ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this "Agreement") is 
made as of April 3,1998, among South Seas Properties Company 
Limited Partnership, an Ohio limited partnership ("SSPC"), 
South Seas Resorts Company Limited Partnership, a Florida 
limited partnership ("SSRC") Safety Harbor Management 
Company, Ltd., a limited partnership ("SHMC"), and South Seas 
Estero Island, Ltd., a Florida limited Partnership ("SSEI"; 
SSPC, SSRC, SHMC and SSEI are referred to herein individually 
as a "Seller" and collectively as "Sellers") and CapStar 
Hotel Company, a Delaware corporation ("CapStar" or 
"Purchaser").

RECITALS:

A.	SSPC owns, among other things, the hotel, resort 
and other properties listed below (individually, an "SSPC 
Owned Property" and, collectively, the "SSPC Owned 
Properties"):

1.	Sundial Beach & Tennis Resort, Sanibel Island, Florida 
("Sundial"); 

2.    Sanibel Inn, Sanibel Island, Florida ("Sanibel Inn");

3.	Seaside Inn, Sanibel Island, Florida ("Seaside");

4.	Plantation View Shopping Center, Captiva Island, 
Florida ("Plantation View"); and

5.	Certain vacant land located on Captiva Island, Florida 
("Shirley's Parcel").

B.	SHMC holds a leasehold interest in the property 
commonly known as the Safety Harbor Resort & Spa, Safety 
Harbor, Florida ("Safety Harbor") , pursuant to the terms of 
the Safety Harbor Ground Lease, and owns in fee simple 
certain vacant land adjacent to Safety Harbor (the "SHMC 
Land");

C.SSRC currently manages the Best Western Pink Shell 
Beach Resort, Estero Island, Florida ("Pink Shell"), pursuant 
to the terms of the Pink Shell Management Agreement; 
provided, however, that: (i) the owner of the Pink Shell has 
entered into a chase agreement (the "Pink Shell Purchase 
Agreement") pursuant to which the Pink Shell will be sold to 
Boykin Hotel Properties, L.P., an Ohio limited partnership 
(the "Prospective Purchaser"), (ii) SSEI has entered into a 
purchase agreement pursuant to which, upon the consummation 
of the transactions contemplated by the Pink Shell Purchase 
Agreement, SSEI will purchase and the Prospective Purchaser 
will sell substantially all of the furniture, fixtures and 
equipment located at the Pink Shell (the "Pink Shell FF&E 
Purchase Agreement") for a purchase price equal 
to.$2,000,000,(the "Pink Shell FF&E Consideration"), and 
(iii) SSPC has entered into a lease (the "Pink Shell Lease") 
with the Prospective Purchaser pursuant to which SSPc will 
lease the Pink Shell from the Prospective Purchaser for a 
period of ten (10) years commencing upon consummation of the 
transaction contemplated by the Pink Shell Purchase Agreement;


D.	Sellers are engaged, directly or indirectly, 
in the following related businesses: (i) owning, operating 
and managing the SSPC owned Properties and the SHMC Land 
(which are referred to herein individually as a "Property", 
and collectively as the Properties"), (ii) managing the Pink 
Shell under the Pink Shell Management Agreement, (iii) 
operating and managing the Safety Harbor under the SHMC Ground 
Lease; (iv) operating the Vacation Planning Center pursuant 
to the Vacation Planning Center Lease; and (v) managing the 
short-term rental and leasing of individual condominium units 
and private residences at Sundial and Sanibel Inn, (all of 
the foregoing are hereafter collectively referred to as the 
"Business");


E.	Each Seller desires to sell to CapStar all of 
the right, title and interest in and to substantially all of 
the assets, properties and rights (contractual or otherwise) 
and business of such Seller with respect to the Business, on 
the terms and conditions set forth herein;


F.	Concurrently with the execution of this 
Agreement, SSPC, SSRC, South Seas Resort Limited Partnership, 
an Ohio limited partnership ("SSRLP"), Marco SSP, Ltd., a 
Florida limited partnership ("Marco"), and South Seas & 
Captiva Properties, L.P., a Florida limited partnership 
("SS&CP"), Capstar Hotel Company and CapStar Management 
Company, L.P. have entered into a separate Contribution 
Agreement (the "Other Agreement") providing for the 
contribution of certain assets of SSPC, SSRC, SSRLP, Marco 
and SS&CP to CapStar Management Company, L.P.; and


G.	CapStar Hotel Company and American General
Hospitality Corporation ("AGT") have signed definitive 
agreement pursuant to which, among other things, CapStar will 
merge with and into AGT (the "Merger").


NOW, THEREFORE, in consideration of the mutual 
covenants contained herein and for other good and valuable 
consideration, the receipt and sufficiency of which are 
hereby acknowledged, each Seller and CapStar agrees as 
follows:


ARTICLE I
DEFINITIONS; DESCRIPTION OF PURCHASED ASSETS;
EXCLUDED PROPERTY


Section 1.1 Definitions. Capitalized words not
otherwise defined in this Agreement have the meanings set 
forth in Exhibit A.

Section 1.2 Description of Assets.  Upon the terms 
and subject to the conditions set forth in this Agreement, 
at the Closing, each Seller shall convey, sell, transfer, 
assign and deliver to CapStar and Capstar shall purchase and 
take all right title and interest of each Seller in and to 
the Purchased Assets' but expressly excluding the Excluded 
Assets.


Section 1.3 -Excluded Assets. There shall be 
excluded from the assets, properties, rights (contractual and 
otherwise) and business to be sold transferred, assigned and 
delivered to CapStar pursuant to Section 1.2 the assets, 
Properties, rights (contractual and otherwise) and business 
set forth on schedule (the "Excluded Assets").


Section 1.4 Non-Assiqnment of Certain Property.

Notwithstanding anything to the contrary in this Agreement, 
to the extent that the assignment hereunder of any of the 
Purchased Assets shall require the consent of any other party 
(or in the event that any of the same shall be non-
assignable), neither this Agreement nor any action taken 
pursuant to its provisions shall constitute an assignment or 
an agreement to assign if such assignment or attempted 
assignment would constitute a breach thereof or result in the 
loss or diminution in the value of such Purchased Asset; 
provided, however, that in each such case, Sellers shall use 
commercially reasonable efforts to obtain the consent of such 
other party to an assignment thereof to CapStar.


ARTICLE II
ASSUMPTION OF CERTATN LIABILITIES, LIABILITIES NOT ASSUMED


Section 2.1 Assumption of Certain Liabilities.  
CapStar shall assume and be responsible for the timely 
satisfaction or performance, as the case may be, of the 
following: (i) all Liabilities with respect to the Properties 
and the Purchased Assets (including, without limitation, the 
Contracts and the Leases) arising or accruing on or after the 
Closing Date; provided, however, that in no event will 
CapStar be responsible for the payment of the Pink Shell FF&E 
Consideration; and (ii) any Liabilities described herein to 
the extent CapStar has received a credit against the Purchase 
Price therefor (collectively, the "Assumed Liabilities").


Section 2.2 Liabilities Not Assumed. Except for 
the Assumed Liabilities, CapStar shall not by execution and 
performance of this Agreement assume or otherwise be responsible 
for any Liabilities of Sellers or with respect to the 
Purchased Assets (the "Excluded Liabilities").

ARTICLE III
PURCHASE PRICE; PAYMENT OF PURCHASE PRICE


Section 3.1 Purchase Price.  In consideration for 
the Purchased Assets, CapStar shall pay to Sellers, in the 
manner set forth in Section 3.2 below, Forty-Four Million 
Five Hundred Thousand Dollars ($44,500,000), plus or minus 
the adjustments and prorations called for in Article XII and 
elsewhere in this Agreement (the "Purchase Price").


Section 3.2 Payment of Purchase Price.  On the 
terms and subject to the conditions of this Agreement, on the 
Closing Date, CapStar shall assume the Assumed Liabilities 
and pay to SSPC, by wire transfer of immediately available 
funds to an account designated by SSPC, the Purchase Price.


Section 3.3 Allocation. Sellers and CapStar hereby 
agree that the Purchase Price shall be allocated for 
purposes, of this Agreement and for federal, state and local 
tax purposes in the manner agreed to between Sellers and 
CapStar prior to the Closing.  Sellers and CapStar shall file 
all federal, state, local and foreign tax returns, including 
Internal Revenue Form 8594 in accordance with any such 
allocation agreed to by the parties, as the same may be 
adjusted by Article XII.  The provisions of this Section 
3.3 shall survive the Closing.


ARTICLE IV
DUE DILIGENCE PERIOD


Section 4.1 Due Diligence Period.

(a)	CapStar shall have until 5:00 p.m., Eastern 
Standard Time, on April 13, 1998 (the "Due Diligence 
Period"), to determine whether in its sole and absolute 
discretion it will proceed with this transaction.  If CapStar 
fails to notify SSPC in writing prior to the expiration of 
the Due Diligence Period that CapStar has elected not to 
proceed with this transaction, CapStar shall be deemed to 
have irrevocably elected to proceed with this 
transaction.


(b)	Subject to the remaining provisions of this 
Section 4.1, during the Due Diligence Period, Sellers shall 
give CapStar access to the Purchased Assets (in the case of 
the Pink Shell and Safety Harbor, to the extent Sellers are 
not otherwise restricted from providing such access by the 
fee owners of such properties).  Sellers shall furnish to 
CapStar as promptly as reasonably practicable during the Due 
Diligence Period all materials, documents and information 
concerning the 
Purchased assets as CapStar may reasonably request, to the 
extent the same exist and are in the possession or control of 
Sellers.  CapStar agrees that no Seller shall have to 
undertake any tests, studies or investigations in discharging 
its obligations under this Section 4.1(b).

(c)	CapStar shall have the right, at its cost and 
expense, to perform or cause to be performed, any structural, 
engineering and environmental tests, studies and investigations
deemed necessary by CapStar; provided, however, that such 
tests, studies and investigations undertaken by CapStar or 
its employees, agents or representatives (collectively, the 
'CapStar Representatives") shall be conducted only: (i) upon 
not less than. forty-eight (48) hours, prior notice to SSPC; 
(ii) during normal  business hours of SSPC; and (iii) with 
SSPC's prior written approval (which approval shall not be 
unreasonably withheld) All of CapStar's activities under this 
Section 4.1 shall be coordinated through Richard E. Krichbaum 
or his designee.  CapStar shall conduct its activities under 
this Section 4.1 in a manner so as not to unreasonably 
interfere or otherwise unreasonably disrupt the Business, 
operation of the Properties, operation of Safety Harbor or 
the Employees or guests of Sellers.  Notwithstanding any 
other provision of this Section 4.1 to the contrary, CapStar 
shall not perform any drilling, boring or similar invasive 
testing without Richard E. Krichbaum's prior written consent.  
CapStar shall not, without the prior written consent of 
Richard E. Krichbaum, (i) disclose the nature or purpose of 
its activities to anyone other than CapStar Representatives 
and Robert M. Taylor, Richard E. Krichbaum, Timothy R. Bogott 
or Judy Emens, or (ii) disrupt Sellers, Employees or guests.  
CapStar agrees to indemnify and hold harmless Sellers, their 
respective employees and partners from and against any and 
all losses, damages, claims, costs and expenses (including 
legal fees and expenses) to the extent caused by CapStar or 
the CapStar Representatives arising from any inspection 
activities undertaken under this Section 4.1. CapStar, at its 
own cost and expense, shall restore any damage to the 
Property caused by any of the tests, studies or 
investigations made by CapStar or the CapStar 
Representatives.  Any information obtained CapStar or the 
CapStar Representatives under this Section 4.1 shall be 
subject to the confidentiality provisions of Section 8.3(a) 
of this Agreement. The indemnification obligations and other 
obligations of CapStar in this Section 4.1 shall survive 
termination
of this Agreement and the Closing.


(d)	Sellers and CapStar have caused the Title Company
to furnish to CapStar the title insurance commitments listed on
Schedule 4.1(d) issued by the Title Company covering each parcel
of Real Property, binding the Title Company to issue ALTA Form 
B1970 
Owners Policies of Title Insurance, in favor of CapStar,
together with copies of all documents identified in such title
insurance commitments as exceptions to title (the "Title
Commitments"). Sellers have delivered or made available to
CapStar copies of the existing land surveys listed on Schedule
4.l(d) with respect to each parcel of Real Property (the
"Existing Surveys").  CapStar shall have until 5:oo p.m., Eastern
Standard Time, on April 13, 1998, to notify SSPC and the Title
Company of any restrictions, reservations, limitations,
easements, conditions, defects or encumbrances (together 
herein called "Title Defects") disclosed in the Title 
Commitments which are objectionable to CapStar.  If CapStar 
so notifies SSPC of a Title Defects, SSPC shall have until 
5:00 p.m., Eastern Standard Time, on April 14, 1998 (the 
"Reply Period") in which to cure or remove or commit to cure 
or remove such Title Defects.  Upon expiration of the Reply 
Period, the Title Company shall notify SSPC and CapStar as to 
whether or not it is then in a position to insure over the 
Title Defects or issue its policies of title insurance 
(collectively, the "Title Policies") without showing as 
exceptions the Title Defects.  If the Title Company shall 
notify the parties that it will issue the Title Policies, 
this transaction shall be consummated in accordance with the 
terms and provisions of this Agreement.  If the Title Company 
shall notify the parties that it will not issue the Title 
Policies with the Title Defects removed or insured over, this 
Agreement shall, at CapStar's option, thereupon be 
terminated, void and of no further force and effect, the 
Escrow Agent shall thereupon return to CapStar the documents 
Previously deposited by it, and the parties shall be fully 
released and discharged from any liability or obligation 
hereunder.  The items set forth in the Title Commitments to 
which CapStar does not object or to which CapStar has 
objected prior to expiration of the Due Diligence Period but 
which the Title Company has agreed in writing to remove or 
insure over are hereafter referred to as "Permitted Title 
Exceptions." Permitted Title Exceptions shall also include any 
purchase money security interests granted in connection with 
the purchase of any of the personal property that is the 
subject of the Equipment Leases being assumed by CapStar 
hereunder.  Notwithstanding anything to the contrary contained 
in this Agreement, with the exception of the Permitted Title 
Exceptions and any items for which CapStar has received a 
credit against the Purchase Price under Section 12.1 hereof, 
Sellers shall cause all monetary liens or encumbrances 
affecting the Properties and disclosed in the Title 
Commitments (or incurred after the effective time of the 
Title Commitments) to be removed on or prior to Closing.


ARTICLE V
SELLERS REPRESENTATIONS
AND WARRANTIES


To induce CapStar to enter into this Agreement and 
to consummate the transaction contemplated hereby, each 
Seller hereby makes the following representations and 
warranties with respect to itself and the Purchased Assets in 
which such Seller has an ownership interest (directly or 
indirectly), upon which each Seller acknowledges and agrees that 
CapStar is entitled to rely:


Section S. Organization and Power of Sellers. Each
Seller is duly formed or organized (as the case may be), 
Validly existing and in good standing or full force and effect in 
the 
jurisdiction of its formation or organization, and is 
qualified to do business in all jurisdictions in which such 
qualification is necessary (except where such failure to qualify 
would not
result in a Material Adverse Effect), and has all requisite 
corporate or partnership (as the case may be) power and 
authority to own, lease and operate its property and to 
carry on its business as now being conducted.


Section 5.2 Authority and Binding Obligation 
Seller has full corporate or partnership (as the case may be) 
power and authority to execute and deliver this Agreement and 
all documents now or hereafter to be executed and delivered 
by such Seller pursuant to this Agreement and to perform all 
obligations arising under this Agreement and under such other 
documents.  The execution, deliver and performance of this 
Agreement by each Seller has been duly and validly authorized 
by all necessary corporate or partnership (as the case may 
be) action on the part of such Seller, and this Agreement has 
been duly executed and delivered by such Seller.  This 
Agreement and such other documents, when executed and 
delivered, will each constitute the legal, valid and binding 
obligations of each Seller, enforceable against each Seller in 
accordance with their respective terms.


Section 5.3 Consents and Approvals; No Conflicts.
With respect to each Seller: (i) there is no legal 
impediment to such Seller's consummation of the transaction 
contemplated by this Agreement; and (ii) no filing with, and 
no permit, authorization, consent or approval of, any 
Governmental Authority is necessary for the consummation by 
such Seller of the transaction contemplated by this 
Agreement.  Neither the execution and delivery of this 
Agreement by such Seller, nor the consummation by such Seller 
of the transaction contemplated hereby, nor compliance by 
such Seller with any of the provisions hereof will: (i) result 
in a violation of any provision of such Seller's 
organizational or governing documents in which such Seller 
owns an interest; (ii) violate any Applicable Law to such 
Seller is subject; or (iii) result in a violation or breach of, 
or constitute a default under, any Material Contract.


Section 5.4 Title to Purchased Assets.

a)	Schedule 1.2(a) sets forth a true, correct and 
complete legal description of each parcel of the Land and the 
correct and complete address of each Property.  SSPC (with 
respect to Sanibel Inn, Seaside, Sundial, Plantation View and 
Shirley's Parcel), and SHMC (with respect to the SHMC Land), 
owns fee simple title to such Real Prooerty, which in 
each case shall be free and clear of all mortgages, pledges, 
liens, security interests, encumbrances and restrictions of 
any nature whatsoever as of the Closing Date, subject only to 
the Permitted Title Exceptions.  SHMC has good title to the SHMC 
Ground Lease and SSPC has good title to the Pink Shell Management 
Agreement, the Pink Shell Lease.


(b)	Each Seller has good title to the Personal 
Property used by it in connection with its business, which in 
each case shall be free and clear of all mortgages, pledges, 
liens, security interests, encumbrances and restrictions of 
any nature whatsoever as of the Closing Date, subject only to 
the Permitted Title Exceptions.


Section 5.5 Absence of Changes. Since December 31, 
1997, there has not been any material adverse change in the 
business, assets, properties, liabilities, revenues or 
financial condition of any Seller or the Properties, except 
for changes due to the seasonal nature of the Business.


Section 5.6 Financial Statements and Reports; Absence of
Undisclosed Liabilities.


(a)	Schedule 5.6 sets forth: (i) the audited and 
unaudited consolidated financial statements of SSPC, (ii) the 
unconsolidated unaudited financial statements of SSPC and 
SHMC, and (iii) certain other financial reports that have 
been furnished previously to CapStar by Sellers (the 
"Financial Statements").  The Financial Statements are true 
and correct in all material respects, have been prepared from 
and are in accordance with the books and records of each 
Seller in substantial conformity with GAAP applied on a 
consistent basis throughout the periods involved, and fairly 
present in all material respects the financial condition of 
each Seller as of the dates stated and the results of 
operations for the periods then ended (subject, in the case 
of unaudited interim consolidated financial statements, to normal 
year-end adjustments).  SSPC has filed all required forms, 
reports and documents with the Securities and Exchange 
Commission required to be filed by it pursuant to the 
Securities Exchange Act of 1934, as amended, and the rules 
and regulations promulgated thereunder, all of which have 
complied in all material respects with the applicable 
requirements of the Securities Exchange Act of 1934, as amended, 
and such rules and regulations (hereinafter collectively 
referred to as the "SSPC Reports").  None of the SSPC 
Reports, at the time filed, contained any untrue statement of 
a material fact or omitted to state a material fact required 
to be stated therein or necessary in order to make the statements 
therein, in light of the circumstances under which they were 
made, not misleading.  The financial statements of SSPC included 
in 
the SSPC Reports complied as to form in all material respects 
with 
applicable accounting requirements and the published
regulations of the Securities and Exchange Commission 
applied on a consistent basis (except as otherwise noted in 
such financial statements) and present fairly in all material 
respects the financial position, results of operations, cash 
flows and changes in financial position of SSPC and its 
consolidated subsidiaries as of the dates stated or the 
periods indicated, subject, in the case of unaudited interim 
consolidated financial statements, to normal year-end 
adjustments.  CapStar acknowledges
that under the terms of the SHMC Ground Lease the annual 
lease payment is $1,200,000 and that a portion of the lease 
payment will be credited against the option to purchase 
contained in the SHMC Ground Lease if the option is 
exercised.  Because SHMC expects to exercise the option, 
SSPC has capitalized a portion of the annual lease payment 
and SSPC's Financial Statements reflect lease expense of 
approximately $135,000 for the calendar year 1997.


(b) To Sellers, Knowledge, no Seller has any
Liabilities which are required to be disclosed on a balance 
Sheet under GAAP, other than (i) the Liabilities shown in the 
Financial Statements, (ii) Liabilities disclosed in any of 
the Schedules attached hereto or to the Other Agreement, and 
(ii) Liabilities which have arisen since December 31, 1997 in the 
ordinary 
course of business (none of which relate to any breach of 
contract, tort, or violation of Applicable Law).


Section 5.7 Compliance with Applicable Law. Except 
as disclosed in Schedule 5.7, to Sellers' Knowledge, no Seller
is in violation of any Applicable Law.


Section 5.8 Litigation. Except as disclosed in Schedule 5.8, 
there is no action, suit or proceeding pending 
or, to Sellers' Knowledge, threatened against any Seller, the 
Properties or Safety Harbor in any court or before any 
Governmental Authority which: (i) seeks to enjoin or 
prohibit, or otherwise questions the validity or,, 
enforceability of this Agreement or any action taken or to be 
taken by Sellers in connection with this Agreement, or (ii) 
if adversely determined would have a Material Adverse Effect.


Section 5.9 Insurance. Schedule 5.9 sets forth a
true, correct and complete list and description of each 
insurance policy maintained by any Seller with respect to the 
Properties and Safety Harbor (the "Insurance Policies").  To 
Sellers' 
Knowledge, all of the Insurance Policies are valid and in 
full force and effect.


Section 5.10 Labor and Employment Matters.  To 
Sellers, Knowledge, each Seller has complied in all respects 
with all Applicable Laws relating to employment matters.  
There are no collective bargaining or other labor agreements 
to which any Seller is bound with respect to employees of any 
Seller.


Section 5.11 Taxes. All Taxes imposed upon any Seller
the respect to the Business or the Purchased Assets which 
are payable by the applicable Seller have been paid in 
full and are current. No Seller has received any written 
notice that such Taxes are overdue or have not been paid.  To 
Sellers, Knowledge, each Seller has duly filed all federal, 
state and local tax returns and tax reports required to be 
filed by it under Applicable Law, all such returns and 
reports are true and correct in all material respects and all 
Taxes and other 
charges arising under such returns and reports have been 
fully paid or will be timely paid.


Section 5.12 Environmental Matters. Schedule 
5.12 sets forth a true, correct and complete list of all 
environmental assessments, reports and studies with respect 
to the Land prepared within the last three (3) years by or on 
behalf of, or otherwise in the possession or control of, any 
Seller, and Sellers have delivered or made available to 
CapStar a copy of each such assessment, report and study.  
Except as disclosed in Schedule 5.12, there are no pending 
Environmental Claims, and to Sellers, Knowledge, no 
Environmental Claims are threatened with respect to the Land.


Section 5.13 ERISA. (a) The only "employee 
pension benefit plans", as defined in Section 3 of ERISA, 
maintained by Sellers are those disclosed in Schedule 5.13 
(the "Pension Plans"), and the only "employee welfare benefit 
plans", as defined in Section 3 of ERISA, maintained by any 
Seller are those disclosed in Schedule 5.13 (the "Welfare 
Plans"; the Pension Plans and the Welfare Plans are 
hereafter collectively referred to as the "Plans") .


(b)	Except as disclosed in Schedule 5.13, a 
favorable determination letter has been issued by the 
Internal Revenue Service with respect to the tax-qualified 
status under Section 401(a) of the Code for each Pension 
Plan.  Since the date of the most recent determination 
letter, each Pension Plan has been timely amended to comply 
with all Applicable Laws with respect to such Pension Plan, 
and a request for a new determination letter has been filed 
with the Internal Revenue Service within the time required 
to preserve the rights of the sponsor of such Pension Plan to 
adopt such amendments to such Pension Plan as may be required 
by the Internal Revenue Service in order to secure a 
favorable determination letter with respect to such Pension 
Plan's continued tax-qualified status.


(c)	No Seller has incurred any material liability 
to the Internal Revenue Service, the U.S. Department of 
Labor, the Pension Benefit Guaranty Corporation or any 
participant or former participant with respect to the Plans, 
other than routine claims for benefits.


(d)	Except as disclosed in Schedule 5.13: (i) the 
Plans have been maintained, operated and administered in all 
material respects in accordance with their respective terms 
and the provisions of ERISA and the Code, and (ii) there are 
no accumulated funding deficiencies (as defined in Section 
302 of ERISA and 412 of the Code) with respect to any Plan.


Section 5.14 Permits. Except as disclosed in Schedule
5.14, to Sellers' Knowledge, each Seller holds all Permits
required in conducting its business and operating its 
properties, each of which to Sellers' Knowledge is valid and 
in full force and effect and no provision or condition 
of which has been breached or violated.


Section 5.15 Leases. Schedule 1.2(i) and 
Schedule 1.2(j) set forth a true, correct and complete list of 
the Tenant Leases and Seller Leases, respectively, and 
Sellers have delivered or made available to CapStar a true, 
correct and complete copy of the Tenant Leases and Seller 
Leases, and true, correct and complete sample forms of the 
Condominium Lease Agreements.  No Seller has received any 
written notice of any default under any of the Leases, and to 
Sellers' Knowledge, no event has occurred or circumstance 
exists which, with notice or the passage of time, would 
result in a default thereunder. Schedule 5.15 sets forth a 
true, correct and complete list of the Condominium Lease 
Agreements as of March 31, 1998, including the units covered 
by such Condominium Lease Agreements, the dates such 
Condominium Lease Agreements were entered into and the names 
of the other parties thereto.


Section 5.16 Contracts. Schedule 5.16 sets forth a 
true, correct and complete list of all Equipment Leases 
(indicating therein which Equipment Leases constitute Capital 
Leases) and all Material Contracts in effect as of the date 
hereof, and Sellers have delivered or made available to 
CapStar a true, correct and complete copy of the Equipment 
Leases, Material Contracts, Management Agreements and 
Memberships.  No Seller has received any written notice of 
any default under any of the contracts, and to Sellers, 
Knowledge, no event has occurred or circumstances exist which, 
with notice or the passage of 
time would result	in a default thereunder.  Schedule 5.16 sets 
forth a true, correct and complete list of all Contracts and 
Leases 
that require aggregate remaining payments in excess of Two 
Hundred Thousand Dollars ($200,000) and that require by 
their express terms the consent of the other party thereto in 
connection with the assignment thereof to CapStar as 
contemplated by this Agreement.  CapStar acknowledges that 
only the consents listed as deliveries under Section 9.2 
shall constitute a condition to CapStar's obligations 
hereunder.


Section 5.17 Foreign Person. No Seller is a 
"foreign person" for purposes of the withholding 
provisions of Sections 1445 and 7701 of the Code.


Section 5.18 Finders and Investment Brokers.  
Except for NationsBanc Montgomery Securities LLC, no broker, 
finder or financial adviser has acted directly or indirectly 
as such for Sellers in connection with the transaction 
contemplated by this Agreement, or is entitled to any fee or 
commission in connection with this Agreement or the 
transaction contemplated hereby.


Section 5.20 SHMC Ground Lease. SHMC has 
delivered or made available to CapStar a true, correct and 
complete copy of the SHMC Ground Lease.  No Seller has 
received any written notice of any default under the SHMC 
Ground Lease, and to Sellers, Knowledge, no event has 
occurred or circumstance exists which, with notice or the 
passage of time, would result in a default thereunder.


Section 5.21 Trademarks. Schedule 5.21 sets forth 
a true, correct and complete list of each registered 
trademark, tradename, symbol and logo used by Sellers in 
connection with the Business (the "Proprietary Rights").  
Sellers are the sole and exclusive owners of all right, title 
and interest in and to all Proprietary Rights.  The 
Proprietary Rights do not infringe upon any trademark, 
tradename, symbol or logo of any third party and, to the best 
of Sellers, Knowledge, none of the Proprietary Rights are 
being infringed upon by any person, firm, corporation or 
other legal entity.


Section 5.22 Refurbishment Program at Sundial. 
SSPC has the right, pursuant to the terms of Condominium 
Lease Agreements or the Refurbishment Program Promissory 
Notes Receivable, to offset against rent due and owing 
individual condominium owners under the Condominium Lease 
Agreements the amount of any payment to SSPC under any 
Refurbishment Program Note Receivable (as defined in Section 
12.4(d)) that is not paid to SSPC when the same is due and 
payable.


CAPSTAR ACKNOWLEDGES AND AGREES THAT, SUBJECT TO 
THE PROVISIONS OF THIS AGREEMENT, CAPSTAR IS TAKING THE 
PURCHASED ASSETS AND THE PROPERTIES ON AN AS-IS, WHERE-IS 
BASIS WITH ALL FAULTS AND THAT, EXCEPT AS EXPRESSLY SET FORTH 
IN THIS ARTICLE V, NO SELLER MAKES ANY REPRESENTATION OR 
WARRANTY, EXPRESS OR IMPLIED, OR ARISING BY OPERATION OF LAW 
OR OTHERWISE, INCLUDING, BUT IN NO WAY LIMITED TO, ANY 
WARRANTY OF CONDITION,
MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE AS TO THE
PURCHASED ASSETS AND THE PROPERTIES.  CAPSTAR REPRESENTS 
THAT IT IS ENGAGED IN THE BUSINESS OF HOTEL AND RESORT 
PROPERTIES INVESTMENT, OWNERSHIP AND OPERATION AND AS OF THE 
CLOSING DATE, IT HAS BEEN GIVEN FULL AND COMPLETE ACCESS TO 
THE PURCHASED ASSETS AND THE PROPERTIES FOR ALL INSPECTIONS 
AND REVIEWS THAT IT HAS DESIRED TO CONDUCT IN PERSON AND 
THROUGH THEIR RESPECTIVE AGENTS, EMPLOYEES OR REPRESENTATIVES
AND IT WILL BE FAMILIAR WITH THE PURCHASED ASSETS 
AND THE PROPERTIES AND WILL HAVE MADE SUCH INDEPENDENT 
INVESTIGATIONS AS IT DEEMS NECESSARY OR APPROPRIATE 
CONCERNING THE PURCHASED ASSETS AND THE PROPERTIES.


Each of the representations and warranties 
contained in this Article V and its various subparagraphs are 
intended for the benefit of CapStar and may be waived in 
whole or in part by CapStar, but only by an instrumental in 
writing signed by CapStar.  All rights and remedies arising 
i-n connection with the untruth or inaccuracy of any such 
representations and warranties shall



12

survive the Closing of the transaction contemplated hereby 
for the period set forth in Section 11.1 hereof unless 
CapStar has Knowledge prior to Closing of the untruth or 
inaccuracy of any representation or warranty and CapStar 
nevertheless elects to close this transaction.



ARTICLE VI
CAPSTAR'S REPRESENTATIONS AND WARRANTIES



To induce Sellers to enter into this Agreement and 
to consummate the transaction contemplated hereby, CapStar 
hereby makes the J'-ollowing representations and warranties, 
upon which CapStar acknowledges and agrees that Sellers are 
entitled to rely:



Section 6.1 Organization and Power.  CapStar is 
duly formed or organized (as the case may be), validly 
existing and in good standing or full force and effect in the 
jurisdiction of its formation or organization and is 
qualified to do business in all jurisdictions in which such 
qualification is necessary (except where such failure to 
qualify would not result in a Material Adverse Effect) and 
has all requisite corporate or partnership (as the case may 
be) power and authority to own, lease and operate its 
property and to carry on its business as now being conducted.



Section 6.2 Authoritv and Binding Obliqation.  
CapStar has full corporate or partnership (as the case may 
be) power and authority to execute and deliver this Agreement 
and all documents now or hereafter to be executed and 
delivered by CapStar pursuant to this Agreement and to 
perform all obligations arising under this Agreement and 
under such other documents.  The execution ' ' delivery and 
Derformance of this Agreement by CapStar has been duly and 
validly authorized by all necessary corporate or partnership 
(as the case may be) action on the part oLc CapStar and this 
Agreement has been duly executed and delivered by CapStar.  
This Agreement and such other documents, when executed and 
delivered, will each constitute the legal, valid and binding 
obligations of CapStar, enforceable against CapStar in 
accordance with their respective te=s.



Section 6.3 Consents and A-p-orovals; No 
Conflicts. There is no legal impediment to consummation by 
CapStar of the transaction contemplated by th@-s Agreement, 
and (ii) no filing with, and no pe=it, authorization, consent 
or approval of, any Governmental Authority or other third 
idarty is necessary for the consummation by CapStar of the 
transaction contemplated by this Agreement.  Neither the 
execution and delivery of this Agreement by CapStar, nor the 
consummation by CapStar of the transaction contemplated 
hereby, nor compliance by CapStar with any of the provisions 
hereof will: (i) result in a violation of any provision of 
the organizational or governing documents of Ca,pStar; (ii) 
violate any Applicable Law to which CapStar is



13

subject; or (iii) result in a violation or breach of or 
constiti-,te a default under any contract, agreement, note, 
bond,
mortgage, indenture, license, lease, franchise, permil- or o-
her

L
-

i,nstrumenL-- or obligation to which Ca-oStar is a party or 
by which any of CapStar's properties are boun@.



Section 6.4 Liticration. There is no claim, 
litigation, proceeding or investigation pending, or to 
CapStar's Knowledge, threatened, which seeks to enjoin or 
prohibit, or otherwise questions the validity or 
enforceability of this Agreement or any action taken or to be 
taken by CapStar in connection with this Agreement.



Section 6.5 Finders and Investment Brokers. All 
negotiations relating to this Agreement and the transaction 
contemplated by this Agreement have been carried on without 
the involvement of any person or entity acting on behalf of 
CaiDStar in such a manner as to give rise to any valid claim 
against any Seller for any broker's fee, finder's fee or 
similar compensation.



Each of the representations and warranties 
contained in this Article VI and its various subparagraphs is 
intended for the benefit of Sellers and may be waived in 
whole or in part by Sellers, but only by an instrument in 
writing signed by Sellers.  All rights and remedies arising 
in connection with the untruth or inaccuracy of any such 
representations and warranties shall survive the Closing of 
the transaction contemplated hereby for the period set forth 
in Section 11.1 hereof, unless Sellers have Knowledge prior 
to Closing of the untruth or inaccuracy of any representation 
or warranty, and Sellers nevertheless elect to close this 
transaction.



ARTICLE VII
CONDITIONS PRECEDENT



Section 7.1 Conditions Precedent to the 
Obligations of Both CaDStar and-Sellers. The respective 
obligations o@L Capstar and Sellers hereunder are subject to 
the satisfaction at or prior to the Closing Date of the 
following conditions precedent:



(a)	Adverse Proceedinqs. No preliminary or 
pe=anent injunction or other order, decree or ruling issued 
by a court of co=etent jurisdiction or by a Governmental 
Authority nor any statute, rule, --egulation or executive 
order promulgated or enacted by any Governmental Authority 
shall be in effect which would: (i) make the consummation of 
the transaction contemplated hereby illegal, or (ii) 
otherwise prevent consummation of the transaction 
contemplated hereby.



(b)	Consu=ation of Transaction Contem-Dlated by 
the Other Agreement. The transaction contemplated by the 
Other Agreement shall have been consummated or shall be 
consummated



14

simultaneously with the consummation o'L the transaction
contemplated hereby.



Section 7.2 Additional Conditions As to CapStar's 
OblicTations. CapStar's obligations hereunder are also 
subject to the satisfaction on or prior to the Closing Date 
of the following conditions precedent:



(a)	Sellers' Deliveries. Sellers shall have 
delivered to or for the benefit of CapStar, on or before the 
Closing Date, all of the documents recruited of Sellers 
pursuant to Section 9.2.



 .(b) Representations and Warranties.  All of the 
re7oresent,itions and warranties made in Article V of this 
Agreement shall be true and correct in all material respects 
when made (without taking into account any qualification as 
to Knowledge) and, unless such representation or warranty is 
made as of a specific date, at and as of the Closing Date as 
if made at and as of such time (without taking into account 
any qualification as to Knowledge), and Sellers shall have 
executed and delivered to CapStar a certificate to the 
foregoing effect.



(c)	Covenants and Obliaations. Sellers shall have 
perfo=ed in all material respects all of their covenants and 
other obligations under this Agreement, and Sellers shall 
have executed and delivered to CapStar a certificate to the 
foregoing effect.



(d)	Title Policies. The Title Company shall he 
ready, willing and able to issue the Title Policies insuring 
in CapStar fee simple title to each parcel of Real Property 
with gap coverage from Sellers through the date of recording, 
subjec-L only to the Permitted Title ExceDtions.



(e)	Liauor Licenses. (i) CapStar or its designee 
shall have obtained valid liquor licenses for all Properties 
and Safety -@arbor either (A) through the transfer of 
existing licenses (if pe--missi-ble under Applicable Law) or 
(E) through the Issuance of new licenses, or (ii) Sellers and 
CapStar or its designee shall have entered into an interim 
arrangement allowing CapStar or its designee to sell liquor 
at the Properties and Safety Harbor until licenses are 
obl@ained by CaDStar or its designee.



(f)	Material Adverse Chanue. From the date of 
expiration of the Due Diligence Period, there shall not have 
occurred any materi-al adverse change in the condition of the 
Purchased Assets or the operation of the Properties, except 
for changes due to the seasonal nature of the Business and 
except for any matter that may arise after the expiration of 
the Due Diligence Period under Article X of this Agreement.



is

Each o'L the conditions set forth in this Section 
7.2 is intended for the benefit o@L CapStar; provided, 
however, that if CaDStar consummates the transaction 
contemplated by this Agreement without the benefit of one or 
more of -Lhe foregoing conditions having been satisfied, 
CapStar shall be deemed to have waived any such condition or 
conditions.



Section 7.3 As to Sellers' Obligations.  Each 
Seller's obligations hereunder are subject to the 
satisfaction on or prior to the Closing Date of the following 
conditions precedent:



(a)	CapStar's Deliveries. CapStar shall have 
delivered to or for the hene-fit of Sellers, on or before the 
Closing Date, all of the documents required of CapStar 
pursuant to Section 9.3.



(b)	Representations and Warranties. All of 
representations and warranties made in Article VI of this 
Agreement shall be true and correct in all mal--erial 
respects when made (without taking into account any 
qualification as to Knowledge) and, unless such 
representation or warranty is made as of a specific date, at 
and as of the Closing Date as if made at and as of such time 
(without taking into account any crualif ication as to 
Knowledge), and CapStar shall have executed and delivered to 
Sellers a certificate to the foregoing effect.



(c)	Covenants and OblicTations - CapStar shall 
have performed in all material respects all of its covenants 
and other obligations under this Agreement, and CapStar shall 
have executed and delivered to Sellers a certificate to the 
foregoing effect.



(d)	Receipt of Purchase Price. Sellers shall have 
received the Purchase P--ice, as adjusted pursuant to Article 
XII, and all other sums required to be paid by CapStar 
hereunder.



Each of the conditions set forth i-n this Section 
7.3 is intended for the benefit o@' Sellers; provided, 
however, that if Sellers consummate the transaction 
contemplated by this Agreement without the benefit of one or 
more of the foregoing conditions having been satisfied, 
Sellers shall be deemed to have waived any such condition or 
conditions.



ARTICLE VIII
COVENANTS



Section 8.1 Mutual Covenants.   CaoStar and Sellers
mutually covenant as follows:



(a)	Covenants Against Disclosure; Public 
Anno=cements. CapStar and Sellers shall keep conf idential 
and not disclose to any person or entity the terms, 
conditions and provisions of thi-s Agreement; provided, 
however, that: (i) CapStar and Sellers s,hall make a joint 
public announcement



16

relating to the transaction contemplated hereby 
simultaneously with the announcement o@L the transaction 
contemplated by the other Agreement, (ii) each parl'-y may at 
any time after execu-Lic)n hereof disclose the terms, 
conditions and provisions of this Agreement as required under 
Applicable Law (including, wi--Lhout limitation, SEC Laws), 
and (iii) each party may at any t ime a@ter

L

execution hereof disclose the terms, conditions and -
provisions of this Agreement to persons on a "need to know" 
basis, such as thei-r respective officers, directors, 
employees, attorneys, accountants, engineers, surveyors, 
consultants, lenders, partners, investors, potential lessees 
and bankers and such other third parties whose assistance is 
required in connection with the consummation of this 
transaction.



(b)	Additional Agreements. Subject to the terms 
and conditions provided in this Agreement, CapStar and each 
Seller agrees to use their commercially reasonable efforts to 
take, or cause to be taken, all actions and to do, or cause 
to be done, all things necessary, proper or advisable to 
consummate and make effective as promptly as practicable the 
transaction contemplated by this Agreement and to cooperate 
with one another in connection with the foregoing, including 
using its commercially reasonable efforts to obtain all 
necessary consents, approvals and authorizations as are 
required to be obtained from third parties or under 
Applicable Law, to defend all lawsuits or other legal 
proceedings challenging this Agreemen-L or the consummation 
of the transaction contemplated hereby, to cause to be lifted 
or rescinded any injunction or restraining order or other 
order adversely affecting the ability of the parties to 
consummate the transaction contemplated hereby, and to effect 
all necessary registrations and filings.



(c)	Assiq=ent and Ass=Dtion of Sanibel Ea=-Out 
Aareement. At the Time of Closing, SSPC shall assign and 
deliver to CapSta-- and CapStar shall assume and -Lake from 
SSPC the EarnOut Agreement, dated as of January 1, 1995 (as 
amended by Amendment No. I to the Earn-Out Agreement dated 
October 11, 1996), between Sanibel Resort Hotel Limited 
Partnership and SSPC (the "Earn-Out Agreement'')- SSPC agrees 
to fund an escrow account, with a mutually agreeable escrow 
agent pursuant to the terms of an escrow agreement 
satisfacto--y in form and substance to CapStar and SSPC, in 
the amounl-- of $700,000 (the "Sanibel Escrow Amount").  The 
Sanibel Escrow shall be used to fund the Earn-Out Amount (as 
defined in -L-he Earn-Out Agreement) if and when due and 
Dayable.  SSPC agrees to pay the difference between the Earn-
Out Amount that is due and uayable and the Sanibel Escrow 
Amount.  To the extent the Sanibel Escrow Amount is greater 
than the Earn-Out Amount, the excess shall be refunded to 
SSPC within three (3) days after the payment of the Earn-Out 
Amount to Sanibel Resort Hotel Limited Partnership.



Section 8.2 Covenants of Sellers. Sellers hereby
covenant with CapStar as follows:



17

(a) Continuance of Business; Maintenance of



rrom the date hereof unl--il the Closing Date, Sellers shall 
Operate the Business and main-Lain and OiDerate each Property 
in the Ordinary Course of Business.  Without limiting the 
generality of the foregoing: (i) no Seller will sell, 
exchange, assign, -Lransfer, convey, lease or otherwise 
dispose of all or any part of the Purchased Assets or any 
interesl-- therein except for Fixtures and Tangible Personal 
Property, Consumables and Supply inventories which are sold 
or consumed in the Ordinary Course of Business; (ii) each 
Seller will keep all Contracts, Leases and Permits to which 
it is a party in full force and effect, will pay all charges 
when due under such agreements (unless being contested in 
good fai-th) and will perform all of its obligations under 
such agreements in the Ordinary Course of Business; (iii) no 
Seller will enter into any material contracts, licenses, 
easements or other agreements relating to the Purchased 
Assets which will obligate CapStar or be a charge or lien 
against the Purchased Assets, except those that will be 
discharged on or before the Closing Date, those entered into 
in the Ordinary Course of Business which are necessary to 
continue the operations of the Properties and Safety Harbor 
in the ordinary Course of Business or -Lhose which are 
terminable without penalty on sixty (60) days' notice; (iv) 
each Seller will cause its respective Property to be operated 
and maintained in the manner in which it is being operated 
and maintained as of the date of this Agreement, which 
undertaking includes, but is not limited to, maintaining 
Fixtures and Tangible Personal Property, Consumables and 
Suvply Inventories in those quantities and at those levels 
present as of the date of this Agreement (subject to normal 
adjustments to take into account the seasonal nature of the 
Business) and entering into bookings in the Ordinary Course 
of Business; (v) SSPC will Dromptly notify CapStar o'L any 
matter arising Drior to the Closing which could reasonably be 
expected to have a Material Adverse Effect (including, 
without limitation, the commencement o'L any litigation or 
Droceeding or any notice of a violation of AiDplicable Laws 
issued @y any governmental or quasi-governmental authority; 
(vi) SSPC will promptly notify CapStar of any actual or 
Droposed change in the assessed value of the ProDerties or 
any portion of the Properties (including any tentative or 
preliminary assessment) and of the institution or proposed 
institution of any pr I oceeding (whether formal, informal, 
judicial or administrative) relal-ing to any such change or 
proposed change; and (vi-i) no Seller will take any action 
with respecl- to the contesting or resolution of the taxable 
assessed value of the Land and Imorovements without the pr@or 
written consent of CaDStar, whic@ consent shall not be 
unreasonably withheld.



(b)	Licruor Licenses.  Sellers shall use all 
reasonable efforts -Lo cause to be -Lransferred to CapStar or 
its designee, all liquor licenses and alcoholic beverages 
licenses currently i-n use i-n connection with the Business 
and operation of the Properties and Safe-Ly Harbor.  To that 
end, Sellers and CapStar



18

shall cooperate each wi-th the other, and each shall execute 
such transfer forms, license apvli-caL--i-ons and other 
documents as may be necessary to effect such trans@Ler.  If 
permitted under Applicable Law, the narties shall execute and 
file all necessary applications and papers wik--h the a-
oproldriate liquor and alcoholic beverage authorities prior 
to the Closing, to the end that the issuance of new licenses 
shall take effect, if possible, on the Closing Date, 
simultaneously with Closing.  If not so permitted, then the 
parties agree each with the other that they will promptly 
execute all aD'Dlications and other documents required by the 
liquor authorities in order to effect the issuance of new, 
licenses at the earliest da-Le possible consistent with 
Applicable Law in order that all liquor licenses may be 
issued to Ca-oStar or its designee at the earliest possible 
time.  If under Applicable Law the new licenses cannot be 
issued until after the Closing of the transaction 
contemplated hereby, then Sellers covenant and agree that 
they will use reasonable efforts to enable CapStar to keet) 
the bars and lounges and liquor facilities at the Im-
orovements open between the Closing Date and the time when 
the new liquor licenses actually become effective, by 
exercising management and supervision of such facilities 
under the existing licenses under a management agreement to 
be executed between Sellers and CaoStar (or its designee) in 
a form reasonably agreed to between Sellers and cavstar, 
until such time as new liquor licenses can be issued (but in 
no event longer than six (6) months from the Clos@-ng Date); 
provided, however, that CapS,--ar shall indemnify and hold 
Sellers harmless from any liabilities, damages, claims, dosts 
or expenses (including reasonable attorneys, fees) 
encountered in connection with such operations during said 
period of time and CapStar shall maintain commercial general 
liability insurance (including dram shop liability) i,-l the 
amount of Ten Mi-llion Dollars ($10,000,000) in favor of 
Sellers.  The provisions ci@ this Section 8.2(b) shall 
survive the Closing.



(c) Employee Matters '. The employment of the Employees
shall be terminated by SSRC and S.@C at the Time of Closing.



(d)	Capital improvement Projects. In connection 
with any Projec-L- CaiDital Expenditure undertaken by any 
Seller after the date of execution of this Agreement, each 
Seller agrees as .Lollows: to submit plans and specifications 
therefor to CapStar for its review and approval (which 
aDDroval shall not he unreasonably withheld or delayed); (ii) 
to complete such projects in accordance with the plans and 
specifications therefor; (iii) to complete such projects in a 
good and workmanlike manner, in timely fashion and usi-ng 
good materials; and (iv) to complete such projects in 
accordance with all A-oDlicable Laws.  At the Time of 
Closing, Sellers shall deliver to CapStar a report detailing 
each Project Capital ExDenditure undertaken by Sellers, the 
work comnleted i-n connection with each Project Capital 
Expenditure, the amount spent (or committed to be spen-) in 
connection with each Project CaDital Expenditure and the 
work, if



19

any, needed to be comvieted in connection with each Project
Canital Expendi-ture.



Section 8.3 Covenants of CaT)Star.   CaDStar hereby
covenants with Sellers as 'Lollows:



(a)	Confidential Info=ation. Neither CapStar nor 
any of its agents or representatives shall use for their own 
bene'Lit (exce,ot in connection with this transaction and as 
required by SEC Laws) and shall hold in stric-L confidence 
and not disclose any data and information relating to the 
financial statements,-
conditions and	operations of Sellers that is confidential 
in
nature and not	generally known to the public (the 
"Confidential
Inf o=a-Li-on"). 	If the transaction contemplated by this 
Agreement
is not consummated for any reason, CapStar shall return to 
Sellers within five (5) business days of the termination of 
this Agreement for any reason all data, information and any 
other written material obtained by CapS-Lar or its agents and 
representatives from Sellers in connection with this 
transaction and any copies, summaries or extracts thereof, 
and except as noted herein, shall refrain from disclosing any 
of the Confidential Information -Lo any third party or using 
any of the Confidential Info=ati-on 'Lor its own benefit or 
that of any other person or entity.  This Section 8.3(a) 
shall survive termination of this Agreement.



(b)	7-mployee Matters.  On the Closing Date, 
CapStar
shall:	(i) offer Initial employment to all Management 
Level Em@loyees; provided, that CapStar may at any time prior 
to June 1, 1998, designate in writing to SSPC up to ten (10) 
Management Level EmDloyees that CapStar shall not be required 
to offer employment; and (ii) offer initial employment to 
such other EmDloyees as CaDStar so desires; provided, 
however, that CaDStar shall o'Lfer e=@-oyment to a sufficient 
number of such otherEmvloyees to prevent Sellers from 
incurring liability under the Worker AdjusL-ment and 
Retraining Notification Act, 29 U.S.C. 2101 et sea (the "WARN 
Act"), and CapStar shall indemnify and hold @ar;l-ess Sellers 
@Lrom and against any claims, penalties, damages, losses, 
liabilities and expenses incurred by Sellers under the WARN 
Act.  The Management Level Employees and the other Employees 
who accept such offers of employment by CaDStar are re'Lerred 
to herein as the "Transferred Emoloyees".  Subject to the 
penultimate sentence of this Section 8.3(h), L-he parties 
acknowledge tha-L- all Transferred Employees shall be subject 
to such te=s and conditions of employmen-L- as CapSL--ar may 
set or establish, including, but not limited to, such matters 
as wages, hours and working conditions.  The Transferred 
Employees shall receive credit -Lcrom Ca-oStar for years of 
service (time worked) with Sellers for all vurposes 
(including, without limitation, compensation, vacation, 
severance, options, bonuses and all pension or welfare plans 
of CaDSta--)- Notwithstanding any Drovision of this Section 
8.3(b) to the contrary, CaDStar agrees that for the one year 
period commencing on the Closing Date all



2 0

Management Level Employees whose employment is te--mi-nated 
by CapStar without cause shall be paid one week of severance 
pay for each year ol-@ credited service such Em-oloyee has 
with Sellers and CapStar or any a@'filiate of CapStar.  The 
provisions of this Section 8.3(h) shall survive the Closing.



(c)	Prolect Car>ital Exmenditures.  CapStar 
acknowledges that it has received Sellers' proposed list of 
Project Capital Expenditures in connection with its due 
diligence e'Lforts.  Promptly after execution of this 
Agreement (but in any event within 20 days after execution of 
this Agreement), CanStar shall evaluate all proposed Project 
Capital Expenditures of Sellers L--o determine a final scope 
and schedule for the Project CaDital Expenditures.  If 
Sellers undertake any Project Capital Expenditures that have 
been approved by CapStar ("A-oproved ProjecL-- Capital 
Expenditures"), the Purchase Price shall be increased, as 
contemplated by Section 12.4 hereof, by the amount spent by 
Sellers on the Approved Project Capital Ex-oenditures.  If 
CapStar does not aidvrove a Project Capital Ex-oen@iture, 
Sellers shall be under no obligation -Lo undertake such 
Projec-L Ca-oital Ex-oenditure.  If CapStar fails to 
undertake its evaluation of the Project Capital ExiDenditures 
as required under this Section 8.3(c) and deliver to SSPC its 
determination of the final scope and schedule for the Project 
Capital Expenditures within the time period set forth i-h 
thi-s Section 8.3(h), CapStar shall be deemed to have 
approved all the Project Capital Expenditures submitted to 
CapStar.



ARTICLE IX
CLOSING



Section 9.1 Closincr.  The Closi-ng shall occur 
simultaneously with the closing ol-@ the transaction 
contemplated .by this Other Agreement.  As more particularly 
described below, at the Clos@-ng L--he parties will meet: (i) 
to execute all of the documents required to be delivered in 
connection with the transaction contemplated hereby (the 
"Closing Documents,,); (ii) initiate the wire transfer of the 
Purchase Price; and (iii) take all other action required by 
this Agreement to be taken in order to consummate the 
transaction contemplated by this Agreement (the "Closing").  
The Closing shall take Dlace at the Corporate Offices, or at 
any other place to which SSPC and CapStar may mutually agree 
prior to the Closing Date.  The Doint in time at which L-he 
Closing shall have been consummated is referred to herein as 
the "Ti-me of Closing.,,



Section 9.2 Sellers' Deliveries. At the Closing, 
each Seller (as indicated below) shall deliver to CapStar all 
of the following instruments, each of which shall have been 
duly executed and, where a-Dvlicable, acknowledged and/or 
sworn on behalf o4L such Seller and, except as otherwise 
noted, shall be dated as of the Closing Date:



2 1

(a)	The certificates required by Section 7.2(b) 
and
(c) hereo-Lc.



(b)	Appror)riate resolutions of the shareholders 
or board of directors (!or corporate Sellers), and the 
general partner (for partnership Sellers) authorizing this 
transaction, toge-Lher with all other necessary approvals and 
consents of Sellers and such documentary and other evidence 
as may be reasonably required by CapStar authorizing and 
evidencing the authorization o'L (i) the execution on behalf 
of Sellers of this Aareement and the authority of the person 
or persons who are executing the Closing Documents to be 
executed and delivered by Sellers prior to, at or otherwise 
in connection with the Closing, and (ii) the performance by 
Sellers of their obligations hereunder and under the Closing 
Documents.



(c)	All Deeds and Conveyance Documents necessary 
to transfer title to the Purchased Assets to CapStar as 
contemplated by the terms of this Agreement and as reasonably 
requested by Ca,oStar.



(d)	A consent from the landlord under each of the 
Seller Leases, in form and substance reasonably satisfactory 
to CapStar, if required by the terms of the Seller Leases.



(e) A Termination of Management Agreement in form and
substance reasonably satisfactory to CapStar.



(f)	Such agreements, affidavits or other 
documents as may be reasonably required by the Title Company 
to Issue the Title Policies.



(g) A FIRPT-K affidavit in the form set forth in the
regulations under Section 1445 of the Code.



(h)	All current real estate and -Dersonal 
property -Lax bills relating to the Properties and Safety 
Harbor in Sellers, possession.



(i)	All originals (or copies if orig- inals are 
not available) of the Books and Records, Customer and 
Marketing information, Pe=its, Property ReDorts, and all 
other documents and records relating to the Business or any 
Property in the possession or conl--rol of Sellers, which 
shall be deemed to be delivered upon delivery o'L possession 
of the ProDerL-ies, the Corporate Of@Lice and Safety F@arbor.



(j)	A payoff letter from each lessor under each 
Capi-tal Lease indicating all amounts due and owing in order 
to fully discharge and payoff as of the Time of Closing such 
CaDital Lease.



22

(k)	Such other and further documents and 
instruments as may he reasonably requested by CapStar or its 
counsel @-n order to better effectuate the purposes of this 
Agreement.



Secti-on 9.3 ' Ca-oStar's Deliveries. At the 
Closing, CapStar shall deliver to Sellers the Purchase Price 
(by wire transfer of immediately available funds to an 
account designated by Sellers) and all other sums required to 
be paid by CapStar hereunder, and all of the following 
instruments, each of which shall have been duly executed and, 
where applicable, acknowledged and/or sworn on behalf of 
CapStar, and, except as otherwise I noted, shall be dated as 
of the Closing Date:



(a) The certificates required by Section 7.3(]D) and



(c)

(b)	Appronriate resolutions of the Board of 
Directors or other governing body of CapStar and such 
documentary and other evidence as may be reasonably required 
by Sellers authorizing and evidencing the authorization of 
(i) the execution on behalf of CapStar of this Agreement and 
the authority of the person or persons who are executing the 
various documents to be executed and delivered by CapStar 
prior to, at or otherwise in connection with the Closing, 
and (ii) the performance by CapStar of its obligations 
hereunder and under such documents.



(c)	A counterpart of each of the agreements to be 
delivered by Sellers under Section 9.2 which require 
execution by CapStar.



(d)	Such other and further documents and 
instruments as may be reasonably requested by Sellers or 
their counsel in order to better e--Ffectuate the purposes 
o'L this Agreement.



Section 9.4 Possession. Sellers shall deliver
-Dossession of the Purchased Assets at the Closing.



ARTICLE X
CONDEMNATION; DAMAGE OR DESTRUCTION



Secti-on 10.1 Condemnation. In the event of any 
actual or threatened L--aking, pursuant to the power of 
eminent domain, of all or any porL--i-on of the Real 
Property, or any proposed sale in lieu thereof, SSPC shall 
give writtet-i notice thereof to CapStar pro=tly after SSPC 
receives nol-ice thereof.  If all or more than twenty percent 
(2o-.), by value, of Sundi-al, Seaside Inn ' or Sanibel Inn, 
taken individually, is, or is to be, so condemned or sold, 
CapStar shall have the right to terminate this Agreement.  If 
CapStar elects not to terminate this Agreement, all proceeds, 
awards and other payments arising out of such condemnation or 
sale (acL--ual or threatened) shall be paid or assigned, as 
applicable, to CapStar at Closing.  If CaDStar elects to 
terminate this Agreement by giving Sellers written notice L--
hereo'L



23

prior to the Closing, all rights and obligations o-L Sellers 
and CapStar hereunder (except those rights and obligations 
set forth herei-n which expressly survive a L--ermination of 
this Agreement) shall terminate immediately.



Section 10.2 Damage or Destruction.

(a)	If, after expiration of the Due Diligence 
Period but prior to Closing, there shall occur any uninsured 
damage or destruction to the ProDerty in excess of twenty 
percent (20'-.) , by value, of Sundial, Seaside Inn or 
Sanibel Inn, taken individually, or that would require longer 
than three hundred sixty-five (365) days to repair, CapStar 
shall have the option, in its sole judgment and discretion, 
(i) to terminate this Agreement, or (ii) to proceed with 
Closing without any adjustment in the Purchase Price, in 
which event, at Closing, Sellers shall transfer and assign to 
CapStar all of Sellers' right, title and interest in and to 
all proceeds from all insurance policies owned by Sellers 
with respect to the Purchased Assets for such damage or 
destruction, provided that any existing mortgagees having 
approval or similar rights relating to application of 
insurance proceeds have agreed that the insurance proceeds 
may he transferred and assigned to CapStar.  If CapStar 
elects to proceed with Closing, and, as of the Closing Date, 
the existing mortga ees have no . t agreed that the insurance 
proceeds may be transferred and assigned to CaDStar, then, in 
such event, the insurance proceeds shall be trans'Lerred and 
assigned by Sellers to Ca-oStar as soon as practicable after 
Closing.  If CapStar elects to terminate this Agreement, 
CapStar shall give written notice thereof to Sellers on or 
before the earlier to occur of (A) ten (10) days after 
CapStar shall have received written notice of such damage or 
destruction, or (B) the Closing Date.  If CapStar does not 
give such notice within such time, CapStar shall he 
conclusively deemed to have elected to @roceed with Closing, 
and shall not have any further right to terminate this 
Agreement as a result of such damage or destruction.  Upon 
any te=ination o'L this Agreement under this Section 10.2(a), 
all rights and obligations of Sellers and CapStar hereunder 
(except those rights and obligations set forth herein which 
expressly survive a te=ination of this Agreement) shall 
te=inate immediately.



(b)	If, prior to Closing, there shall occur any 
damage or destructi-oi-i -Lo the ProDerty that would require 
less than
twenty Dercent (20%), by value, of Sund@al, Seaside Inn ' or 
Sani-bel Inn, taken individually, and take not longer than 
three hundred sixty-five (365) days to repair, CapStar shall 
not have the option to L--erminate this Agreement, but 
Closing shall proceed pursuant to Section 10.2(a)(ii) unless 
Sellers, insurance company has in good fai-th denied coverage 
and SSPC is unwilling to pay for the cost (or estimated cost) 
to repair or restore the damaged ProperL@-y through a 
reduction in the Purchase Price.  I'L Sellers' insurance 
company denies coverage and SSPC is unwilling to pay



24

for the cost (or estimated cost) to renair or restore the 
damaged Pro-oerty through a reduct@-on in L--he Purchase 
Price, CapStar may elect to te--Mi-nate th-Ls Agreemen-L by 
gi-ving Sellers written notice thereof prior l'o the Clos@-ng 
and all rights and obligations of Sellers and CapStar 
hereunder (excent those rights and obligations set forth 
herein which expressly survive a termination of this 
Agreement) shall terminate immediately.  CapStar acknowledges 
that Sellers make no representation or warranty as to the 
amount of any insurance policy proceeds, if any, that will be 
available to CaDStar in the event ocL a Closing pursuant to 
Section 10.2(a)(ii) or this Section 10.2(h). If Sellers' 
insurance company denies coverage and SSPC pays for the cost 
or estimated cost to repair or restore the damaged Property 
through a reduction in the Purchase Price, SSPC shall be 
entitled to collecl-- and receive any insurance proceeds 
ultimately dete=ined to be due and ow@-ng by Sellers, 
insurance company in respect of such c'Lamage.



Section 10.3 Inability to Deliver SHMC Ground Lease. If SHMC is 
unable to deliver at the Time of Closing the consent of the 
ground lessor under the SHMC Ground Lease (the "Ground Lessor") 
and the Grand Lessor's lender to the assignment of the SHMC 
Ground Lease to CapStar, then CapStar shall be entitled to 
eliminate from this Agreement the SHMC Ground Lease and the SHMC 
Land and the Purchase Price shall be reduced by $5,150,000. 
CapStar shall not be entitled to eliminate the SHMC Ground Lease 
unless it also eliminates the SHMC Land. CapStar shall not have 
the right to eliminate the SHMC Ground Lease from this Agreement 
solely as a result of the consent of the Ground Lessor to the 
assignment of the Ground Lease to CapStar being conditioned upon 
the restructuring of the earn-out provisions of the SHMC Ground 
Lease (the "SHMC Ground Lease Earn-Out"). The Purchase Price will 
be adjusted as follows: (i) if the present value of the SHMC 
Ground Lease Earn-Out (after obtaining such consent) is in excess 
of Seven Million Dollars ($7,000,000), the Purchase Price shall 
be reduced by the amount of such excess, or (ii) if the present 
value of the SHMC Ground Lease Earn-Out (after obtaining such 
consent) is less than or equal to Seven Million Dollars 
($7,000,000), the Purchase Price shall be increased by fifty 
percent (50%) of the difference between Seven Million Dollars 
($7,000,000) and such present value of the SHMC Ground Lease 
Earn-Out. For purposes of the preceding sentence the following 
shall apply: (x) the present value of the SHMC Ground Lease Earn-
Out shall be determined using a May 1, 2000, valuation date and a 
ten percent (10%) discount rate, and (y) if the SHMC Ground Lease 
Earn-Out (after obtaining such consent) is based upon the net 
operating income of Safety Harbor for periods not yet completed, 
the parties shall use commercially reasonable efforts to agree 
upon pro-forma financial statements for the basis of determining 
such net operating income for purposes of the present value 
computation of the SHMC Ground Lease Earn-Out (after obtaining 
such consent). If the parties can not agree under clause (y) of 
the preceding sentence, the parties will appoint a mutually 
agreed upon expert to determine the pro-forma net operating 
income. The determination of such expert shall be final and non-
appealable and the fees and expenses of such expert shall be 
divided equally between SSPC and CapStar. 

Section 10.4 Inabilitv to Deliver Pink Shell

Management AcTreement or Pink Shell Lease. If: (a) SSRC is 
unable to deliver at the Time of Closing the consent of the 
owner of the Pink Shell to the assignment of the Pink Shell 
Management Agreement, (ii) if the transaction contemplated by 
the Pink Shell Purchase Agreement is consummated Drior to 
consummation of thi's transaction and if SSEI is unable to 
deliver the consent o-P Boykin Hotel Properties, L.P. 
("]Boykin") to an assignment of the Pink Shell Lease (which 
consent shall include Boykin's agreement to amend the non-
economic provisions of the Pink Shell Lease to con.Lorm the 
Pink Shell Lease in all material respects to the form of 
Percentage Lease Agreement customarily entered into between 
Boykin and CaDStar's Affiliates), then CapStar shall be 
entitled to eliminate irom this Agreement the Pink Shell 
Management Agreement or the Pink Shell Lease, as the case may 
be, and the Purchase Price shall be reduced by $2,500,000, or 
(iii) if the transactions contemplated by -Lhis Agreement are 
consummated prior to consummation of the transactions 
contemplated by the Pink Shell Purchase Agreement and if upon 
the consummation of the transactions contemplated by the Pink 
Shell Purchase Agreement SSEI is unable to deliver the 
consent of Boykin to an assignment of the Pink Shell Lease 
(which consent shall include Boykin's agreement to amend the 
non-economic provisions of the Pink Shell Lease to conform 
the Pink Shell Lease in all material respects to the form of 
Percentage Lease Agreement customarily entered into between 
Boykin and CapStar, s Af f iliates) , then CapStar shall be 
entitled to eliminate 'Lrom this Agreement the Pink Shell 
Management Agreement and shall be entitled to a payment from 
SSEI in the amount of $2,500,000.



Section 10.5 .Inability to Deliver any Other 
Propert-y.  Subjec-L to the provisions of Section 10.1 and 
Section 10.2 hereof, if: (i)-Sellers are unable to deliver to 
CapStar title to any ProDerty as required by the terms of 
this Agreement (other than the SHMC Ground Lease or the Pink 
Shell Management Agreement or Pink Shell Lease, which shall 
be governed by the provisions of Sections 10.3 and 10.4, 
respectively), or (ii) any of the representations and 
warranties of Sellers set forth in Article V hereof shall at 
the Time of Closing be untrue in any mal@-erial respect with 
resvect to a particular Proper-Ly, or (iii) Sellers are 
unable to deliver any ProDerty by reason oz- any 
condemnation, damage or destruction with respect to a 
particular Property that would allow CapStar to te=inate this 
Agreement under Sections 10.1 or 10.2, then CapStar shall be 
entitled to eliminate from this Agreement the Property or 
ProDerties so affected and the Purchase Price shall be 
adjusted by deducting the amount or amounts shown in Exhibit 
B for the Property or Properties to be eliminated.  If the 
Purchase Price declines below $19,000,000 as



2 Do

a result of the elimination o'L Properties, Sellers may 
terminate L-his Agreement by wr@-tten notice to CapStar de!4-
vered at any time after the elimination of the Property or 
Properties which resul-Ls in the Purchase Price declining 
below such amount.
Notwithstanding Section 8.3(b), if a Pro-.oerty is eliminated 
pursuant to this Section 10.3, CapStar's obligations under 
Section 8.3(b) and Sellers' obligations under Section 8.2(c) 
shall cease and terminate with respect to the EmDloyees of 
Sellers relating to the Pro-oerty eliminated under this 
Section 10.3.



ARTICLE XI
SURVIVAL OF REPRESENTATIONS AND WARRANTIES; INDEMNIFICATION;
TERMINATION RIGHTS



Section 11.1 Survival of Rer>resentations and 
Warranties. The represe ntations and warranties of Sellers 
and CapStar shall survive the Closing for a period of one (1) 
year commencing on the Closing Date (the "Indemnity 
ExpiraLion Date").  To the extent any Indemnitee i-s seeking 
indemni@Lication, the Indemnitee shall be entitled to 
indemnity only for those matters as to which the Indemnitee 
has given written notice thereof to the other party prior to 
the expiration of the one (1) year period commencing on the 
Closing Date.



Section 11.2 Indemnification by Ca-ostar. CaDStar 
hereby indemnities and holds Sellers, their partners, -L@eir 
respective Affiliates and the officers, directors, employees, 
agents, advisers and representatives of each of -Lhe 
foregoing (individually, a "Seller IndemT-iitee", and 
collectively, the "Seller Indemnitees") harmless from and 
against any and all claims, costs, penalties, damages, 
losses, liabilities and expenses (including reasonable 
attorneys' fees) (individually, an "Indemni-i'-ication Loss", 
and collectively, the "Indemnification Losses") that may at 
any time be incurred by any Seller Indemnitee, whether before 
or after Closing, as a result of: (i) any inaccuracy or 
breach by CaDStar of any of its reldresentations, warranties, 
covenants or obligations set forth herein, (ii) the non-
payment or nonperformance of any Assumed Liabilities, and 
(iii) the conduct of the Business after the Closing Date.



Section 11.3 Inde=ification by Sellers. Sellers 
hereby jointly and severally indemnify and hold Ca-oStar, its 
partners, their respective Af@Liliates and the o@Lficers, 
directors, employees, agenl-s, advisers and representatives 
of each sucn person (individually, a "Purchaser IndemniL--
ee", and collectively, the "Purchaser Indemnitees") ha=less 
from and against any and all claims, costs, Denalties, 
damages, losses, liabilities and e)menses (including 
reasonable attorneys' fees) (individually, an 
!'Indemnification Loss", and collectively, the "Indemn4-
fication Losses") that may at any time be incurred by any 
Purchaser Indemnitee, whether before or after Closing, as a



27

result of: (i) any inaccuracy or breach by Sellers of any of 
the representations, warranties, covenants or obligations set 
forth herei-n (except for any breach or inaccuracy of any 
renresentat@on or warranty as to which CaoStar had Knowledge 
prior to the Closing and nevertheless elected to consummate 
the Closing), and (ii) Sellers, failure to timely discharge 
or satisfy any Excluded Liabilities.  Sellers' obligations 
under this Section 11.3 with respect to indemnity under 
clause (i) hereof shall terminate on the one year anniversary 
of the Closing Date and on the second year anniversary of the 
Closing Date with respect to indemnity under clause (ii) 
hereof.



Section 11.4 Limitations on Inde=ification.

(a)	Notwithstanding anything in Section 11.3 
hereof to the contrary, to the extent indemnification is 
sought by any Purchaser Indemnitee under clause (i) of 
Section 11.3 hereof or under clause (i) of Section 11.3 of 
the Other Agreement, Sellers shall be recruited (-o provide 
indemnification only to the extent the aggregal-- Z@ amount 
of all Indemnification Losses under clause
(i)	of Section 11.3 of this Agreement and clause (i) of 
Section
11.3	of the Other Agreement exceed Seven Hundred Fif-Ly 
Thousand
Dollars ($750,000) and not for any amounts up thereto (the
"Indemnity Deductible").  Indemnification under clause (ii) 
of
Section 11.3 hereof shall not be subject to the Indemnity
Deductible.



(b)	Notwithstanding anything in Section 11.3 
hereof to the contrary, the maximum amount payable for 
indemnification under clause (i) of Section 11.3 hereof and 
under clause (i) of Section 11.3 of the Other Agreement shall 
not in the aggregate exceed Seven Million Five Hundred 
Thousand Dollars ($7,500,000) and the maximum amount payable 
by Sellers for all claims for indemnification under Section 
11-3 hereof and under Section 11.3 of the Other Agreement 
shall -iot in the aggregate exceed Ten Millio'n Dollars 
($10,000,000).



(c)	The amount of any Indemnification Loss for 
which indemnification is provided under this Article XI shall 
be net of any tax bene@@its or insurance proceeds actually 
realized by the indemnified party as a result thereof.



Section 11-5 Indenmification Procedure. In the 
case of any claim asserted by a third party against a party 
entitled to inde@-ii@Licati-on under this AgreemenL- (the 
"Indemni--Fied Party"), notice shall be given by the 
Indemnified Party to the party required to provide 
indemnification (the "Indemnifying Party") promptly after 
such indemnified Party has actual knowledge of any claim as 
L--o which indemnification may be sought, and the Indemnifi-
ed Party shall Dermit the Indemnifying Party (at the expense 
of the Indemnii-ying Party) to assume the defense of any 
claim or any litigation resulting therefrom; provided, that
(i)	the counsel for the Indemnifying ParL-y who shall 
conduct the



2 8

defense of the claim or litigation shall be reasonably 
satisfactory to the Indemni@Lied Party, (ii) -L-he 
indemnified Party may participate in the defense at the 
indem-Tii@Lied Party's expense, a.-Lad (@-ii) the failure by 
any Indemnified Patty to give notice as provided herein shall 
not relieve the indemnifying Party of its indemnification 
obligation under this Agreement, except to the extent that 
such omission resull--s in a failure of actual notice to the 
indemnifying Party and such Indemnifying ParL--y is 
materially damaged as a result of such failure to give 
notice.



Section 11.6 ' Exclusive Remedy. Subject to 
Section 11.7 below, the indemnification provisions of this 
Article Xi shall be the sole and exclusive remedy of the 
Seller-Indemnitees and the Purchaser indemnitees with respect 
to any claim for moneta--y relief based upon or arising out 
of this Agreement.



Section 11.7 Te=ination by Ca-PStar. If Sellers 
default in any material respect in the performance of any o@ 
their obligations hereunder and if Sellers fail to cure that 
L default within ten (10) business days after notice thereo' 
from CapStar (or such other time period as may be explicitly 
provided for herein), CapSL-ar, shall have the right to 
exercise any and all legal and equitable remedi-es which 
CapStar may have against Sellers, including, without 
limitation, the right to require that Sellers specifically 
pe.rform their respective obligations under this Agreement.



Section 11.8 Te=ination by Sellers. If CapStar 
defaults in any material respect in the perfo=ance of any of 
their obligations hereunder and if CapStar fails to cure that 
defaull-- within ten (10) business days after nol--ice 
thereof from Sellers (or such other time period as may be 
explicitly provided for herein), Sellers may ei-ther: (i) 
te=inate this Agreement in which all rights and obligations 
of Sellers and CapStar hereunder (except those rights and 
obligations set forth herein which expressly survive a 
termination of this Agreement) shall te=inate immediately, or 
(ii) proceed to Closing.



Section 11.9 ' Te=ination by Either Sellers or a-
DStar.If the Closing shall not- have occurred before November 
1, 1998, any party hereto may elect to te=inate this 
Agreement, in which event all rights and obligations of 
Sellers and CapStar hereunde-(excevt those rights and 
obligations set forth herein which exvressly survive a te--
mination of this Agreement) shall L-e=inate immediately.  In 
connection with any such termination, each party shall pay 
its own costs and expenses incurred in connection wil--h -Lhe 
transaction contemplated hereby.



29

ARTICLE XII
PRORA-TIONS; TRANSACTION COSTS AND ADJUSTMENTS



SecL--ion 12.1 Prorations.  The follow@-ng matters 
and items pe--tainina to th-- Business and each Property 
shall be apportioned between Sellers, on the one hand, and 
CapStar, on the other hand or, where applicable, credited in 
total to Sellers or CapStar, as of midniaht on L-he day 
preceding the Closing Date (the "Cutoff Time").  Ne'L credits 
in favor of CapStar shall he deducted from the Purchase Price 
and net credits in favor of Sellers shall be added to the 
Purchase Price.  Unless otherwise indicated below, CapStar 
shall receive a credit for any of the following items to the 
extenl-- the same are accrued but unpaid as of the Cutoff 
Time (whether or not due, owing or delinquent as of the 
Cuto'L--F Time), and Sellers shall receive a credit to the 
extent any of the following items shall have been paid prior 
to the Closing Date to the extent the payment thereof relates 
to any peri-od of time after the Cutoff Time:



(a)	All Taxes (other than federal, state, local 
and foreign income, capital stock, windfall profits and 
franchise taxes) shall be prorated as of the CuL--off Time 
between CapStar and Sellers.  Sellers shall be charged with 
such Taxes accrued or payable as of the Cutoff Time, which 
shall be credited to CapStar as a reduction of L--he Purchase 
Price.  If the amount of any such item is not ascertainable 
on the Closing Date, the credit therefor shall be based on 
the most recent available bill and adjusted as necessary 
post-closing, as contemplated in Section 12.3.



(b)	Any amounts -oredaid, accrued or Dayable 
under the IndenL--ure shall be prorate@ as of the Cutoff Time 
between CapStar and Sellers.  All amounl--s accrued or 
payable under the Indenture with reference to periods vrior 
to the Closing Date shall be credited to CapStar as a 
reduction of 1-he Purchase Price.  All amounts paid under the 
Indenture with reference to periods after the Closing Date 
shall be added to the Purchase Price.



(c)	Any amounts prepaid, accrued or due and 
payable under the Contracts (including any deposits payable 
thereunder, .but excluding any Contracts for utilities which 
proration is addressed separately in Section 12.1(i)) shall 
he prorated as o'L the Cutoff Time between CapStar and 
Sellers.  All amounts accrued or payable under the Co-
ritracts with re--@erence to periods prior to L--he Clos@-ng 
DaL--e shall be credited to CapSL--ar as a reduction of the 
Purchase Price.  All amounts Daid under the Contracts with 
reference to ueriods after the Closing Date shall he added to 
the Purchase Price- Notwithstanding the foregoing, Sellers 
shall pay off at or prior to Closing all Equipment Leases 
which are treated as capital leases (as oidposed to o-oeraL-
i-ng leases) under GAAP, including, without limitations the 
Equipment Leases with respect to the computer, televhone and 
reservations systems and equipment used at the Vacation 
Planning Cent-er.



3 0

(d)	Any amounts prepaid, accrued or due and 
Dayable under the Leases (including any deposits payable 
thereunder) shall be vrorated as of the Cuto'Lf Time between 
CapStar and Sellers.  All amounts accrued or Dayable under 
the Leases with reference to Deri-ods prior to the Closing 
Date shall be credited to CapStar as a reduction of the 
Purchase Price.  All amounts vaid under the Leases with 
reference to periods after the Closing bate shall be added to 
the Purchase Price.



(e)	Any ComiDensation for the following specific 
items:
direct salaries an@ wages; (ii) incentive compensation; 
(iii) employer's contributions under the Federal Insurance 
Contribution Act, unemployment compensation and other 
employment taxes; (iv) accrued vacation -may with respect to 
the Transferred Employees (A) which are due and Dayable at 
Clos@ng, or (E) with respect to which the right to receive 
such Compensation first arises or accrues prior to Closing 
(without regard to when such Compensati-on i-s paid or 
becomes due and payable) shall he prorated as of the Cutoff 
Time between CaDStar and Sellers.  All Compensation with 
reference to periods pr@lor to the Closing Date shall be 
credited to CaQStar as a reduction of the Purchase Price.



(f)	All fees and charges paid for transferable 
Permits the current --Deriod for which Permit includes the 
Closing Date shall be prorated as of the Cutoff Time between 
CapStar and Sellers.  All amounts accrued or payable under 
such Permits with reference to -Deriods Drior to the Closing 
Date shall be credited to CapStar as a reduc@ion of the 
Purchase Price.  All amounts paid under such Permits with 
reference to periods after the Closing Date shall be added to 
the Purchase Price.



(g)	The Purchase Pri-ce shall be reduced by the 
amount o-f all accounts for current guests at the Prooerties, 
the Pink Shell and Sa'LeL--y Harbor including items charged 
to such accounts by guesl-s reflected on the ledger of each 
Property, the Pink Shell and Safety Harbor as of the Cutoff 
Time in an amount equal to fifty percent (50'-.) of all of 
such room charges for such night, plus all other guest ledger 
charges for such night.



(h)	Ca-oSL--ar shall receive a credit as a 
reduction in the Purchase Price for all iDreDaid deposits for 
Reservatiors scheduled for accommodations or events on or 
afte-- the Closing Date.



(i)	All utility services, including, without 
limitation, telephone and telex contracts and contracts for 
the supply of heat, steam, electric power, gas, water, sewer 
and ligh-Ling, shall be prorated as o@L the Cutoff Time 
between CaDStar and Sellers.  Where possible, cutoff readings 
will be secured 'Lor all utilities as of the Cuto'Lf Time.  
To the extent they are no-L available, the cost of such 
utilities shall be apportioned between the varl--ies by 
estimating such cost on the basis of the



3 1

latest actual (not estimated) bill for such service.  All 
such amounts whi-ch are payable or estimated to have accrued 
for such utility services w@ith reference L-o periods Drior 
to L--he Closing Date shall be credited to CapStar as a 
reduction o'L the Purchase Price.  All amounts idaid for such 
utility services with reference to ideriods after the Closing 
Date shall be added to the Purchase Price.  Sellers shall 
receive a credit for all deposits, if any, made by Sellers as 
security under any such public service contracts if the same 
are trans'Lerable and provided such deposits remain on 
deposit for the benefit of CapStar.



(j)	Vending machine, laundry machine, pay 
telephone and other coin-operated equipment monies will be 
removed by Sellers as of the Cuto'Lf Time for the benefit of 
Sellers (subject -Lo the payment by Sellers or- any amounts 
owed third parties in connection with such vending machines, 
laundry machines, pay telephones and other coin-oderated 
equipment).



(k)	The Purchase Price shall be increased in an 
amount equal to the amount of all Accounts Receivable 
generated from the Business prior to the Cutoff Time which as 
of the Cut-Off Time have been unpaid for not more than ninety 
(90) days (the "Transferred Accounts Receivable"), and 
CapStar shall be entitled to collect and retain all such 
Accounts Receivables as they are received.  If CapStar i-s 
unable to collect the Trans@Lerred Accounts Receivable within 
ninety (90) days following the Closing Date, Sellers shall 
repurchase at the face value thereof those Trans'Lerred 
Accounts Receivable that CapStar is unable to collect.  No 
adjustmenl-- shall be made for any Accounts Receivable 
generated from the Business prior to the Cut-Off Time which 
as of the Cut-Off Time shall have been unpaid for nine-Ly 
(90) days or more, and Sellers shall be entitled to collect 
and retain all such Accounts Receivable.  Sellers shall 
deliver to CapStar on the Closing Date a L--rue, correct and 
comidlete schedule listing all of the Transferred Accounts 
Receivable.



(1)	The Purchase Price shall be increased by the 
amount paid by Sellers for the items of Consumables and 
Sunply Inventory shown on the Financial Statements as follows 
to @he extent such items have not been exdensed prior to the 
Cutoff Time: (i) unopened licruor and wine inventory; (ii) 
retail (gifts, groceries, etc); (iii@ marina - gas/oil.; (iv) 
general store; (v) gift shop; (vi) Warehouse Storage; (vii) 
tennis Dro shop; (viii) maintenance supplies; (ix) food 
service suldplies; (x) office and vending equipment; (x@-) 
computer equipment (which shall be limited to Sellers, on-
hand supply o-.cL computer replacement parts and replacemenl-
- equipment); and (xii) items customarily included in the 
"miscellaneous" category.  Notwithstanding this Section 
12.1(1), CapStar shall have the right to advise SSPC no later 
than thirty (30) days -Drior to the Closing Date that CapStar 
elects not to vurchase certain beverage inventory (in which 
case no prora-Lion for such excluded inventory shall be made 
hereunder)- If CaDStar so notilcies SSPC, the beverage 
inventory



32

that CaDStar elects not to purchase shall not be trans-erred 
@o

-                                               L      
L-
CapStar.



(m)	The Purchase Price shall be decreased by the 
outs-Landing accounts payable and accrued expenses of Sellers 
as of the Cutoff Time to the extent that such accounts 
Dayable and accrued expenses have not otherwise been deduc-
Led from the Purchase Price pursuant to this Section 12.1.



(n)	All prepaid expenses (including, without 
limitation, proiderty, casualty, workers, compensation or 
health insurance premiums) which are required for operation 
of the Properties, the Pink Shell and Safety Harbor and which 
have not otherwise been prorated pursuant to this Article XII 
and which relate to a period of more than one year shall be 
prorated as of the Cutoff Time between CaDStar and Sellers.



Section 12.2 Settlement Statement and Closing Date



Calculation.



(a)	Sellers and CapStar, through their respective 
accountants or representatives, together shall make such 
examinations and inventories of Sellers as may be necessary 
to make the adjustments and Drorations and allocations of 
Purchase Price among the Purchased Assets under this Article 
XII or under any other provisions of this Agreement.  Sellers 
and CapStar jointly shall prepare no later than the Closing 
Date a settlement statemenl- (the "Se-Ltlement Statement") 
that is based upon (i) the last available month-end balance 
sheet and income statement of Sellers (such mon-Lh-end 
statements are generally prepared by Sellers within twenty 
days following the prior month-end), and (ii) the 
examinations and inventories described in the preceding 
sentence.  The Settlement Statement shall contain Sellers, 
and Ca,DStar's best estimate of the amounts of the items 
requiring the prorations and adjustments in this Agreement 
and shall segregate such items on a Property by Property 
basis to the extent avdlicable.  The amounts set forth on the 
Settlement Statement shall be the basis u-Don which the 
prorations and adjustments provided for herein shall be made 
at the Closing.  Subject to Sections 12.2(b) and (c), the 
Settlement Statement shall be binding and conclusive on all 
parties hereto to the extent of the items covered by the 
Settlement Statement.



(b)	in the event that, at any time within nine 
(9) months after the Closing Da-Le, ei-ther party discovers 
any items (other than the items se-L forth in Sections 
12.1(i), (k) and (1)) which should have been included in -Lhe 
Settlement Statement but were omitted therefrom, such items 
shall be adjusted in the same manner as if their existence 
had been known at the time of the preparation of the 
Settlement Statement.



(c) With respect to the items set forth in Sections
12.1(i), (k) and (1), within sixty days after the Closing 
Date,



3 3

Sellers shall prepare a calculation of such items as of the 
Closing Date (the "Clos@-ng Date Calculation") and shall 
segregate such items therein on a Property by Property basis 
to the extent applicable.  The Closing Date calculation shall 
also set forl--h any adjustments -Lo the prorations and 
adjustments set forth in the Settlement Statement.  If 
CaDStar has any objections to the Closing Date Calculation, 
CapStar shall deliver a detailed statement describing its 
objections to Sellers within thirty (30) days after receiving 
the Closing Date Calculation.  CapStar and Sellers shall use 
reasonable efforts to resolve any such objections themselves.  
If Sellers and CapSL--ar do not obtain a' final resolution 
within thi-rty (30) days a-LcL--er Sellers have received the 
statement of objections, Sellers and CapStar shall select an 
accounting firm mutually acceptable to them to resolve any 
remaining objections.  If CapStar and Sellers are unable to 
agree on the choice of an accounting farm, they will select a 
nationally-recognized accounting firm by lot (after excluding 
their respective regular outside accounting firms).  The 
determination of any accounting firm so selected will be set 
 .Lorth in writing and will be conclusive and binding upon 
CaDStar and Sellers.  Upon resolution of all objections to 
the Closing Date CalculaL--ion, Sellers promptly shall revise 
the Closing Date Calculation to reflect such resolution of 
objections.  CapStar or Sellers, as the case may be, shall 
promptly pay the other party the amount of any additional 
adjustment required under such revised Closing Date 
Calculation (or as required under the initial Closing Date 
Calculati-on if Ca-oS-Lar does not notify Sellers of any 
objections within the applicable thirty-day period).  CapStar 
and Sellers shall split the costs and expenses of the 
accounting firm referenced above.  Sellers shall make the 
work papers and back-up,materials used in DreDari-ng the 
Closing Date Calculation available to CaDStar and its 
accountants and other reoresentatives at reasonable times and 
upon reasonable notice at a-Lly time during (i) the 
preparation by Sellers of the Closing Date Calculation, (ii) 
the review by CaDStar of the Closi-ng Date Calculation, and 
(iii) the resolution by CapStar and Sellers of any ob'ections 
thereto.

3



Section 12.3 Transaction Costs.

(a)	Sellers shall -may for the following costs 
associated with this transaction: (i) the fees and expenses 
o-L 4-ts accountants and attorneys, and (ii) the costs and 
expenses o-any mortgage or other releases associated with the 
pay off and release o@' existing mortgages and other non-
permitted encumbrances.



(b)	CapSL--ar shall pay for the following costs 
associated with this transaction: (i) the fees and expenses 
of its investment bankers or advisers; (ii) the fees and 
expenses of its accountants and attorneys; (iii) appraisal 
@Lees and charges, (iv) the fees, charges and expenses 
incurred in connection with any third party repo@-ts obtained 
by CaDStar (including, without



34

limitation, environmental, structural engineering and 
marketing reports), (v) application and/or trans@Ler fees 
relating to any franchise affil@-ations CaDStar desires to 
obtain, and (vi) fees and expenses relating to the transfer 
of all liquor licenses for the Properties, the Pi-nk Shell 
and Sa'Let7 Harbor.

(c)	Sellers and CapStar shall split equally the 
following costs associated with this transaction: (i) 
recording fees and charges, (ii-) the fees and expenses of 
any escrow agent, (iii) the costs of updates to the Existing 
Surveys or obtaining new surveys, (iv) transfer taxes, (v) 
documentary stamp taxes, (vi) sales and use taxes incurred by 
reason of the transfer of the Purchased Assets as con-
LemiDlated by this Agreement, and (vii) costs and charges 
relating to all Title Commitments and Title Policies 
(includ@-ng, without limitat4-on, any costs and charges of 
Guardian Title of Lee County).  All other costs and expenses 
not e@ressly addressed in this Section 12.3 shall be 
allocated between the parties i-n accordance with local 
custom for similar transactions.



(d)	If SSPC is able to provide CapStar wi-th 
engineering, building condition, environmental or aDDraisal 
reports that are satisfactory to CapStar and for which 
CapStar can obtain reliance letters, then if CapStar elects 
to use such reports CapStar will nay to SSPC the fees CapStar 
no=ally would pay for such reports under its nal--ional 
contracts.
Notwithstanding the foregoing sentence, CapStar shall have no 
obligation to use and Day for reports that SSPC may be able 
to provide to CapStar.



Section 12.4 ' Further Increases to Purchase 
Price. The Purchase Price shall be increased by the amounts 
of the following items and such items shall be transferred to 
CapStar at Closing and, i-f appropriate, shall be deemed to 
be included in the Purchased Assets.



(a)	all deposits for liquor licenses, utility 
deposits and beverage deposits with respect to the li-quor 
licenses, utilities and beverage services at the Properties, 
the Pink Shell and Safety Harbor; and



(b)	L--he amount by which Sellers' Actual Base 
Cavital Ex-oenditures as o--F L-he Closi-ng Dat-e exceed 
Sellers, Prorated Base Bu@geted Capital Ex-oenditures vlus 
the amount spent by any Seller in respect of any -Zpproved 
ProjecL@ CaDital Expenditure.  The 1998 annual budgeted base 
canital e@enditures for the purposes of the calculation 
required by this Section 12.4(h) and as previously submitted 
to CaDStar i-s $1,566,000; and



(c)	the accruisiti-on costs and d;irect expenses 
incurred by SSPC in com-iection-wi-th the purchase of the 
Plantation View and Shirley's Parcel (which as of the date 
hereo@L is estimated to be approximately $3,470,000) ; and



3 5

(d)	all notes receivable payable to any Seller by 
any condominium owner or condominium association at Sundial 
in connection with the assisted owner refurbishment program 
or association assisted refurbishment program at Sundial (but 
excluding any notes receivable arising in connection with the 
refurbishment program undertaken wi'Lh the proceeds of the 
Unit Rehab Loan) (each, a "Refurbishment Program Note 
Receivable").



Section 12.5 Further Reduction to Purchase Price. 
The Purchase Price shall be decreased by: (i) the amount by 
which Seller's Prorated Base BudgeL-ed Capital ExiDenditures 
exceed Seller's Actual Base Capital Expenditures as of the 
Closing Date, and (ii) all amounts due and owing in order to 
fully discharge and payoff as o@L the Time of Closing the 
Capital Leases as set forth in the payoff letters required to 
be delivered under Section 9.2(j) hereof.



ARTICLE XIII
MISCELLANEOUS PROVISIONS



Section 13.1 Com-pleteness, Modification. This 
Agreement, the Exhibits and Schedules hereto and the 
documents required to be delivered hereby constitute the 
entire agreement between Sellers and CapStar with respect to 
the transaction contemidlated hereby and supersede all prior 
discussions, understandings, agreements and negotiations 
between the parties hereto.  This Agreement may be modified 
only by a written instrument duly executed by Sellers and 
CapStar.  Each reference in thi-s Agreement to an Exhibit or 
Schedule shall mean an Exhibit or Schedule attached to this 
Agreement and incorporated into this Agreement by such 
reference.



Section 13.2 Assicr=ent. ExcepL- in connection 
with the Merger, neither any Seller nor CapStar shall assign 
its rights, dut-'Les or obligations hereunder withou-L the 
prior written consent of the others.



Secti-on 13.3 Successors and Assicrns; No Third rt 
Beneficiarv. This Agreement shall bind and inure to the 
benefit of the parties hereto and their respective successors 
and permitted assigns and shall not inure to the benefit of, 
and shall not be enforceable by, any third DarL--y.  If the 
Merger is consummated prior to consummation of this 
transaction, this Agreement shall be binding upon each 
successor entity to CaDStar.



Section 13.4 ' GovernincT Law. This Agreement and 
all documenL--s.referred to herein shall be governed by and 
construed and interpreted in accordance with the laws of the 
State of Florida.



Section 13.5 Co=te=arts. To facilitate execution, 
this Agreement may be executed in as many counterparts as may 
be required.  It shall not be necessary that L--he signatures 
on



3 6

behalf of the parties hereto aTDDear on each counterda--t 
hereof.  All counte-@arL--s hereof shall collectively 
constitute a single agreement'.



Section 13.6 ' Severability. If any term, covenant 
or condition of this Agreement, or the application thereof to 
any person or circumstance, shall to any extent be invalid or 
unenforceable, the remainder of this Agreement, or the 
application of such te=, covenant or condition to other 
persons or circumstances shall not be af@Lected thereby, and 
each term, covenant or condition of this Agreement shall be 
valid and enforceable to the fullest exl--ent pe=itted by 
law.



Section 13.7 Notices. All notices, requests, 
demands and other communications hereunder shall be in 
writing and shall be delivered by hand, transmitted by 
facsimile transmission, sent prepaid by Federal Ex-oress (or 
a comparable overnight delivery service) or sent by t@e 
United SL-ates mail, certified, postage p--epaid, return 
receiidt requested, at the addresses and with such copies as 
designated below.  Any notice, request, demand or other 
communication delivered or sent in the manner aforesaid shall 
be deemed given or made (as the case may be) when actually 
del@-vered to the intended recipient.



If to Sellers:	South Seas Properties Company
Limited Partnershir)
12800 University Drive, Suite 350
Fort Myers, Florida 33907
Attn:	Richard E. Krichbaum
Telecopy:	(941) 481-6667

W@-th a coi)y to:	Baker & Hostetler LLP 1900 East Ninth 
Street, Suite 3200 Cleveland, Ohio 
44114-3485
Attn:	Albert T. Adams, Esq.
Teleco,oy:	(216) 696-0740

If to CapStar:        CapStar Hotel Company
1010 Wisconsin Avenue, N.W.
Washington, D.C. 20007
Attn:	John Plunket
Telecopy:	(202) 295-2230

With a cody to:       DeCamoo, Diamond & Ash
805 Third Avenue
New York, New York 10022
Attn:	William H. Diamond, Esa.
Telecopy: (212) 758-1728



or to such other address as the intended recipient may have 
specified in a nol--ice to L-he other party.  Any party 
hereto may change its address or desi-gnate different or 
other persons or



3 7

entities to receive coidi-es by notifying the other party in 
a
manner described in this Section 13.7.



Section 13.8 Rules of Construction.  The following 
rules shall apply to the construction and interpretation of 
this Agreement:



(a)	Singular words shall connote the plural 
number as well as the singular and vi-ce versa, and the 
masculine shall include the feminine and the neuter.



(b)	All re@@erences herein to particular 
articles, sections, subsections, clauses or exhibits are 
references to articles, sections, subsections, clauses or 
exhibits of this Agreement.



(c)	The headings contained herein are solely for 
convenience of reference and shall not constitute a part of 
this Agreement nor shall they affecl-- its meaning, 
construction or effect.



(d)	Each Darty hereto and its counsel have 
reviewed and revised (or requested revisions of) this 
Agreement and have participated in -Lhe preparation of this 
Agreement, and therefore any usual rules of construction 
requiring that ambiguities are to he resolved against a 
particular party shall no-L be applicable in the construction 
and interpretation o'L this Agreement or any exhibits hereto.



Section 13.9 Su-pplements to Schedules. Any party 
may at any time, or from time to time after the date hereof, 
but not later than five (5) days prior to the Closing Date, 
supplement or amend the Schedules required by this Agreemen-
L.  No supplement or amendment L--o such Schedules shall have 
any effect for the Durpose of determining the satisfaction of 
the conditions to the obligation of the other parties under 
Article VII hereof, but any matter disclosed in an amended or 
supplemental Schedule pursuant to this Section 13.9 shall not 
form the basis for any claim for indemnification pursuant to 
this Agreement if the transaction contemplated by this 
Agreement is consummated.



Sec-Lion 13.10 Radon Gas.  Radon is a naturally 
occurring radioactive gas that, when it has accumulated in a 
building in su-@-.cLicient cruantities, may present health 
risks to Dersons who are exmosed to i-L over time.  Levels of 
radon that exceed federal and state guidelines have been 
found in buildings in Florida.  Additional info=ation 
regarding radon and radon testing may be obtained from your 
county public health unit.



IN WI =-SS WHEREOF, Sellers and CavStar have 
caused this Agreement to be executed i-n their names by their 
respective duly auk--horized representatives.



-3 8

Sellers:

SOUTH SEAS PROPERTIES COMPANY LIMITED
PARTNERSHIP, an Ohio limited partnership



By: T&T Resorts, L.C., a Florida



limited
partner



By:



Rober



ility company, general



Manager



lor, Chairma and



SOUTH SEAS RESORTS COMPAN-Y LIMITED PARTNERSHIP, a Florida 
limited partnership



By:	S.S. Resorr_
Florida
general



By:



Management, L.C., a
ted liability company,
r



Robert M. Tay ,@r, Chai=a and
Manager



SAFETY HARBOR MANAGEMENT COMPANY, LTD.,
a Florida limited partnership



By: S.S. Resort



agement, L.C., a



Florida li te



general pa



By:



3 9



Robert ".
Manager



liability company,



lor, Chai=an nd

SOUTH SEAS ESTERO IS@-ND, LTD., a
Flori-da limited zartnershid



By:	South Seas Estero Island, L.L.C.

By:	SouL--h Seas Properties Company
Limited Partnership



By: T&T Res



By:



CanStar:



Rob
Manager



L. C.



aylor, Chairm



 .By_       @., c@ 4.



Name:              @
Title:             @.,c, @re- ,lr4



4 0



and

LIST OF EXHIBITS AND SCHEDULES
TO
ASSET PURCHASE AGREEMENT


Schedules to Asset



Schedule	1.2(a)

Schedule	1.2(1)
Schedule	1.2(j)
Schedule	1.2(1)
Schedule	1.3
Schedule	4.1(d)
Schedule	5.3
Schedule	5.6
Schedule	5.7
Schedule	5.8
Schedule	5.9
Schedule	5.12
Schedule	5.13
Schedule	5.14
Schedule	5.15
Schedule	5.16
Schedule	5.21



Exhibits



Exhibit A
Exhibit B



to Asset



Purchase Agreement:



Legal Description of Land and Addresses of
Properties
Tenant Leases
Seller Leases
Management Agreements
Excluded Assets
Title Commitments and Surveys
Sellers' Conflicts
Financial Statements
ComDliance with ADplicable Laws
Litigati-on
Insurance
Environmental Matters
Pension and Welfare Plans
Permits
List of Condominium Lease Agreements
Equipment Leases and Material Contracts
Proprietary Rights



Purchase Aareement:



Definitions
Elimination Price Reductions



4 1

EXHIBIT A

The following terms when used @-n this Agreement shall have 
L-he
indicated meanings:



"Accounts Receivable" has the meaning set forth in
clause (s) of the definition of Purchased Assets.



"Actual Base Caoital Ex-oenditures" means the 
amount of base capital expenditures undertaken by Sellers for 
the period commencing January 1, 1998 and ending on -Lhe 
Closing Date.



"Affiliate,, has the meaning set forth in Section 12b-2
of the Securities Exchange Act of 1934, as amended.



"AGTII has the meaning set forth in Recital G to this



Agreement.

"A-o,olicable Law" means all laws, statutes, 
rules, regulations, ordinances and codes of any Governmental 
Authority and any Board of Fire Unde--writers and similar 
agencies, and any judgment, injunction, order, decree or 
other judicial requirement affecting or in any way relating 
to the Business and the operation of the ProDerties, 
including, without limitation, Environmental Health and 
Safety Laws and SEC Laws.



"Assumed Liabilities" has the meaning set forth in
Section 2.1 of this Agreemen'L.



"Base 'Canital Pr6lects" means those normal, 
recurring

projects o'L a capital nature that are reflected in Sellers' 
1998
budget.



"Books and Records" has t--he meaning set forth in 
clause
(q)	of the d=-@Lin-Ltion of Purchased Assets.



"Business" has the meani-ng set forth in Recital D to
this Agreement.



"CaDital Leases" means all Leases the obligations 
of which are required to be classified and accounted for 
under GAAP as capital lease obligations on a balance sheet.



"CanStar" has the meaning set forth in the first
paragraph o@L this Agreement.



"CaDStar ReDresentatives" has the meani-ng set forth in
Section 4.1(c) of this Agreement.



"Closincr" has the meaning set forth in Section. 9.1 of
this Agreement-



42

"Closina Date,, has the meaning set forth in Section 9.1
o'L th'Ls Agreement.



"Closina Da-Le Calculation" has the meaning set forth in
Section 12.2(c) of this Ag--eement.



"Closing Documents" has the meaning set forth in
Section 9.1 of this Agreement.



"Code" means the Internal Revenue Code of 1986, as



amended.

"ComDensation" means the direct salaries and wages 
paid to or accrued for the benefit o'L the Employees, 
including incentive compensation, together with all fringe 
benefits payable to, or accrued for the benefit of, any 
executive or other employee, including employer's 
contributions under the Federal Insurance Contribution Act, 
unemployment compensation, or other employment taxes, pension 
fund contributions, workers, compensation, group life and 
accident and health insurance premiums, profit sharing, 
retirement, disability, maternity leave, and other similar 
benefits, accrued vacatibn pay, accrued sick pay, and all 
other contributions to, and amounts paid or accrued under, 
Dension and other employee health and benefit plans, 
'Drograms or policies, including, without limitation, as of 
any date, the right to receive any of the foregoing 
notwithstanding L-hat such right entitles such Employee to 
receive payment at a time a@Lter the date in quest-ion.



"Condominium Lease Aareements" has the meaning set
forth in clause (f) of the definition of Purchased Assets.



"Confidential Ini@ormation" has the meaning set @Lorth in
Section 8.3(a) of this Agreement.



"Consumables" has the meaning set forth in clause (d)
OIL the definition of Purchased Assets.



"Contracts" means, collectively, the Operating 
Agreements, Ecruir)ment Leases, Management Agreements and 
memberships.



"Co--Dorate Offices" means the offices of Sellers 
located at 12800 University Drive, Sui-Les 350 and 420, For-L 
Myers, Flori-da.



"Customer and Marketincr Information" has the meaning
set forth in clause (p) of the definition of Purchased 
Assets.



"Cutoff Time" has the meaning set 'LorL--h in section 12.1



O@L this Agreemen-L-



43

"Deeds and Convevance Documents" mean the 
following documents necessary to convey and assign to CauStar 
all o-Lc Sellers' right, title and interest in and to t@e 
Purchased Assets:



(a)	with respect to the transfer of the Real Property under 
this Agreement, a special warranty deed in form and 
substance reasonably satisfactory to SSPC and CaDStar, 
subject only to the Pe=itted Title Exceptions;



(b)	with respect to the transfer of the Personal Property 
@other than the Personal Property covered under clauses 
(d),(e) and (f) of this definition) under this 
Agreement, a Bi-11 of Sale in form and substance 
reasonably satisfactory to SSPC and Ca7oStar;



(c)	with respect to the assignment of the Tenant Leases, the 
Pink Shell Lease, the Safety Harbor Ground Lease, Seller 
Leases and Condominium Lease Agreements under this 
Agreement, an Assignment and Assumption of Leases in 
form and substance reasonably satisfactory to SSPC and 
CapStar;



(d)	with respect to the assignment of the Operating 
Agreements, Equipment Leases, the Pink Shell Management 
Agreement, Management Agreements, Mem.berships and 
Pe=its under this Agreement, an Assignment and 
AssumDtion of Operating Agreements in fo= and substance 
reasonably satis-Lcactory to SSPC and CaDStar;



(e)	with respecl-- to the L--ransfer of any Intellectual 
Property, Reservations and other intangible Personal 
Property under this Agreement, an Assignment and 
Assumption Agreement in form and substance reasonably 
satisfactory to SSPC and CaDStar.



"Due Diliqence Period" has the meaning set forth in
Section 4.1 of this Agreement.



"EmD!ovees" means all emvloyees of SSRC, SSPC and SHMC
employed exclusively in connection wi-Lh the Business.



"Environmental Claims" means any claim for 
reimbursement or remediation expense, contribution, personal 
inju--y, proverty damage or damage to natural resources made 
in writing by or on behal'L of any third party including, 
without limitation, any Governmental Authority, relating to 
or arising



Id A

out of the release of any F-azardous Substances or the 
violation
of any Environmental, Health and Safety Laws.



"Environmental, Health and Safetv Laws" means any 
federal, state, or local statute, law, rule, regulation, 
ordinance and code of any Governmental Authority, and any 
judgment, injunction, order, decree or other judicial 
requirement which regulates or controls (i) Dollution, 
contamination, or the condition of groundwater, sur'Lace 
water, soil, sediment, air or the workplace or (ii) a spill, 
leak, emission, discharge, release or disposal into 
groundwater, surface water, soil, sediment, dir or the 
workplace, including without limitation the federal 
Comprehensive, Environmental Response, Compensation, and 
Liability Act ("CERCLAII) , 42 U.S.C.  9601 e-L- sea., as 
amended; the federal Resource Conservation and Recovery Act 
("RCPAll), 42 U.S.C.  6901 et sea., as amended; the 
Hazardous Materials Transportation Act (11 HMT-Z.") , 49 U.S. 
C.  1801 et sea., as amended; the Toxic Subs'Lances Control 
Ac-L ("TSCAII), is u.s.c.  2601 et sea., as amended; the 
Clean Air Act ("CA-k"), 42 U.S.C.  7401 et sea., as amended; 
the Clean Water Act ("CWA"), 33 U.S.C.  1251 et sea., as 
amended; the Safe Drinking Water Act .(IISDWAIT), 42 U.S.C.  
300f et sea., as amended; the Emergency Planning and 
Community Right to Know Act ("EPCPAll) , 42 U.S. C.  11001 
et sea., as amended; the Federal, Insecticide, Fungicide and 
Rodenticide Act ("FIFR-z,") , 7 U.S.C.  136 et ' sea., as 
amended; the Occupational Safety and Health Act ("OSHA"), 29 
U.S.C.  651 et secr., as amended; the National Environmental 
Policy Act ("NEPAII) , 42 U.S. C.  4321 et secr. , as 
amended; any similar state or local statutes or ordinances, 
and the regulations promulgated thereunder.



"Ecrui,oment Leases" has the meaning set forth in 
clause
(m)	of the definition o'L Purchased Assets.



"ERISAII means the Employee Retirement Income 
Security Act of 1974, as amended, and the regulations, 
interpretations and exemptions promulgated thereunder.



"Excluded Assets" has the meaning set forth in 
Section
1.3	of this Agreement.



"Excluded Liabilities" has the meaning set forth in
Section 2.2 of thi-s Agreement-.



"Existing Survevs" has the meaning set forth in Section
4.1(d) of this Agreement.



"Financi-al SL@atements" has the meaning set forth in
Section 5.6 of this Agreement.



"Fixtures and Tanaible Personal Pro-c>ertv" has 
the meaning set forth i-n clause (c) o'L the definition of 
Purchased Assets.



45

"GAAP" means generally accepted accounting principles,
consis,--ently ai)-olied.



"Governmental Authoritv" means any nation or 
government, any state or other political subdivision thereof 
or any entity exercising executive, legislative, judicial, 
regulato--y or administrative functions of or pertaining to 
government, i-n each case to the extent the same has 
jurisdiction over the person or property i-n question.



"Hazardous Substances" means any toxic substance, 
 . hazardous substance, hazardous waste, hazardous material, 
soli-d waste, residual waste, infectious waste, contaminant, 
pollutant, or constituent L--hereof, whether solid, 
semisolid, liquid or gaseous, which are regulated, listed or 
controlled by Environmental, Health and Safety Laws.



"Imnrovements" has the meani-ng set forth in clause (b)
of the definition of Purchased Assets.



"Indemnification Loss" or "Indemnification Losses" 
have the meaning set forth in Sections 11.2 and 11.3 of this 
Agreement.



"Indemnified Partv" has the meaning set forth in
Section 11.5 of this Agreement.



"Indemnifying Partv" has the meaning set forth in
Section 11.5 of this Agreement.



"Indemniteell means either a Seller Indemnitee or a
Purchaser Indemnitee, as the case may be.



"Indemnitv Ex-oiration Date" has the meaning set 
forth
4n Section 11.1 of this Agreement.

L



"Insurance Policies" has the meaning set forth in
Section 5.9 of this Agreement.



"Intellectual ProoertV" has the meaning seL-- forth in
clause (p) of the definition of Purchased Assets.



"KnowledcTell means, (i) with respect to any 
Seller, the current actual knowledge of Robert M. Taylor, 
Timothy R. Bogott, Richard E. Krichbaum or Judy Emens (a'Lter 
due @-nquiry of the general managers of the Properties) and 
shall not be construed to refer to the knowledge of any other 
trustee, partner, officer, director, agent, employee or 
representative of any Seller, or any Affiliate of any Seller; 
and (ii) with respect to either Purchase--, the current 
actual knowledge of John Plunket, William Reynolds, Troy 
Furbay, Robin Kirk, John Emery and David McCasli-n, and shall 
not be construed to refer to the knowledge of any other 
trustee, partner, o@L'Li-cer, director, agent, employee or



46

represenL@-ati-ve of either Purchaser or any A'Lfiliate of 
either Purchaser, or any matter disclosed by Sellers to 
Purchasers in w'riting pursuant to Article V or Article VI 
hereof-



"Land" has the meaning set forth in clause (a) of the
definition of Purchased Assets.



"Leases" means, collectively, the Condominium Lease
Agreements, Seller Leases and Tenant Leases.



"Liabilities" means any liability, obligation, 
loss 'in value, damage, cost or expense of any nature 
whatsoever, whether now known or unknown, asserted or 
unasserted, accrued or unaccrued, liquidated or unli-
quidated, due or to become due, including, without 
limitation, any liability with respect to taxes of any kind 
whatsoever that relate to any of the Purchased Assets or the 
Busi-ness.



"Management Agreements" has the meaning set forth in
clause (k) o'L the definition of Purchased Assets.



"Manaaement Level EmDlovees'l means all salaried
Em-oloyees of SHMC having an annual salary of $25,000 or 
more.



"Marco" has the meaning se-L forth in Recital F of this



Agreement.

"Material Adverse Ef 1-@ect 11 means, with respect 
to Sellers, a material adverse e@Lfect on the business, 
assets, properties or liabilities of Sellers taken as a 
whole, and with respect tb Purchasers, a material adverse 
effec-L on the business, asseL--s, properties or liabilities 
of Purchasers taken as a whole.



"Ma'L--erial Contract" means any Operating 
Agreements a-nd EquiT)ment Leases requiring aggregate 
remaining paymen-Ls in excess of Fifty Thousand Dollars 
($50,000).



"Membershir)sll has the meaning set forth in clause (g)
of the definition of Purchased Assets.



"Meraer" has the meaning set forth in Recital G of this



Agreement.

"ODerating Aareemen-s" has the meaning set forth 
in

L:5
clause (1) o'L the definition of Purchased Assets.



"Ordinary Course o@L Business" means with respect 
to the Business and each Property the ordinary course of 
business consistent with past custom and practices for the 
Business and such Pro@rty.



"Other Aareement" has the meaning set forth in Recital
F of this Agreement.



4 7

"Pension Plans" has the meani-ng set forth in Section
5.13(a) of this Agreement.



"Permits" has the meaning set forth in clause (n) of
the de@Linition of Purchased Assets.



"Permitted Title Exceoti..o.n.s-" has the meaning set forth
in Section 4.1(d) of this Agreement.



"Personal ProDert-VII means, collectively, all of the
Purchased Assets other than the Real Property.



"Pink Shell" has the meaning set forth in Recital C to
this Agreement.



"Pink Shell Lease" has the meaning set forth in Recital
C to this Agreem7ent.



"Pink ' Shell Manaaement Aareement" means that 
certain Management Agreement, dated January 1, 1995, between 
Florida Income Fund III, Limited Partnership, an Iowa limited 
partnership, and SSRC.



"P.i-nk Shell FF&E Purchase Agreement" has the meaning
set forl-h in Recital C to this Agreement.



"Pink Shell FF&E Consideration" has the meaning set
forth in Re a@tal'C to this AgreemenL-.



"Pink Shell Purchase Agreement" has the meaning set
forth i-n Recital C to this Agre6ment.



"Plans" has the meaning set forth in Section 5.13(a) of
this Agreement.



"Pro@ect CaDital Exr)end@tures" means all non-
recurring, extraordinary, special -Droject capital 
expenditures (other than any work undertaken with the 
proceeds of the Unit Rehab Loan) incurred by Sellers in 
excess of Sellers' Base Capital Projects.



"Pro-oertvll and "Prolperties" have the meaning set forth
in Recital D to this Agreement.



"Pro-oerty Re-oorts" has the meaning set forth in 
clause
(r)	of the definition of Purchased Assets.



"Pronrietarv Riahts" has the meaning set f. orth in
Section 5.21 of this Agreement.



"Prorated Base Budaeted Canital Ex-oenditures" 
means $130,500 multiplied by the number of full months from 
January 1, 1998 to, but noL-- including, the month of 
Closing.



4 8

"Prosnective Purchaser" has the mean ing set forth in
ReciL--al C to this Agreement.



"Purchased Assets" means the following:

(a)	The land described on Schedule 1.2(a), along 
with all appurtenant rights, easements, rights-of-way and 
privileges relating thereto and landscaping located thereon 
(the "Land") ;



(b)	All buildings, structures and improvements on 
or affixed to the Land, including fixtures constituting real 
properl-y under Applicable Law (-@he "Improvements"; the Land 
and the Improvements are referred to herei-n collectively as 
the "Real ProperL@-y'l);



(c)	All fixtures, furniture, furnishings, 
fittings, equipment--, machinery, appliances, vehicles, 
computer hardware, art work and other articles of tangible 
personal property (together with all warranties and 
guaranties with respect thereto, to the exten-L 
transferable), which are used or usable or have been ordered 
for future use in connection with the operation of the Busi-
ness and which are located at the SSPC Owned Properties, the 
Pink Shell or Safety Harbor or which are owned by SSRC 
(wherever located), other than the Consumables and SuDply 
Inventories (the "Fixtures and Tangible Personal Property");



(d)	All food and beverages (alcoholic and 
nonalcoholic) that are held for sale, whether opened or 
unopened, which are used or held in reserve or ordered fo'r 
future use in connection with the operation of the Business 
and which are located at the SSPC Owned Properties, the Pink 
Shell or Safety Harbor or which are owned by SSRC (wherever 
located) at normal operating levels, and including all 
resupplies and reiDlacemenL-s in the Ordinary Cou--se of 
'Rusiness prior to the Closing Date (the "Consumables'l);



(e)	All chi-na, glassware, silverware; linens; 
uniforms; engineering, maintenance, cleaning and housekeeping 
supplies; matches and ashtrays; soap and other toiletries; 
stationery, menus and other printed materials; and all other 
materials and supplies, whether in use or held in reserve or 
ordered 'Lor 'Luture use in connection with the operation of 
the Business and located at the SSPC Owned Properties, the 
Pink Shell or Safety Harbor or which are owned by SSRC 
(wherever located) at no=al operating levels, and including 
all resupplies, substitutions and replacements in the 
Ordinary Course of Business prior to the Closing Date (the 
"Sur)ply inventories");



(f)	All guaranteed lease agreements, rental 
agreements and other similar agreements between any Seller 
and owners of individual condominium units or Drivate 
residences for the shortterm rental of such units or 
residences by such Seller to third



49

Darties on behalf of such owners at Sundial and Sanibel Inn 
(the
,,Condominium Lease Agreements,,);



(g)	All memberships and membership agreements for 
access to or the use of any of the facilities at any 
Property, the Pink Shell or Safety Harbor (the 
"Memberships,,);



(h)	All bookings and reservations for (i) guest 
rooms and conference, convention and banquet rooms or other 
facilities at the Properties, the Pink Shell and Safety 
Harbor, and (ii) the condominium units or private residences 
under Condominium Lease Agreements (the "Reservations");



(i)	The leases, subleases and similar agreements 
(including all amendments, modi@Lications and supplements 
thereto and guaranties, extensions and renewals thereof5 
listed on Schedule 1.2(i) for the use or occupancy by third 
parties of any portion of the Real Property (other than the 
Reservations)(the "Tenant Leases''),-



(j)	The leases, subleases and similar agreements 
(including all amendments, modifications and supplements 
thereto and guaranties, extensions and renewals thereof) 
listed on Schedule 1.2(i) for the use or occupancy by Sellers 
of real property (the "Seller Leases,,);



(k) The management agreements listed on Schedule
1.2(l) (the "Management Agreements");



(1)	All service and maintenance contracts, credit 
card service agreements, booking and reservation agreements, 
brokerage and commission agreements, and all other contracts 
and agreements (including all amendments, modifications and 
suDDlements thereto and extensions and renewals thereof, and 
all warranties and guaranties thereunder to the extent 
transferable) which are held by any Seller in connection with 
the Business or operation of the Properties, the Pink Shell 
or Safety Harbor, other than the Condominium Lease 
Agreements, Memberships, Seller Leases, Tenant Leases, 
Management Agreements and Equipment Leases (the "Operating 
Agreements");



(m)	All leases and purchase money security 
agreements .Lor any Fixtures and Tangible Personal Property 
(including all amendments, modifications and supplements 
thereto and extension and renewals thereof, and all 
warranties and guaranties thereunder to the extent 
transferable) which are held by any Seller i-n connection 
with the Business or overation of the Properties, the Pink 
Shell or Sa@Lety Harbor, other than the Condominium Lease 
Agreements, Memberships, Seller Leases, Tenant Leases, 
Management Agreements and OperaL--ing Agreements (the 
"Equipment Leases");



5 0

(n)	All licenses, De--mits, consents, 
authorizations, approvals and certi-Lcicates of any 
Governmental Authority used in connection with the Business 
or operation of the Properties, the Pink Shell or Safety 
Harbor (to t@e extent the same are transferable) (the 
"Permits");



(o)	All of the following owned by, issued to or 
licensed to any Seller and used in connection with the 
Business or operation of the Properties, the Pink Shell or 
Safety Harbor (to the extent the same are transferable) : (i) 
trademarks, trade names (including, without limitation, the 
names of the Properties set forth in the recitals to this 
Agreement), service marks, trade dress, symbols and logos, 
together w@-th all goodwill associated therewith, and all 
registrations, applications, renewals, adaptations, 
derivations and combinations thereof; (ii-) copyrights an@ 
covyrightable works and all registration, applications and 
renewals therefor; (iii) trade secrets and confidential 
information (including, without limitation, ideas, drawings, 
specifications designs, plans, proposals, financial and 
accounting data, business and marketing plans) ; (iv) 
computer software; (v) all other intellectual property 
rights; and (vi) all copies and tangible embodiments of the 
foregoing (in whatever .Lorm or medium) (the "Intellectual 
Property");



(p)	All guest lists, customer files, group files, 
sales records, sales literature and brochures and other 
written marketing materials, and all telephone numbers used 
in the Business or operation of the ProDerties, the P@-nk 
Shell and Safety Harbor, and all goodwill associated with the 
Properties and the SHMC Lease (the "Cus-Lomer and Marketing 
Information");



(q)	All books and records, ledgers, 
correspondence and other @Liles and documents maintained by 
or on behalf of Sellers in connection with the Business or 
operation of the Properties, L-he Pink Shell and Safety 
Harbor (the "Books and Recordsil) ;



(r)	All blueprints, plans and specifications, 
engineering and environmental reports and studies relating to 
the Real Pro-oerty, to the exten-L the same exist and are 
transferable, (the "Property Reports");



(s)	Subject to Section 12.1(i) hereof, all trade 
accounts receivable, notes receivable and other receivables 
(the "Accounts Receivable"), and all claims, deposits, 
refunds, causes of acti-on, rights o@L --econvey, ri-ghts ol-
@ setoff, rights of recou-Dment and investments, and -prepaid 
expenses in connection with the Business or onerati-on or- 
t@e Properties, the Pink Shell and the SafeL--y Harbor.-



(t) All cash in house banks at the Properties, the
Pink Shell and aL-- Safety Harbor;



(u)	The Sa-Fety Harbor Ground Lease;

51

(v)	The Pink Shell FF&E Purchase Agreement; 
provided, however, that the payment of the Pink Shell @rF&E 
Considerati-on shall remai-n the liability of Sellers;



(w)	The Pink Shell Management Agreement;

(x)	The Pink Shell Lease; and

(y)	The Vacation Planning Center Lease.
"Purchase Price" has the meaning set forth in 
Section
3.1	of this Agreement.



"Purchaser" has the meaning set forth in the first
paragraph of this Agreement.



e
e
s
" 
h
a
v
e

"Purchaser Indemniteell and "Purchaser Indemnit

the meaning set forth in Section 11.3 of this Agreement.



"Real ProDerL-vll has the meaning set forth in clause (b)
of the defi action of Purchased Assets.



"Reservations" has the meaning set forth in clause (h)
of the definition of Purchased Assets.



"Safetv Harbor" has the meaning set forth in Recital B
to this Agreement.



"Safetv Harbor Ground Lease" means that certain 
Lease Agreement, dated June 14, 1995, between Safety Harbor 
Spa & Fitness Center, Inc., a Florida corporation, as 
landlord, and S-HMC, as tenant, with respect to Safety 
Harbor, as amended by that certain First Lease A-mendment, 
dated January 29, 1997.



"Sanibel Inn" has the meaning set forthlin Recital A to
this Agreement.



"Seaside" has the meaning set forth in Recital A to
this Agreement.



"SEC Laws" means The Securities Act of 1933, as 
amended, The Securi-ties Exchange Act of 1934, as 
amended,other federal and state laws advlicable to 
securities.



and all



"Seller Leases" has the meaning set forth in clause (j)
of the definition of Purchased Assets.



"Seller Indemniteell-and "Seller Indemnitees" have the
meaning set forth in Section 11.2 of this Agreement.



"Settlement Statement" has the meaning set forth in
Section 12.2 of this Agreement.



52

"SHMC" has the meaning set forth in the first idaragraph
of this Agreement.



IISS&CPII has the meaning set forth in Recital F of this



Agreement.

IISSEIII has the meaning set forth in L--he first paragraoh
of this Agreement.



IISSPCII has the meaning set forth in the first paragraph
of this Agreement.



IISSPC Owned Pro-oerty" and IISSPC Owned Pror)erties" have
the meaning set forl--h in Recital A to this Agreement.



IISSPC Renorts" has the meaning set forth in Section 5.6
of this Agreement.



IISSRC" has the meaning set forth in the first paragraph
of this Agreement.



IISSRLP" has the meaning set forth in Recital F of this



Agreement.
"Sundial,, has the meaning set forl-h in Recital A to
this Agreement.


"SunDly Inventories" has the meaning set forth in
clause (e) of the definition of Purchased Assets.



"Taxes" means any federal, state, local or foreign 
Income, gross receipts, license, Dayroll, employment, excise, 
severance, stamp, occupation, premium, windfall profits, 
environmental, customs duties, capital stock, @Lranchise, 
profits, withholding, social security, unemployment, 
disability, real property, personal property, sales, use, 
room, occupancy, beach renourishment, vault, transfer, 
registration, ad valorem, betterment assessments, value 
added, alternative or add-on minimum, estimated or other tax, 
charges or fees of any kind whatsoever, including any 
interest, penalty, or addition thereto, whether disputed or 
not, and including any obligation to indemnify or otherwise 
assume or succeed to such tax liability of any other person.



"Tenant Leases" has the meaning set forth in clause (i)
of the defii-iition of Purchased Assets.



Time o'L Closing" has the meaning set forth in 
Section
9.1	of this Agreement.



"Title Commi-Lments" has -Lhe meaning set forth in
Section 441(d) of this Agreement.



53

"Title Comnany" means First American Title Insurance
ComDany, Washington, D.C.



"Title Policies" has the meaning set forth in Sectic)n
4.1(d) o'L this Agreement.



"Transferred Emnloyees" has the meaning set forth in
Section 8.3(c) of this Agreement.



"Vacation Plannincr Center Lease" means the Lease 
Agreement, dated May 24, 1994, between Health Park Medical 
Pla'za One Associates, Ltd., as landlord, and SSRC, as 
tenant, and the unexecuted Lease Agreement, dated February 
14, 1995, between Lee Health Ventures, Inc., as landlord, and 
SSRC, as tenant.



"Welfare Plans" has the meaning set forth in Section
5.13(a) of this Agreement.







EXHIBIT B


Property						Elimination Price


Seaside Inn						5,500,000

Vacation Planning Center				0

Pink Shell Lease/Mgmt Fee			2,500,000

Sundial						18,600,000

Sanibel Inn						13,750,000

Safety Harbor					 5,150,000