower and Borrower agrees to

accept such refund. Thereupon, the Bank shall not be subject to any penalty

provided for the contracting for, charging, or receiving of interest in

excess of such highest lawful rate, regardless of when or the circumstances

under which such refund or application was made.

1.06 Non-Usage Fee. Beginning on January 14, 2006 and continuing to and

including the Maturity Date, Borrower will incur a fee at the rate of .25% per

annum computed on the average of the unused portion of the Loan for the

preceding three (3) months (the "Non-Usage Fee"). The Non-Usage Fee shall be

paid on April 1, 2006, on the first Business Day of each calendar quarter

thereafter and on the Maturity Date.

1.07 Borrowing Base. At no time shall the unpaid principal balance of the

Note exceed the lesser of: (i) an amount equal to 60% of the total appraised

value of the Hotels, or (ii) an amount that would result in a Revolving Loan

Debt Service Coverage Ratio (as defined in Section 4.01(G)) of less than 1.5 to

1 (the "Borrowing Base"). For purposes of determining the Borrowing Base, the

Bank shall utilize the appraisals prepared in connection with this Loan, or such

appraisals as may be obtained by Bank from time to time during the term of this

Loan. If, at any time, the then outstanding principal balance of the Note

exceeds the Borrowing Base, Borrower will pay to Bank the amount of such excess

upon demand by the Bank.

1.08. Costs of Loan. Borrower shall pay to Bank all costs of recording any

of the Security Documents herein mentioned, all title insurance policy premiums,

the reasonable attorney's fees Bank has incurred in connection with the Loan,

the cost of obtaining any appraisal, survey, assessment, report, statement,

legal opinion or other document required to be furnished by Borrower pursuant to

this Agreement, and all other reasonable and ordinary expenses associated with

this Loan.

1.09. Payments and Computations. Borrower shall make each payment hereunder

and under the Note not later than 1:00 p.m. (Central time) on the Business Day

when due in lawful money of the United States of America to the Bank at its

address set forth above in same day funds. Borrower hereby authorizes the Bank,

if and to the extent payment is not made when due hereunder and under the Note,

to charge any amount so due from time to time against any account of the

Borrower with the Bank. All computations of interest hereunder and under the

Note shall be made by the Bank on the basis of a year of 360 days for the actual

number of days (including the first day but excluding the last day) elapsed.

1.10. Payment on Non-Business Days. Whenever any payment to be made

hereunder or under the Note shall be stated to be due on a Saturday, Sunday or a

public or bank holiday in Omaha, Nebraska (any other day being a "Business

Day"), such payment may be made on the next succeeding Business Day, and such

extension of time shall in such case be included in the computation of payment

of interest.

1.11 Substitution and Addition to Collateral. Subject to the prior written

approval of the Bank, which approval shall not be unreasonably withheld,

Borrower may substitute Hotels, obtain the release of Hotels, and add Hotels to

maintain compliance with, or cure any noncompliance with, any of the covenants

set forth in Article IV of this Agreement. At the time of making any request for

approval, the Borrower shall satisfy the conditions precedent in Article II with

respect to any substituted or added Hotels. In the event the proposed added or

substituted Hotel was acquired more than two years before the date of the

proposed addition or substitution, Borrower will provide to Bank, at the time

Borrower requests the addition or substitution, an appraisal of the Hotel,

prepared by a duly licensed appraiser reasonably acceptable to Bank and which is

not more than two (2) years old, showing the fair market value of the Hotel

proposed for addition or substitution. The Bank shall have thirty (30) days

after the request for approval by the Borrower to determine if the Hotel

proposed to be substituted or added is of appropriate character, quality and

value. Any request to add Hotels to cure any noncompliance with any covenants

set forth in Article IV shall be made within the thirty (30) day period provided

herein to cure any noncompliance with this Agreement. Once Bank approves any

substituted or added Hotel, Borrower shall have thirty (30) days thereafter to

comply with the requirements of Article IV with respect thereto. Any proposed

substituted or added Hotel shall not be included in the Borrowing Base

computation or used in determining compliance with the covenants in Article IV

until such time as Bank agrees to accept such Hotel as additional or substituted

Collateral. The time limits stated herein for adding or substituting Hotels as

Collateral shall not extend the time for cure of Events of Default by Borrower.

ARTICLE II

CONDITIONS PRECEDENT

2.01. Condition Precedent to Advances Under the Loan. The obligation of the

Bank to close this Loan and to make any advance under the Loan is subject to the

Bank having received all of the following, in form satisfactory to Bank and the

following conditions precedent being performed to the reasonable satisfaction of

Bank, at the time of closing and at the time Borrower requests each advance, as

applicable:

(A) Borrower shall have duly executed and delivered to Bank the Note

evidencing the Loan payable to the order of the Bank.

(B) Deeds of trust, mortgages, and assignments of rents, duly executed

and acknowledged, from the respective Hotel Owners as set forth on Exhibit

"A" to and in favor of Bank, which encumber each of the Hotels and secure

the Note together with all other obligations of Borrower to Bank pursuant

to the terms of this Agreement. Said deeds of trust and mortgages shall

create first liens and encumbrances on the Hotels, subject only to current

non-delinquent real estate taxes as to each Hotel. Such deeds of trust and

mortgages shall include any easement rights in favor of the Hotel Owners.

Bank shall determine, in its discretion, as to whether a deed of trust or

mortgage will be utilized as to any Hotel.

(C) Security agreements and UCC-1 financing statements, including,

where required by Bank, fixture filings for each Hotel, duly executed by

Borrower, TRS Leasing and by each Hotel Owner of record, granting to Bank

under the Uniform Commercial Code (the "UCC"), a first security interest in

all tangible and intangible personal property and fixtures of Borrower, TRS

Leasing and the Hotel Owners located at the Hotels or used exclusively in

connection therewith, including but not limited to, inventory, equipment,

fixtures, accounts and general intangibles of Borrower, TRS Leasing and the

Hotel Owners, and in the Operating Account, whether now owned or hereafter

acquired, and in the proceeds of the same (all such property and the Hotels

are collectively referred to as the "Collateral"). Such financing

statements shall be prepared in a manner that allows recording in the

appropriate governmental recording offices to create such first security

interest in the Collateral.

(D) Agreements concerning the Franchise Agreements with estoppel

certifications, described on Exhibit "B", duly executed by TRS Leasing and

the franchisor of each Hotel, to and in favor of Bank, among other things

assigning to Bank all of TRS Leasing's right, title and interest in and to

the Franchise Agreements.

(E) Letter Agreement among Royal Host Management, Inc., Bank and TRS

Leasing pertaining to the Management Agreement between Royal Host

Management, Inc. and TRS Leasing, dated August 1, 2004, ("Management

Agreement") granting to Bank certain rights regarding the Management

Agreement, and containing estoppel certifications.

(F) Environmental indemnity agreement duly executed by Bank, TRS

Leasing and by each Hotel Owner, in form and substance satisfactory to

Bank, agreeing to indemnify Bank from any loss or damage arising out of the

environmental conditions specified in such agreement.

(G) Subordination, nondisturbance and attornment agreement duly

executed by TRS Leasing, Borrower and each Hotel Owner in form and

substance satisfactory to Bank.

(H) Estoppel certificate duly executed by TRS Leasing, in form and

substance satisfactory to Bank, pertaining to the Lease.

(I) Non-foreign mortgager (FIRPTA) certificate for Borrower, E&P,

HHLP, and TRS Leasing.

(J) Duly certified corporate resolutions, consents, authorizations and

powers of attorney of Borrower evidencing the authority of the officers of

Borrower to execute and deliver on behalf of Borrower this Agreement, the

Note, any of the Security Documents and other Loan Documents to be executed

by Borrower and to execute and deliver any of the other documents required

to be executed by Borrower under this Agreement or otherwise as a part of

this Loan.

(K) Duly certified resolutions, consents, authorizations and powers of

attorney or other showing of authority satisfactory to Bank, evidencing the

authority of the officers of each Hotel Owner to execute and deliver on

behalf of the Hotel Owners any of the Security Documents and other Loan

Documents to be executed by such Hotel Owners, and to execute and deliver

any of the other documents required to be executed by such Hotel Owners

under this Agreement or otherwise as a part of this Loan.

(L) Duly certified resolutions, consents, authorizations and powers of

attorney or other showing of authority satisfactory to Bank evidencing the

authority of the officers of TRS Leasing to execute and deliver on behalf

of TRS Leasing any of the Security Documents to be executed by TRS Leasing,

and to execute and deliver any of the other documents to be executed by TRS

Leasing under this Agreement or otherwise as a part of this Loan.

(M) Certified articles of incorporation and bylaws of Borrower and

certificate of good standing (issued within two months of the date of this

Agreement) from the State of Virginia.

(N) Certified certificate of limited partnership and limited

partnership agreement for HHLP and certificate of good standing (issued

within two months of the date of this Agreement) from the State of

Virginia.

(O) Certified certificate of limited partnership and limited

partnership agreement for E&P and certificate of good standing (issued

within two months of the date of this Agreement) from the State of

Maryland.

(P) Certified articles of incorporation and bylaws of TRS Leasing and

certificate of good standing (issued within two months of the date of this

Agreement) from the State of Virginia.

(Q) Organizational documents of any other subsidiary or affiliate of

Borrower and/or consents, resolutions, authorizations and powers of

attorney of such subsidiaries or affiliates showing the authority of

officers, general partners, limited partners or members (as the case may

be) to execute and deliver any of the Loan Documents on behalf of such

entity, as required by the Bank to properly authorize the Loan transaction

described herein or as required by any title company in connection with the

title insurance policies contemplated herein.

(R) Complete copies of Phase I Environmental Assessments

("Assessments") for each Hotel, prepared by environmental assessment firms

satisfactory to Bank, together with a letter from each environmental

assessment firm preparing such Assessment stating that Bank can rely upon

such Assessment in connection with the Loan. Bank may obtain environmental

data reports ("EDR") updating such Assessments to the current date. Such

Assessments and EDRs shall show that none of the Hotels contains any

hazardous materials, underground storage tanks or other conditions or

operations that may create future environmental liability.

(S) An ALTA survey of the real property for each Hotel, satisfactory

to Bank, prepared by a registered land surveyor, certified to Bank and the

title company issuing the title insurance for the Hotel (the "Title

Company"), or for which Bank and the Title Company has received a letter

from the surveyor preparing the survey or, if such original surveyor is no

longer in business, another registered land surveyor reasonably

satisfactory to Bank, that entitles the Bank and the Title Company to rely

thereon. Such survey shall verify all legal descriptions of the Hotels,

show all lot lines, set-back lines, all improvements, all utility lines and

facilities, all easements, all adjacent public rights of way and access

thereto, current property zoning, and any other restrictions or physical

matters on the site or reflected in the public records with respect to the

Hotels. In the event Bank elects to rely on an existing survey of a Hotel,

Borrower shall obtain a letter from each surveying firm that prepared such

survey, or another registered land surveyor reasonably satisfactory to

Bank, stating that Bank can rely upon such Survey in connection with the

Loan, and shall provide to Bank and the Title Company a Borrower's

certificate that no material changes have occurred to the real property or

improvements constituting the Hotel in question since the survey was

prepared.

(T) One or more ALTA lender's policies of title insurance for all of

the Hotels, with Bank as the insured, insuring the liens of Bank's deeds of

trust and mortgages as being first liens on each Hotel, subject only to the

lien of any unpaid current real estate taxes. All standard exceptions to

such policies shall be deleted, and the policies shall contain the

following endorsements: Comp 100; Zoning 3.1; Access; Survey; Location;

Contiguity (if multiple lots or parcels); Subdivision Control Act and

Creditor's Rights. At Closing, Bank will receive a "mark-up" of the title

insurance commitment for such insurance showing that (i) all requirements

for issuance of the policies have been satisfied; (ii) the Bank's deeds of

trust and mortgages are first liens on each Hotel; (iii) the standard

exceptions to coverage will be deleted from the final policies; and (iv)

the final policy will contain the requested endorsements.

(U) Independent written appraisals of the value of each Hotel in form

and substance satisfactory to Bank, prepared by qualified and licensed real

estate appraisers.

(V) Satisfactory evidence of hazard insurance coverage on each of the

Hotels as required by the deeds of trust and mortgages, and satisfactory

evidence of maintenance of general liability, auto liability, workers

compensation insurance, and other insurance as may be required by any of

the Loan Documents.

(W) Current certificates of occupancy for each Hotel issued by the

governmental jurisdiction with authority to issue such certificates for the

Hotels, or, if the Hotel is in a jurisdiction that does not issue

certificates of occupancy, a Borrower's certificate signed by an authorized

officer of the Borrower to that effect. If the certificate of occupancy is

lost or misplaced, Borrower shall obtain a copy thereof from the issuing

authority.

(X) Certified copies of requests for information or copies (Form

UCC-11) or equivalent reports, of all effective financing statements which

name Borrower or any Hotel Owner or TRS Leasing as debtor and which are

filed in the respective States of organization of such entities together

with copies of such financing statements (none of which shall cover the

property purported to be covered by the Loan Documents), together with

releases and/or termination of any security interest in the Collateral

reflected in such request for information.

(Y) The Company shall have paid to the Bank the documentation fee

previously agreed upon by the parties in the commitment letter for the Loan

and shall have reimbursed Bank for all third party costs incurred by Bank

in connection with this Loan as provided in Section 6.05 hereof.

(Z) The favorable opinion of Borrower's counsel, or local counsel, as

applicable, in form satisfactory to Bank and such counsel, dated as of the

date of closing, that, subject to customary assumptions, qualifications and

exceptions, (i) this Agreement, the Note and all other Loan Documents

executed by Borrower have been duly executed and delivered by the Borrower

and constitute the legal, valid and binding obligation of the Borrower,

enforceable in accordance with their respective terms, (ii) the Security

Documents (as defined in this Section 2.01), when duly executed and

delivered by the entities obligated to execute such documents (other than

Borrower), will constitute the legal, valid and binding obligations of such

parties thereto, enforceable in accordance with their respective terms,

(iii) no approval or other action by any other person, entity or court

shall be required for the due and proper execution and delivery of the Loan

Agreement, the Note, the Security Documents and the other Loan Documents,

(iv) that the deeds of trust, mortgages and other Security Documents are in

proper form for recording in appropriate public offices, (v) that the Loan

is not usurious under applicable law, and (vi) the priority of future

advances.

(AA) Such documents, duly executed by one or more of the appropriate

Humphrey Entities, as are necessary to establish the Operating Account, the

sweep authorization from the local bank accounts for each Hotel and the

advances to, and repayments from, the Operating Account of Borrower as

provided in Section 1.04(A)(1) and 4.01(E) hereof.

(AB) Such other certificates, approvals, opinions or documents as the

Bank or the Title Company may reasonably require.

All of the documents referred to above and all other documents to be

delivered by the Borrower to the Bank pursuant to this Agreement are

hereinafter collectively referred to as the "Loan Documents". The documents

referred to in subparagraphs (B), (C), (D) and (E) of this Section 2.01 are

collectively referred to as the "Security Documents".

2.02. Closing. It is contemplated by the parties that closing of this Loan

shall occur on or before January 13, 2005.

2.03 Post-Closing Advances. Any advance made to or for the benefit of

Borrower shall be deemed a reaffirmation by the Borrower at the time of the

advance, that (i) the representations and warranties of the Borrower contained

in this Agreement are correct as of such date, (ii) Borrower, each Hotel Owner

and TRS Leasing are in compliance with the covenants contained in this Agreement

as of such date and (iii) no event has occurred and is continuing, or would

occur as a result of such advance, which constitutes an Event of Default (as

defined herein) or would constitute an Event of Default but for any requirement

that notice be given or time elapse or both.

ARTICLE III

REPRESENTATIONS AND WARRANTIES

3.01. Representations and Warranties of the Borrower. The Borrower

represents and warrants as follows:

(A) Existence and Good Standing of Borrower. The Borrower is a

corporation duly organized and existing under the laws of the State of

Virginia and is in good standing as of the date hereof. Borrower has

corporate power and authority to own, lease and operate its properties and

carry on its business as now conducted. The Borrower is duly qualified and

authorized to execute this Agreement and the other Loan Documents and to

perform the obligations thereof. Borrower's principal office is located in

Nebraska.

(B) Existence and Good Standing of TRS Leasing. TRS Leasing is a

corporation duly organized and existing under the laws of the State of

Virginia and is in good standing as of the date hereof. TRS Leasing has

corporate power and authority to own, lease and operate its properties and

carry on its business as now conducted. TRS Leasing's principal office is

located in Nebraska.

(C) Existence and Good Standing of E & P. E & P is a limited

partnership duly organized and existing under the laws of the State of

Maryland and is in good standing as of the date hereof. E&P Trust is the

general partner of E & P and is a real estate investment trust duly

organized and existing under the laws of the State of Maryland, and is in

good standing as of the date hereof. E & P has limited partnership power

and authority to own, lease and operate its properties and carry on its

business as now conducted. E & P's principal office is located in Nebraska.

(D) Existence and Good Standing of HHLP. HHLP is a limited partnership

duly organized and existing under the laws of the State of Virginia.

Humphrey Trust is the general partner of HHLP and is a real estate

investment trust duly organized and existing under the laws of the State of

Maryland, and is in good standing as of the date hereof. HHLP has limited

partnership power and authority to own, lease and operate its properties

and carry on its business as now conducted. HHLP's principal office is

located in Nebraska.

(E) No Conflict for Borrower. The execution, delivery and performance

by Borrower of this Agreement, the other Loan Documents and all other

documents, to which Borrower is a party, and the consummation of the

transactions contemplated thereby are within the powers of Borrower and

have been duly authorized by all necessary action, does not and will not

contravene (i) the articles, bylaws or other organizational documents of

Borrower; or (ii) any law, rule, regulation, order, writ, judgment,

injunction, decree or any contractual provision restriction binding on or

affecting the Borrower; or (iii) result in or require the creation or

imposition of any lien, security interest or other charge or encumbrance

(other than pursuant hereto) upon or with respect to any of the properties

of the Borrower.

(F) No Conflict for Hotel Owners. The execution, delivery and

performance by Hotel Owners of the Loan Documents and all other documents,

to which Hotel Owners are a party, and the consummation of the transactions

contemplated thereby are within the powers of Hotel Owners and have been

duly authorized b