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                                 PROMISSORY NOTE



$86,595.00                                                    December 30, 1997

      1. FOR VALUE RECEIVED, Host Funding, Inc., a Maryland Corporation,
("Maker"), promises to pay to the order of Blacor, Inc., a Texas Corporation
("Lender"), at 25 Highland Park Village, Box 100-530, Dallas, Texas 75205 (or
such other place for payment designated by Lender), amounts advanced under the
note, not to exceed EIGHTY-SIX THOUSAND FIVE HUNDRED AND NINETY-FIVE DOLLARS
($86,595.00), with interest from the date of advances on the principal balance
from time to time remaining unpaid at the rates hereinafter set forth. All
unpaid amounts hereof after default, and upon maturity, whether upon the due
date, by acceleration or otherwise, shall bear interest from the date of default
or maturity until paid at the lessor of (i) the highest rate permitted by
applicable law from time-to-time in effect so long a the debt evidenced hereby
is outstanding, or (ii) 18% per annum.

      2. This Promissory Note (this "Note") shall bear interest and be repaid as
follows:

                  (a) This Note shall bear interest at a rate per annum equal to
the lesser of (i) the highest rate permitted by applicable law from time to time
in effect so long as the debt evidenced hereby is outstanding, or (ii) 12%.

                  (b) The principal of this Note and all accrued interest
thereon shall be due and payable on demand, but in the event no earlier demand
is made, on May 31, 1998.

      3. In the event that default is made in the payment of any amounts payable
hereunder, and such default remains uncured for a period of five (5) days or
more after Lender has given written notice of such default to Maker, the entire
unpaid amount of this Note, together with accrued but unpaid interest thereon,
shall become due and payable, without further notice, and without further
presentment or demand for payment.

      4. If Lender declares the entire amount of this Note at once due and
payable, as provided in Paragraph 3 above, and this Note is placed in the hands
of an attorney for collection, or suit is brought on same, or the same is
collected through probate, bankruptcy or other judicial proceedings, then Maker
shall pay to Lender all reasonable costs and expenses of collection, including
reasonable attorneys' fees, incurred by Lender in connection therewith.

      5. Except as otherwise provided herein, Maker, and all endorses, if any,
expressly waive demand for payment, presentation for payment, notice of
intention to accelerate maturity, notice of acceleration, protest and notice of
protest as to this Note.

      6. This Note may be prepaid, upon at least one (1) days advance written
notice, in part from time-to-time, or in full, without penalty, premium, or fee
of any kind.

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      7. It is the intention of the Lender and Maker to conform strictly with
applicable usury laws now in force. No provision of this Note or in any other
document evidencing, securing or pertaining to the indebtedness evidenced hereby
shall require the payment, or permit the collection of, interest in excess of
the maximum amount permitted by applicable state or federal law. If at any time
the interest received or contracted for exceeds the maximum lawful rate, the
Lender shall refund the amount of the excess, or shall credit the amount of the
excess against amounts owing hereunder and such excess shall not be considered
the payment of interest. Determination of the rate of interest shall be made by
amortizing, prorating, allocating and spreading in equal parts during the full
term of this Note all interest at any time contracted for, charged or received
from Maker in connection herewith.

      8. This note replaces the promissory note dated June 19, 1997 and includes
accrued interest of $1,595 from June 19, 1997 through December 30, 1997.

      9. Lender shall have the option to either receive payment in cash or stock
at a price equal to 95% of the stock price at the close of business on December
30, 1997.

      10. Any notice under this Note shall be in writing and shall be effective
when actually delivered or, if mailed, shall be deemed effective three (3) days
after being deposited in the United States mail, first class, certified mail,
postage prepaid, directed to the addresses show immediately below. Any party may
change its address for notices under this Note by giving formal written notice
to the other parties, specifying that the purpose of the notice is to change the
party's address. For notice purposes, addresses are as follows:

            Lender                              Maker
            ------                              -----

            Blacor, Inc.                        Host Funding, Inc.
            25 Highland Park Village            6116 N. Central Expressway
            Box 100-530                         Suite 1313
            Dallas, Texas  75205                Dallas, Texas  75206


      Executed this 30th day of December 1997.


                                          By:  Host Funding, Inc.



                                          By: /s/ Bona K. Allen
                                             -----------------------------
                                                  Bona K. Allen
                                                   Chief Financial Officer




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