WINSTON SPE LLC
                           (Borrower)
                                
                                
                                
                                
                               to
                                
                                
                                
                                
                    CMF CAPITAL COMPANY, LLC
                            (Lender)
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                         LOAN AGREEMENT
          
          
          
          
          
                                
                 Dated:  As of  November 3, 1998
                                
                                
                                
                                
                                
                                
                                
                      DOCUMENT PREPARED BY:
                      
                      Cadwalader, Wickersham & Taft
                      100 Maiden Lane
                      New York, New York 10038
                      Attention: Stephen Hauck, Esq.




                        TABLE OF CONTENTS
                                
                                                                
                                                            Page
                                                            ----



ARTICLE 1
 
 CERTAIN DEFINITIONS
   SECTION 1.1  CERTAIN DEFINITIONS                           1

ARTICLE 2
 
 LOAN TERMS
   SECTION 2.1  THE LOAN                                     13
   SECTION 2.2  INTEREST RATE                                13
   SECTION 2.3  TERMS OF PAYMENT                             13
   SECTION 2.4  PREPAYMENT; DEFEASANCE                       16
   SECTION 2.5  RELEASE OF PROPERTY                          18
   SECTION 2.6  SUBSTITUTION OF PROPERTIES                   20

ARTICLE 3
 
 SECURITY; RESERVES AND CASH MANAGEMENT
   SECTION 3.1  SECURITY; ESTABLISHMENT OF FUNDS             29
   SECTION 3.2  PLEDGE AND GRANT OF SECURITY INTEREST        30
   SECTION 3.3  DISBURSEMENT OF FUNDS                        30
   SECTION 3.4  INTENTIONALLY OMITTED                        31
   SECTION 3.5  CASH MANAGEMENT ACCOUNT                      31
   SECTION 3.6  PAYMENTS RECEIVED UNDER THE CASH MANAGEMENT
                AGREEMENT                                    32

ARTICLE 4
 
 CONDITIONS PRECEDENT
   SECTION 4.1  CLOSING CONDITIONS                           33

ARTICLE 5
 
 INSURANCE, CONDEMNATION, AND IMPOUNDS
   SECTION 5.1  INSURANCE; CASUALTY AND CONDEMNATION         37
   SECTION 5.2  CONDEMNATION                                 41
   SECTION 5.3  RESTORATION                                  41
   SECTION 5.4  IMPOUNDS                                     46

ARTICLE 6
 
 ENVIRONMENTAL MATTERS
   SECTION 6.1  CERTAIN DEFINITIONS                          47
   SECTION 6.2  REPRESENTATIONS AND WARRANTIES ON 
                ENVIRONMENTAL MATTERS                        48
   SECTION 6.3  COVENANTS ON ENVIRONMENTAL MATTERS           48
   SECTION 6.4  ALLOCATION OF RISKS AND INDEMNITY            49
   SECTION 6.5  NO WAIVER                                    50

ARTICLE 7
 
 LEASING MATTERS
   SECTION 7.1  REPRESENTATIONS AND WARRANTIES ON LEASES     50
   SECTION 7.2  STANDARD LEASE FORM; APPROVAL RIGHTS         50
   SECTION 7.3  COVENANTS                                    51
   SECTION 7.4  TENANT ESTOPPELS                             51

ARTICLE 8
 
 REPRESENTATIONS AND WARRANTIES
   SECTION 8.1  ORGANIZATION, POWER AND AUTHORITY            52
   SECTION 8.2  VALIDITY OF LOAN DOCUMENTS                   52
   SECTION 8.3  NO CONFLICTS                                 52
   SECTION 8.4  LIABILITIES; LITIGATION                      53
   SECTION 8.5  TAXES AND ASSESSMENTS                        53
   SECTION 8.6  OTHER AGREEMENTS; DEFAULTS                   53
   SECTION 8.7  TITLE                                        53
   SECTION 8.8  COMPLIANCE WITH LAW                          54
   SECTION 8.9  LOCATION OF BORROWER                         54
   SECTION 8.10  ERISA                                       54
   SECTION 8.11  FORFEITURE                                  55
   SECTION 8.12  TAX FILINGS                                 55
   SECTION 8.13  SOLVENCY                                    55
   SECTION 8.14  FULL AND ACCURATE DISCLOSURE                56
   SECTION 8.15  FLOOD ZONE                                  56
   SECTION 8.16  FEDERAL RESERVE REGULATIONS                 56
   SECTION 8.17  NOT A FOREIGN PERSON                        56
   SECTION 8.18  SEPARATE LOTS                               56
   SECTION 8.19  NO PRIOR ASSIGNMENT                         56
   SECTION 8.20  INSURANCE                                   56
   SECTION 8.21  USE OF PROPERTIES                           57
   SECTION 8.22  CERTIFICATE OF OCCUPANCY; LICENSES          57
   SECTION 8.23  PHYSICAL CONDITION                          57
   SECTION 8.24  BOUNDARIES                                  57
   SECTION 8.25  INTENTIONALLY OMITTED                       57
   SECTION 8.26  INTENTIONALLY OMITTED                       57
   SECTION 8.27  FILING AND RECORDING TAXES                  57
   SECTION 8.28  SINGLE PURPOSE ENTITY/SEPARATENESS          58
   SECTION 8.29  MANAGEMENT AGREEMENTS                       60
   SECTION 8.30  FRANCHISE AGREEMENTS; OPERATING LEASES      62
   SECTION 8.31  INVESTMENT COMPANY ACT                      63
   SECTION 8.32  LEASES                                      63
   SECTION 8.33  SPE COMPLIANCE                              63

ARTICLE 9
 
 FINANCIAL REPORTING
   SECTION 9.1  FINANCIAL STATEMENTS                         63
   SECTION 9.2  ACCOUNTING PRINCIPLES                        65
   SECTION 9.3  OTHER INFORMATION; ACCESS                    65
   SECTION 9.4  FORMAT OF DELIVERY                           66

ARTICLE 10
 
 COVENANTS
   SECTION 10.1  DUE SALE AND ENCUMBRANCE; TRANSFERS OF
   INTERESTS                                                 66
   SECTION 10.2  TAXES; UTILITY CHARGES                      69
   SECTION 10.3  OPERATING LEASE                             69
   SECTION 10.4  OPERATION; MAINTENANCE; INSPECTION          69
   SECTION 10.5  TAXES ON SECURITY                           70
   SECTION 10.6  LEGAL EXISTENCE; NAME, ETC.                 70
   SECTION 10.7  FURTHER ASSURANCES                          70
   SECTION 10.8  ESTOPPEL CERTIFICATES                       71
   SECTION 10.9  NOTICE OF CERTAIN EVENTS                    71
   SECTION 10.10  INDEMNIFICATION                            71
   SECTION 10.11  PAYMENT FOR LABOR AND MATERIALS            71
   SECTION 10.12  ALTERATIONS                                72
   SECTION 10.13  HANDICAPPED ACCESS                         72
   SECTION 10.14  CERTAIN HOTEL/FRANCHISE COVENANTS          73

ARTICLE 11
 
 EVENTS OF DEFAULT
   SECTION 11.1  PAYMENTS                                    74
   SECTION 11.2  INSURANCE                                   74
   SECTION 11.3  SINGLE PURPOSE ENTITY                       74
   SECTION 11.4  INSOLVENCY OPINION                          74
   SECTION 11.5  TAXES                                       74
   SECTION 11.6  SALE, ENCUMBRANCE, ETC.                     74
   SECTION 11.7  REPRESENTATIONS AND WARRANTIES              75
   SECTION 11.8  OTHER ENCUMBRANCES                          75
   SECTION 11.9  INVOLUNTARY BANKRUPTCY OR OTHER PROCEEDING  75
   SECTION 11.10  VOLUNTARY PETITIONS, ETC.                  75
   SECTION 11.11  COVENANTS                                  75
   SECTION 11.12  OPERATING LEASES                           76

<PAGE 5>

   SECTION 11.13  FRANCHISE AGREEMENTS AND MANAGEMENT 
                  AGREEMENTS                                 76

ARTICLE 12
 
 REMEDIES
   SECTION 12.1  REMEDIES - INSOLVENCY EVENTS                76
   SECTION 12.2  REMEDIES - OTHER EVENTS                     76
   SECTION 12.3  LENDER'S RIGHT TO PERFORM THE OBLIGATIONS   77
   SECTION 12.4  CROSS-DEFAULT; CROSS-COLLATERALIZATION; 
                 WAIVER OF MARSHALLING OF ASSETS             78

ARTICLE 13
 
 LIMITATIONS ON LIABILITY
   SECTION 13.1  LIMITATION ON LIABILITY                     79
   SECTION 13.2  LIMITATION ON LIABILITY OF LENDER'S 
                 OFFICERS,EMPLOYEES, ETC.                    80
 
 ARTICLE 14
 
 SECURITIZATION
   SECTION 14.1  SECURITIZATION                              80
   SECTION 14.2  SECURITIZATION INDEMNIFICATION              81
   SECTION 14.3  SERVICER                                    84

ARTICLE 15
 
 MISCELLANEOUS
   SECTION 15.1  NOTICES                                     84
   SECTION 15.2  AMENDMENTS AND WAIVERS                      85
   SECTION 15.3  LIMITATION ON INTEREST                      85
   SECTION 15.4  INVALID PROVISIONS                          86
   SECTION 15.5  REIMBURSEMENT OF EXPENSES                   86
   SECTION 15.6  APPROVALS; THIRD PARTIES; CONDITIONS        86
   SECTION 15.7  LENDER NOT IN CONTROL; NO PARTNERSHIP       87
   SECTION 15.8  TIME OF THE ESSENCE                         87
   SECTION 15.9  SUCCESSORS AND ASSIGNS                      87
   SECTION 15.10  RENEWAL, EXTENSION OR REARRANGEMENT        87
   SECTION 15.11  WAIVERS                                    88
   SECTION 15.12  CUMULATIVE RIGHTS; JOINT AND SEVERAL 
                  LIABILITY                                  88
   SECTION 15.13  SINGULAR AND PLURAL                        88
   SECTION 15.14  PHRASES                                    88
   SECTION 15.15  EXHIBITS AND SCHEDULES                     88
   SECTION 15.16  TITLES OF ARTICLES, SECTIONS AND 
                  SUBSECTIONS                                88
   SECTION 15.17  PROMOTIONAL MATERIAL                       88
   SECTION 15.18  SURVIVAL                                   89
   SECTION 15.19  WAIVER OF JURY TRIAL                       89
   SECTION 15.20  WAIVER OF PUNITIVE OR CONSEQUENTIAL DAMAGES89
   SECTION 15.21  GOVERNING LAW                              89
   SECTION 15.22  ENTIRE AGREEMENT                           91
   SECTION 15.23  COUNTERPARTS                               91
   SECTION 15.24  BROKERS AND FINANCIAL ADVISORS             91
   SECTION 15.25  CONFLICTS                                  91
   SECTION 15.26  LENDER ESTOPPELS                           91
   

                                
                               
                 LIST OF EXHIBITS AND SCHEDULES
                                

SCHEDULE I          RELEASE AMOUNTS

SCHEDULE II         REQUIRED REPAIRS

SCHEDULE III        INTENTIONALLY OMITTED

SCHEDULE IV         FRANCHISE AGREEMENTS

SCHEDULE V          OPERATING LEASES

SCHEDULE VI         FORM OF NONDISTURBANCE AGREEMENT

SCHEDULE VII        TENANT ESTOPPEL CERTIFICATE AND AGREEMENT

SCHEDULE VIII       FORM OF SNDA

SCHEDULE IX         LITIGATION

SCHEDULE X          MANAGER'S CONSENT AND SUBORDINATION OF
                    MANAGEMENT AGREEMENT

SCHEDULE XI         MANAGEMENT AGREEMENTS

SCHEDULE XII        MARRIOTT FRANCHISE AGREEMENTS

SCHEDULE XIII       MARRIOTT OWNER AGREEMENTS


                         LOAN AGREEMENT
                         --------------
                                
          
          This Loan Agreement (this "AGREEMENT") is entered into
as  of  November  3, 1998, between CMF CAPITAL COMPANY,  LLC,  a
Delaware  limited liability company ("Lender"), and WINSTON  SPE
LLC, a Virginia limited liability company ("BORROWER").
                                
                                
                            ARTICLE 1
                                
                       CERTAIN DEFINITIONS
          
          Section 1.1  CERTAIN DEFINITIONS.  As used herein, the
following terms have the meanings indicated:
          
          "ACCESS LAWS" has the meaning assigned in Section 10.13.
           -----------
          
          "ACCRUED INTEREST" has the meaning assigned in Section
           ----------------
2.3(b).
          
          "ADJUSTED RATE" has the meaning assigned  in  Section
           -------------
2.2.
          
          "ADJUSTED RELEASE AMOUNT" shall mean for an Individual
           -----------------------
Property the product of (a) the quotient obtained by dividing the
original Release Amount for such Individual Property by the  sum
of  the  original  Release Amount for all  Properties,  (b)  the
outstanding  principal  balance of the Loan, and (c) and one
hundred twenty-five percent (125%).
          
          "AFFILIATE" means (a) any corporation in which Borrower
           ---------
or  any  partner,  shareholder, director,  officer,  member,  or
manager of Borrower directly or indirectly owns or controls more
than  ten  percent  (10%) of the beneficial  interest,  (b)  any
partnership, joint venture or limited liability company in which
Borrower or any partner, shareholder, director, officer, member,
or  manager of Borrower is a partner, joint venturer or  member,
(c)  any  trust  in which Borrower or any partner,  shareholder,
director, officer, member or manager of Borrower is a trustee or
beneficiary,  (d) any entity of any type which  is  directly  or
indirectly  owned  or  controlled by Borrower  or  any  partner,
shareholder,  director, officer, member or manager of  Borrower,
(e) any partner, shareholder, director, officer, member, manager
or  employee  of  Borrower,  (f) any Person  related  by  birth,
adoption  or  marriage  to any partner,  shareholder,  director,
officer, member, manager, or employee of Borrower, and  (g)  any
Borrower Party.
          
          "AGREEMENT" means this Loan Agreement, as amended from
           ---------
time to time.
          
          "ANNUAL BUDGET"  shall  mean  the  operating  budget,
           -------------
including  all  planned capital expenditures, for all the
Properties prepared by Borrower or the Operating Lessee for the
applicable calendar year or other period.
          
          "ANTICIPATED PAYMENT DATE" means December 1, 2008.
           ------------------------


  
          "APPROVED ANNUAL BUDGET" has the meaning assigned in
           ----------------------
Section 2.3(h).
          
          "ASSIGNMENT OF LEASES AND RENTS" means the  Assignment
           ------------------------------
of  Leases  and Rents, executed by Borrower for the  benefit  of
Lender,  and  pertaining to leases of space in  each  Individual
Property    and   any   amendments,   modifications,   renewals,
substitutions or replacement thereof.
          
          "AWARD" has the meaning assigned in Section 5.2.
           -----
          
          "BANKRUPTCY PARTY" has the meaning assigned in Section
           ----------------
11.9.
          
          "BASIC CARRYING COSTS" shall mean, with respect to  an
           --------------------
Individual  Property, the sum of the following costs  associated
with such Individual Property for the relevant calendar year  or
payment period:  (i) Taxes and (ii) Insurance Premiums.
          
          "BORROWER PARTY"  means  any  Joinder   Party,   any
           --------------
guarantor,  any  general partner of Borrower if  Borrower  is  a
partnership or a limited partnership, any general partner in any
partnership or limited partnership that is a general partner  of
Borrower,  any  managing member of Borrower  if  Borrower  is  a
limited liability company, and any managing member in any limited
liability company that is a managing member of Borrower, at  any
level.
          
          "BROKER" means First American Realty Associates, Inc.
           ------
          
          "BUSINESS DAY" means a day other than a  Saturday, a
           ------------
Sunday, or a legal holiday on which national banks located in the
States  of New York and North Carolina are not open for  general
banking business.
          
          "CAPITAL EXPENDITURES" means,  for  any  period,  the
           --------------------
amount  expended for items capitalized under generally  accepted
accounting  principles  (including  expenditures  for   building
improvements  or major repairs, leasing commissions  and  tenant
improvements).
          
          "CASH EXPENSES" means, for any period, the  operating
           -------------
expenses for the operation of the Properties as set forth in  an
Approved  Annual  Budget, to the extent that such  expenses  are
actually incurred by Borrower, minus any payments into  the  Tax
and Insurance Escrow Fund.
          
          "CASH MANAGEMENT ACCOUNT" has the meaning assigned  in
           -----------------------
Section 3.5(a).
          
          "CASH MANAGEMENT AGREEMENT" has the meaning assigned in
           -------------------------
Section 2.3(i).
          
          "CASUALTY CONSULTANT"  has the  meaning  assigned  in
           -------------------
Section 5.3(b)(iii).
          
          "CASUALTY RETAINAGE"  has  the  meaning  assigned  in
           ------------------
Section 5.3(b)(iv).
          
          "CLOSING DATE" means the date the Loan is  funded  by
           ------------
Lender.

          "CODE" shall mean the Internal Revenue Code of 1986, as
           ----
amended, and as it may be further amended from time to time, any
successor  statutes thereto, and applicable U.S.  Department  of
Treasury  regulations issued pursuant thereto  in  temporary  or
final form.
          
          "CONDEMNATION" has the meaning assigned in Section 5.2.
           ------------
          
          "CONDEMNATION PROCEEDS" has the meaning  assigned  in
           ---------------------
Section 5.3(b).
          
          "CONTRACT RATE" has the meaning assigned  in  Section
           -------------
2.2.
          
          "DEBT" shall mean the outstanding principal amount set
           ----
forth in, and evidenced by, this Agreement and the Note, together
with  all interest accrued and unpaid thereon and all other sums
(including  the  Yield Maintenance Premium)  due  to  Lender  in
respect of the Loan under the Note, this Agreement, the Mortgages
or any other Loan Document.
          
          "DEBT SERVICE"  means the aggregate  interest,  fixed
           ------------
principal,  and other payments due under the Loan,  and  on  any
other outstanding permitted Indebtedness approved by Lender  for
the period of time for which calculated.
          
          "DEBT SERVICE COVERAGE RATIO" shall mean a ratio for
           ---------------------------
the applicable period in which:
                    
                    (a)   the  numerator  is the  Net  Operating
                    Income  for such period as set forth in  the
                    statements required hereunder; and
                    
                    (b)  the denominator is the aggregate amount
                    of principal and interest due and payable on
                    the  Note or, in the event that a Defeasance
                    Event has occurred, the Undefeased Note.
          
          "DEBT SERVICE ESCROW FUND" has the meaning ascribed in
           ------------------------
Section 3.1 (c).
          
          "DEFAULT RATE" means the lesser of (a) the maximum rate
           ------------
of interest allowed by applicable law, and (b) five percent (5%)
per  annum in excess of the Contract Rate or the Adjusted  Rate,
whichever is then in effect.
          
          "DEFEASANCE DATE" has the meaning ascribed in  Section
           ---------------
2.4(b)(i).
          
          "DEFEASANCE DEPOSIT" shall mean an  amount  which  is
           ------------------
sufficient  to  purchase U.S. Obligations  or  other  government
securities  (as  defined in Section 2(a)(16) of  the  Investment
Company Act of 1940, as amended (15 U.S.C. 80a-1)), necessary to
meet  the  Scheduled Defeasance Payments as and  when  the  same
become due and to pay any costs and expenses incurred or  to  be
incurred  in  the purchase thereof, and any revenue, documentary
stamp  or  intangible taxes or any other tax or  charge  due  in
connection with the transfer of the Note or the Defeased Note, as
applicable, the creation of the Defeased Note and the Undefeased
Note,  if  applicable, or otherwise required to  accomplish  the
requirements of Sections 2.4 and 2.5 hereof.

          "DEFEASANCE EVENT"  has  the  meaning  assigned   in
           ----------------
Section 2.4(b).
          
          "DEFEASED NOTE" has the meaning assigned in 
           -------------
Section 2.4(b)(v).
          
          "ELIGIBLE ACCOUNT"  shall mean a separate and
           ----------------
identifiable  account from all other funds held by  the  holding
institution that is either (i) an account or accounts maintained
with a federal or state-chartered depository institution or trust
company   which  complies  with  the  definition   of   Eligible
Institution  or  (ii)  a segregated trust  account  or  accounts
maintained   with  a  federal  or  state  chartered   depository
institution  or  trust company acting in its fiduciary  capacity
which, in the case of a state chartered depository institution or
trust company is subject to regulations substantially similar to
12 C.F.R.  9.10(b), having in either case a combined capital and
surplus  of  at least $50,000,000 and subject to supervision  or
examination by federal and state authority.  An Eligible Account
will  not be evidenced by a certificate of deposit, passbook  or
other instrument.
          
          "ELIBIBLE INSTITUTION"  shall  mean   a   depository
           --------------------
institution or trust company that satisfies the Rating Criteria.
          
          "ENVIRONMENTAL LAWS"  has  the  meaning  assigned  in
           ------------------
Section 6.1(a).
          
          "ERISA" has the meaning assigned in Section 8.10(a).
           -----
          
          "EVENT OF DEFAULT"  has  the  meaning  assigned in
           ----------------
Article 11.
          
          "EXTRAORDINARY EXPENSES"  means   an   extraordinary
           ----------------------
operating expense or capital expense not set forth in an Approved
Annual Budget.
          
          "FRANCHISE AGREEMENT"  means,  with  respect  to  any
           -------------------
Individual  Property,  that  certain  franchise  agreement  more
specifically identified on Schedule IV attached hereto.
          
          "FRANCHISOR"  means, with respect  to  any  Individual
           ----------
Property  which  is  subject  to  a  Franchise  Agreement,   the
franchisor  with  respect  thereto, as  same  is  identified  on
Schedule IV attached hereto.
          
          "FUNDAMENTAL TRANSACTION" has the meaning assigned  in
           -----------------------
Section 10.1(c).
          
          "FUNDS" means the Required Repair Fund, the Replacement
           -----
Escrow Fund and the Debt Service Escrow Fund.
          
          "GOVERNMENTAL AUTHORITY" shall mean any court,  board,
           ----------------------
agency, commission, office or authority of any nature whatsoever
for  any  governmental unit (federal, state,  county,  district,
municipal,  city  or  otherwise) whether  now  or  hereafter  in
existence.
          
          "HAZARDOUS MATERIALS"  has the  meaning  assigned  in
           -------------------
Section 6.1(b).
          
          "HAZARDOUS MATERIALS INDEMNITY AGREEMENT" shall  mean
           ---------------------------------------
that  certain hazardous materials indemnity agreement dated  the
date hereof by Borrower and Indemnitor in favor of Lender.
          
          "IMPROVEMENTS" shall have the meaning assigned to such
           ------------
term  in  the  related Mortgage with respect to each  Individual
Property.
          
          "INDEBTEDNESS"   means,  for   any   Person,   without
           ------------
duplication:  (a) all indebtedness of such Person  for  borrowed
money,  for amounts drawn under a letter of credit, or  for  the
deferred purchase price of property for which such Person or its
assets  is  liable,  (b)  all  unfunded  amounts  under  a  loan
agreement, letter of credit, or other credit facility for  which
such Person would be liable, if such amounts were advanced under
the credit facility, (c) all amounts required to be paid by such
Person  as  a  guaranteed payment to partners or a preferred  or
special dividend, including any mandatory redemption of shares or
interests,  (d)  all  indebtedness guaranteed  by  such  Person,
directly  or  indirectly, (e) all obligations under leases  that
constitute  capital leases for which such Person is liable,  and
(f)  all  obligations of such Person under interest rate  swaps,
caps,  floors,  collars and other interest hedge agreements,  in
each  case  whether  such  Person  is  liable  contingently   or
otherwise, as obligor, guarantor or otherwise, or in respect  of
which  obligations  such  Person otherwise  assures  a  creditor
against loss.
          
          "INDEMNITOR" shall mean REIT and Operating Partnership.
           ----------
          
          "INDEPENDENT DIRECTOR" has the  meaning  assigned  in
           --------------------
Section 8.28(p).
          
          "INDIVIDUAL PROPERTY"  means  each  parcel  of   real
           -------------------
property  and the Improvements thereon encumbered by a Mortgage,
together  with  all  rights  pertaining  to  such  property  and
improvements,  as more particularly described  in  the  granting
clauses  of  each such Mortgage and referred to therein  as  the
"Property".
          
          "INSOLVENCY OPINION"  has  the  meaning  assigned  in
           ------------------
Section 8.28(r).
          
          "INSURANCE PREMIUMS"  has  the  meaning  assigned  in
           ------------------
Section 5.1(b).
          
          "INSURANCE PROCEEDS"  has  the  meaning  assigned  in
           ------------------
Section 5.3(b).
          
          "JOINDER PARTY" means the Persons executing the Joinder
           -------------
hereto.
          
          "LEASE"  shall  mean, with respect to each  Individual
           -----
Property, all leases, subleases, occupancy agreements, licenses,
concessions, rental contracts and other agreements  (written  or
oral) entered into by Borrower or any Borrower Party, or to which
Borrower  or any Borrower Party is a successor, now or hereafter
existing relating to the use or occupancy of the project located
on  such  Individual  Property, including the  Operating  Lease,
together with all guarantees, letters of credit and other credit
support, modifications, extensions and renewals thereof, whether
before or after the filing by or against Borrower of any petition
of relief under 11 U.S.C.  101 et seq., and all related security
and other deposits.

          "LEGAL REQUIREMENTS" shall mean, with respect to  each
           ------------------
Individual Property, federal, state, county, municipal and other
governmental   statutes,  laws,  rules,   orders,   regulations,
ordinances,  judgments, decrees and injunctions of  Governmental
Authorities  affecting  such Individual  Property  or  any  part
thereof  or  the  construction,  use,  alteration  or  operation
thereof,  or any part thereof, whether now or hereafter  enacted
and  in force, and all permits, licenses and authorizations  and
regulations  relating  thereto, and all  covenants,  agreements,
restrictions  and  encumbrances contained  in  any  instruments,
either  of  record or known to Borrower, at any  time  in  force
affecting   such  Individual  Property  or  any  part   thereof,
including, without limitation, any which may (i) require repairs,
modifications or alterations in or to such Individual Property or
any part thereof, or (ii) in any way limit the use and enjoyment
thereof.
          
          "LIABILITIES"  has  the meaning  assigned  in  Section
           -----------
14.2(b).
          
          "LIEN" means, with respect to each Individual Property,
           ----
any  interest,  or  claim thereof, in such  Individual  Property
securing an obligation owed to, or a claim by, any Person  other
than the owner of such Individual Property, whether such interest
is  based on common law, statute or contract, including the lien
or  security  interest arising from a deed of  trust,  mortgage,
assignment, encumbrance, pledge, security agreement, conditional
sale  or  trust receipt or a Lease, consignment or bailment  for
security  purposes.  The term "Lien" shall include reservations,
exceptions, encroachments, easements, rights of way,  covenants,
conditions, restrictions, Leases and other title exceptions  and
encumbrances affecting such Individual Property.
          
          "LOAN" means the loan made by Lender to Borrower under
           ----
this  Agreement  and  all  other amounts  secured  by  the  Loan
Documents.
          
          "LOAN DOCUMENTS" means:  (a) this Agreement, (b)  the
           --------------
Note,  (c)  the Mortgage for each Individual Property,  (d)  the
Assignment  of  Leases  and Rents for each Individual  Property,
(e)  the  Hazardous Materials Indemnity Agreement,  (f)  Uniform
Commercial  Code  financing statements, (g) the Cash  Management
Agreement,  (h)  the  Nondisturbance Agreement,  (i)  all  other
documents evidencing, securing, governing or otherwise pertaining
to  the  Loan, and (j) all amendments, modifications,  renewals,
substitutions or replacements of any of the foregoing.
          
          "LOCKOUT YIELD MAINTENANCE PREMIUM"  shall  mean  an
           ---------------------------------
amount  equal  to  the greater of (a) one percent  (1%)  of  the
outstanding  principal  amount of the  Loan  to  be  prepaid  or
satisfied,  as applicable, or (b) the Yield Maintenance  Premium
that  would  be  required  if a Defeasance  Event  had  occurred
(whether  or  not permitted under this Agreement) in  an  amount
equal  to  the outstanding principal amount of the  Loan  to  be
satisfied  or prepaid, as applicable; plus if the prepayment  of
which the Lockout Yield Maintenance Premium is a part is not paid
on  a Payment Date, the interest that would have accrued on  the
Loan through the next Payment Date.
          
          "MANAGEMENT AGREEMENT" means,  with  respect  to  any
           --------------------
Individual  Property, the management agreement, if any,  entered
into by and between Borrower or Operating Lessee, as applicable, 
and  the  Manager pursuant to which the Manager  is  to  provide
management  and  other services with respect to said  Individual
Property.
          
          "MANAGER" means any manager of any Individual Property
           -------
approved in accordance with the terms and provisions of the Loan
Documents.
          
          "MATURITY DATE" means the earliest of (a) December  1,
           -------------
2023;  (b) any earlier date on which the entire Loan is required
to  be  paid  in full, by acceleration or otherwise, under  this
Agreement or any of the other Loan Documents; or (c) if the Loan
is  not  subject to a Securitization on the Anticipated  Payment
Date, the Anticipated Payment Date.
          
          "MONTHLY DEBT SERVICE PAYMENT AMOUNT" has the  meaning
           -----------------------------------
assigned in Section 2.3(a).
          
          "MORTGAGE"  means,  with respect  to  each  Individual
           --------
Property, as applicable, the Mortgage, Assignment of Leases  and
Rents, Security Agreement and Fixture Filing, the Deed of Trust,
Assignment  of Leases and Rents, Security Agreement and  Fixture
Filing,  or  the Deed to Secure Debt, Assignment of  Leases  and
Rents,  Security  Agreement  and  Fixture  Filing,  executed  by
Borrower  in favor of Lender, covering such Individual  Property
and  any  amendments, modifications, renewals, substitutions  or
replacement thereof.
          
          "NET OPERATING INCOME" means the amount  obtained  by
           --------------------
subtracting  Operating  Expenses and Capital  Expenditures  from
Operating Revenues.
          
          "NET PROCEEDS"  has the meaning assigned  in  Section
           ------------
5.3(b).
          
          "NET PROCEEDS DEFICIENCY" has the meaning assigned  in
           -----------------------
Section 5.3(b)(vi).
          
          "NONDISTURBANCE AGREEMENT"  shall  mean,   for   each
           ------------------------
Individual  Property, that certain Nondisturbance, Subordination
and  Attornment Agreement among Lender, Borrower  and  Operating
Lessee, substantially in the form attached hereto as Schedule VI,
(as  such Nondisturbance Agreement may be amended to include any
revisions  required by Lender in the event a different  form  of
Operating Lease than those currently in existence is entered into
by Operating Lessee).
          
          "NOTE" means the Promissory Note of even date, in  the
           ----
stated principal amount of Seventy-One Million and No/100 Dollars
($71,000,000), executed by Borrower, and payable to the order of
Lender  in  evidence of the Loan, as the same may  hereafter  be
modified,  amended, restated, renewed or replaced and  including
any Defeased Note and Undefeased Note that may exist from time to
time.
          
          "OFFERING DOCUMENT" has the meaning assigned in Section
           -----------------
14.2(a).
          
          "OPERATING EXPENSES" means all reasonable and necessary
           ------------------
expenses of Borrower of operating the Properties in the ordinary
course of Borrower's business whether incurred, paid, accrued or
payable,  as determined in accordance with GAAP and the  Uniform
System  of  Accounts, by or on behalf of Borrower and which  are
directly  associated with and fairly allocable to the Properties
for  the  applicable  period, including real  estate  taxes  and
assessments,  insurance premiums, maintenance costs,  management
fees  and  costs  in  an amount equal to the  greater  of  those
actually  incurred  or  four percent  (4%)  of  gross  operating
revenues  of  the  Properties,  accounting,  legal,  and   other
professional fees, fees relating to environmental and  net  cash
flow  and  audits,  and other expenses incurred  by  Lender  and
reimbursed  by Borrower under this Agreement and the other  Loan
Documents,  deposits  to the Replacement Escrow  Fund,  Tax  and
Insurance  Fund,  wages,  salaries, and  personnel  expenses  of
Borrower, but excluding Debt Service, capital expenditures,  any
of  the foregoing expenses which are paid from deposits to  cash
reserves previously included as Operating Expenses, any  payment
or  expense  for which Borrower was or is to be reimbursed  from
proceeds of the Loan or insurance or by any third party, and any
non-cash  charges  such as depreciation and  amortization.   Any
management  fee or other expense payable to Borrower  or  to  an
Affiliate of Borrower shall be included as an Operating  Expense
only with Lender's prior approval.  Operating Expenses shall not
include  any  expenses (including, without limitation,  federal,
state or local income taxes or legal and other professional fees)
unrelated to the operation of the Properties.
          
          "OPERATING LEASE" means, with respect to any Individual
           ---------------
Property, the lease agreement in effect between the Borrower and
the Operating Lessee for the use and operation of each Individual
Property    and   all   amendments,   modifications,   renewals,
substitutions or replacements of each such lease.   The  initial
Operating  Leases in effect as of the date hereof are identified
on Schedule V attached hereto.
          
          "OPERATING LEASE RENT" shall mean all rents, revenues,
           --------------------
issues,  profits, income and proceeds due or to  become  due  to
Borrower under the Operating Leases.
          
          "OPERATING LESSEE"  means,  with  respect   to   any
           ----------------
Individual Property which is subject to an Operating Lease,  the
lessee with respect thereto.  The initial Operating Lessees under
the  Operating  Leases  in effect as  of  the  date  hereof  are
identified on Schedule V attached hereto.
          
          "OPERATING PARTNERSHIP"  shall  mean  WINN   Limited
           ---------------------
Partnership, a North Carolina limited partnership.
          
          "OPERATING REVENUES"  means  all  gross  revenues  of
           ------------------
Borrower from operation of the Properties or otherwise arising in
respect  of the Properties which are properly allocable  to  the
Properties for the applicable period, including Rent,  Operating
Lease Rent and other receipts from Leases and parking agreements,
concession  fees  and charges and other miscellaneous  operating
revenues  and  also  including amounts  designated  as  deffered
revenues under Rule 98-9 of the Internal Revenue Service Emerging
Issues  Task Force, but excluding security deposits and  earnest
money deposits until they are forfeited by the depositor, advance
rentals until they are earned, and proceeds from a sale or other
disposition.   Operating  Revenues shall  not  include  (a)  any
condemnation or insurance proceeds, other than the  proceeds  of
any business interruption or loss of income insurance received by
Borrower,  (b) any proceeds resulting from the sale,  exchange, 
transfer, financing or refinancing of all or any  part  of  the
Properties,  (c) any rent accrued by Borrower but  not  received
because  of any free rent provisions or other rental concessions
in  any  Lease,  (d)  any repayments received  from  tenants  of
principal  loaned  or advanced to tenants by Borrower,  (e)  any
payments  due  pursuant to the terms of any Lease in  connection
with  the cancellation or termination of a Lease, (f) investment
income  on  any  reserves or funds not  related  to  the  normal
operation of the Properties, including, without limitation, funds
allocated  to pay for construction expenses or (g) any  type  of
income  other than Operating Lease Rent that would otherwise  be
considered  Operating Revenues pursuant to the provisions  above
but  is paid directly by any tenant to a Person or entity  other
than Borrower.
          
          "PAYMENT DATE"  shall  mean the  first  day  of  each
           ------------
calendar month commencing on the first day of January, 1999.
          
          "PERMITTED ENCUMBRANCES"  means  outstanding   liens,
           ----------------------
easements, restrictions, security interests and other exceptions
to  title  set forth in the policies of title insurance insuring
the  liens  of  the Mortgages, together with (i) the  liens  and
security  interests  in  favor of Lender  created  by  the  Loan
Documents  and  (ii)  any other encumbrances  that  Borrower  is
permitted to enter into pursuant to Section 8.28(d)(iii) hereof.
          
          "PERSON"    means    any   individual,    corporation,
           ------
partnership,  joint venture, association, joint  stock  company,
trust, trustee, estate, limited liability company, unincorporated
organization,  real estate investment trust, government  or  any
agency  or political subdivision thereof, or any other  form  of
entity.
          
          "PERSONALTY" shall have the meaning assigned  to  such
           ----------
term  in  the  related Mortgage with respect to each  Individual
Property.
          
          "POLICIES" has the meaning assigned in Section 5.1(b).
           --------
          
          "POLICY" has the meaning assigned in Section 5.1(b).
           ------
          
          "POTENTIAL DEFAULT" means the occurrence of any  event
           -----------------
or  condition which, with the giving of notice, the  passage  of
time, or both, would constitute an Event of Default.
          
          "PROPERTIES" means, collectively, all of the Individual
           ----------
Properties which are subject to the terms of this Agreement.
          
          "QUALIFIED MANAGER" means a Manager that  is  (or  is
           -----------------
controlled by, controlling or under common control with)  either
(a)  an  entity owned by the executive management  of  the  REIT
immediately prior to the applicable Fundamental Transaction,  or
(b)  a professional management company which at the time of  its
engagement as Manager shall be the property manager for at least
ten (10) hotel properties containing at least one thousand three
hundred (1,300) rooms exclusive of the Properties.
       
          "QUALIFIED OPERATING LESSEE" means a Person that (a) is
           --------------------------
(or  is controlled by, controlling or under common control with)
either  (i) an entity owned by the executive management  of  the
REIT immediately prior to the applicable Fundamental Transaction,
or  (ii)  a  hotel operating company which at the  time  of  its
engagement   as   Operating  Lessee  shall  be   operating   and
controlling,  as  owner, manager or operating lessee,  at  least
twelve (12) hotel properties consisting of at least one thousand
five hundred (1,500) rooms exclusive of the Properties, and  (b)
is  a single purpose bankruptcy-remote entity in accordance with
the then-current standards of the Rating Agencies.
          
          "QUALIFIED RESULTANT OWNER" means one or more  Persons
           -------------------------
which,  individually  or collectively, own  at  least  fifty-one
percent (51%) of the beneficial interest in and control  of  the
REIT or the Operating Partnership, as applicable; and (1)(a)  is
or is controlled by either a pension fund, pension fund advisor,
an  insurance company, a domestic bank (with total assets of  at
least  One  Billion Dollars ($1,000,000,000)), or a publicly  or
privately traded real estate investment trust or other  publicly
traded  or  privately held company, (b) has a then  current  net
worth of at least One Hundred Million Dollars ($100,000,000) and
total real estate assets of at least Two Hundred Million Dollars
($200,000,000), in each case exclusive of the Properties (or  in
the  case  of  a  pension fund advisor, controls at  least  Five
Hundred  Million ($500,000,000) in real estate assets), and  (c)
controls  (exclusive of the Properties) at least ten (10)  hotel
properties  containing in the aggregate at  least  one  thousand
three   hundred  (1,300)  rooms  and  (2)  if  the   Fundamental
Transaction occurs at any time that the Loan is not  part  of  a
Securitization, (x) such Person(s) are not and  have  not  been,
within  the  previous ten (10) years, subject to  any  material,
uncured  event  of  default which resulted in litigation  or  an
acceleration of any indebtedness under any agreement with Lender,
(y)  such Person(s) are not subject to any bankruptcy action and
(z) the principals or entities which control such Person(s) have
never been convicted of a felony.
          
          "RATING AGENCIES" means (i) prior to a Securitization,
           ---------------
each  of  Standard & Poor's Ratings Group, a division of McGraw-
Hill, Inc. and Moody's Investors Service, Inc. and (ii) following
a  Securitization, each of the following agencies who  rate  the
Securities  issued in one or more Securitizations of  which  the
Loan  is a part: Standard & Poor's Ratings Group, a division  of
McGraw-Hill, Inc., Moody's Investors Service, Inc., Duff & Phelps
Credit  Rating Co. and Fitch IBCA Inc., or any other nationally-
recognized statistical rating agency which has been approved  by
Lender.
          
          "RATING CRITERIA" with respect to any  Person,  shall
           ---------------
mean  the  short term unsecured debt obligations  or  commercial
paper  which are rated at least A-1 by Standard & Poor's Ratings
Group,  P-1 by Moody's Investors Service, Inc., D-1  by  Duff  &
Phelps Credit Rating Co. and F-1+ by Fitch IBCA, Inc. in the case
of  accounts in which funds are held for 30 days or less (or, in
the  case of accounts in which funds are held for more  than  30
days, the long term unsecured debt obligations of which are rated
at least "AA-" by Fitch, Duff and Standard & Poor's and "Aa3" by
Moody's).
          
          "REGISTRATION STATEMENT" has the meaning  assigned  in
           ----------------------
Section 14.2(b).
        
          "REIT"  shall  mean  Winston  Hotels,  Inc.,  a  North
           ----
Carolina corporation.
          
          "RELEASE AMOUNT" means, for an Individual Property, the
           --------------
amount set forth on Schedule I attached hereto.
          
          "RELEASE DATE" shall mean the earlier of (i) the  date
           ------------
that  is two (2) years from the "startup day" within the meaning
of  Section 860G(a)(9) of the Code of the REMIC Trust  or  (iii)
three (3) years from the date hereof.
          
          "REMIC TRUST"  shall  mean a  "real  estate  mortgage
           -----------
investment  conduit" within the meaning of Section 860D  of  the
Code that holds the Note.
          
          "RENT" shall mean all rents, revenues, issues, profits,
           ----
income  and  proceeds due or to become due from tenants  of  the
Properties, including rentals and all other payments of any kind
under  the  Leases  and  Operating Leases  for  using,  leasing,
licensing, possessing, operating from, rendering in, selling  or
otherwise enjoying the Properties including, without limitation,
all  hotel receipts, revenues and credit card receipts collected
from guest rooms, restaurants, bars, meeting rooms, banquet rooms
and   recreational   facilities,   all   receivables,   customer
obligations,   installment   payment   obligations   and   other
obligations now existing or hereafter arising or created out  of
the sale, lease, sublease, license, concession or other grant of
the  right of the use and occupancy of property or rendering  of
services  by  Borrower, any Operating Lessee or any operator  or
manager  of  the  hotel or the commercial space located  in  the
Improvements   or  acquired  from  others  (including,   without
limitation,  from the rental of any office space, retail  space,
guest  rooms  or  other space, halls, stores, and  offices,  and
deposits  securing reservations of such space), license,  lease,
sublease and concession fees and rentals, health club membership
fees,  food  and  beverage wholesale and retail  sales,  service
charges,  vending  machine  sales and  proceeds,  if  any,  from
business interruption or other loss of income insurance.
          
          "REPLACEMENT ESCROW FUND" has the meaning assigned  in
           -----------------------
Section 3.1(b).
          
          "REQUIRED REPAIR FUND" has the meaning  assigned  in
           --------------------
Section 3.1(a).
          
          "RESTORATION" shall mean the repair and restoration of
           -----------
an Individual Property after a casualty or Condemnation as nearly
as  possible  to  the condition the Individual Property  was  in
immediately  prior to such casualty or Condemnation,  with  such
alterations as may be reasonably approved by Lender.
          
          "SCHEDULED DEFEASANCE PAYMENTS"  has  the   meaning
           -----------------------------
assigned in Section 2.4(c).
          
          "SECURITIES" has the meaning assigned in Section 14.1.
           ----------
          
          "SECURITIES ACT" has the meaning assigned  in  Section
           --------------
14.2.
          
          "SECURITIZATION" has the meaning assigned  in  Section
           --------------
14.1.
          
          "SECURITIZATION INFORMATION" has the meaning  assigned
           --------------------------
in Section 14.1(a)(iii).


          "SECURITY AGREEMENT"  has  the  meaning  assigned  in
           ------------------
Section 2.4(b)(v).
          
          "SERVICER" has the meaning assigned in Section 14.3.
           --------
          
          "SERVICING AGREEMENT"  has the  meaning  assigned  in
           -------------------
Section 14.3.
          
          "SEVERED LOAN DOCUMENTS" has the meaning assigned  in
           ----------------------
Section 12.2(c).
          
          "SINGLE PURPOSE ENTITY" shall mean a Person (other than
           ---------------------
an   individual,  a  government  or  any  agency  or   political
subdivision  thereof), which exists solely for  the  purpose  of
owning the Properties, observes corporate, company or partnership
formalities, as applicable, independent of any other Person, and
which otherwise complies with the covenants set forth in Section
8.28 hereof.
          
          "SITE ASSESSMENT" means an environmental  engineering
           ---------------
report  for  each  Individual Property  prepared  at  Borrower's
expense  by  an  engineer engaged by Borrower  and  approved  by
Lender,  and in a manner satisfactory to Lender, based  upon  an
investigation  relating  to  and  making  appropriate  inquiries
concerning the existence of Hazardous Materials on or about each
such  Individual  Property, and the past or  present  discharge,
disposal,  release  or  escape  of  any  such  substances,   all
consistent with ASTM Standard E1527-93 or any successor  thereto
published by ASTM and good customary and commercial practice.
          
          "SPC PARTY" has the meaning assigned in 8.28(o).
           ---------
          
          "SUBSTITUTE PROPERTIES" has the meaning  assigned  in
           ---------------------
Section 2.6.
          
          "SUBSTITUTE PROPERTY"  has the  meaning  assigned  in
           -------------------
Section 2.6.
          
          "SUBSTITUTED PROPERTY" has the  meaning  assigned  in
           --------------------
Section 2.6.
          
          "SUBSTITUTE RELEASE AMOUNT" has the meaning assigned in
           -------------------------
Section 2.6.
          
          "SUCCESSOR"  has  the  meaning  assigned  in   Section
           ---------
10.1(c).
          
          "SUCCESSOR BORROWER"  has  the  meaning  assigned  in
           ------------------
Section 2.5(c).
          
          "TAX AND INSURANCE ESCROW FUND"  has  the  meaning
           -----------------------------
assigned in Section 5.4.
          
          "TAXES" has the meaning assigned in Section 10.2.
           -----
          
          "THRESHOLD AMOUNT" has the meaning assigned in Section
           ----------------
10.12.
          
          "TRANSFEREE"  has  the  meaning  assigned  in  Section
           ----------
10.1(d)(ii).
          
          "TREASURY RATE"  shall mean, as  of  the  Anticipated
           -------------
Payment  Date,  the  yield, calculated by  linear  interpolation
(rounded  to  the nearest one-thousandth of one  percent  (i.e.,
0.001%)  of  the  yields of noncallable United  States  Treasury
obligations with terms (one longer and one shorter) most nearly 
approximating the period from such 
date of determination to the Maturity  Date, as determined by 
Lender on the basis of Federal Reserve Statistical Release 
H.15-Selected Interest Rates under the heading U.S. Governmental
Security/Treasury Constant Maturities, or other recognized source
of financial market information selected by Lender.
          
          "UNDEFEASED NOTE" has the meaning assigned in Section
           ---------------
2.4(b)(v).
          
          "U.S. OBLIGATIONS"  shall  mean  direct  non-callable
           ----------------
obligations of the United States of America.
          
          "YIELD MAINTENANCE PREMIUM" shall mean the amount  (if
           -------------------------
any) which, when added to the remaining principal amount of  the
Note or the principal amount of the Defeased Note, as applicable,
will  be  sufficient to purchase U.S. Obligations providing  the
required Scheduled Defeasance Payments.
                                
                                
                            ARTICLE 2
                                
                           LOAN TERMS
                           ----------
          
          SECTION 2.1  THE LOAN.  Lender agrees to make a Loan of
                       --------
SEVENTY-ONE MILLION AND NO/100 DOLLARS ($71,000,000) to Borrower,
which  shall  be funded in one advance and repaid in  accordance
with  the terms of this Agreement and the Note.  Borrower hereby
agrees  to accept the Loan on the Closing Date, subject  to  and
upon the terms and conditions set forth herein.
          
          SECTION  2.2   INTEREST RATE.  From  the  date  hereof
                         -------------
through  but  not  including the Anticipated Payment  Date,  the
outstanding principal balance of the Loan shall bear interest at
a rate of interest equal to seven and three hundred seventy-five
one-thousandths percent (7.375%) per annum (the "CONTRACT RATE").
From and after the Anticipated Payment Date through and including
the Maturity Date, the outstanding principal balance of the Loan
shall bear interest at a rate per annum equal to the greater  of
(i)  the Contract Rate plus three percentage points (3%) or (ii)
the  Treasury  Rate  plus  three  percentage  points  (3%)  (the
"ADJUSTED RATE"); provided, however, if after  the  Anticipated
                  --------  -------
Payment  Date  at  any  time  the  Loan  is  not  subject  to  a
Securitization,  such  Adjusted  Rate  shall  be  increased  two
percentage points (2%) per annum for so long as the Loan is  not
subject to a Securitization.
          
          SECTION 2.3  TERMS OF PAYMENT.
                       ----------------
          
          (a)  INTEREST AND PRINCIPAL.  The Loan shall be payable
               ----------------------
as  follows:  (i)  payment of interest  only  (computed  at  the
Contract  Rate) on the date hereof for the period from the  date
hereof  through  the last day of the current month  (unless  the
Closing Date is the first day of a calendar month, in which case
no such interest is due); and (ii) thereafter, a constant payment
of  $518,924.55 (the "MONTHLY DEBT SERVICE PAYMENT AMOUNT")  due
and payable on the first day of January, 1999 and on each Payment
Date thereafter; each of such payments, to be applied (A) to the
payment  of interest computed at the Contract Rate and  (B)  the
balance applied toward reduction of the principal sum.  The constant 
payment required hereunder is calculated to pay the entire 
principal sum over a twenty-five (25) year  amortization
schedule.
          
          (b)   To the extent the Loan is outstanding, from  and
after the Anticipated Payment Date interest shall accrue on  the
unpaid  principal balance from time to time outstanding  on  the
Loan  at  the  Adjusted Rate.  Borrower shall continue  to  make
payments  of  principal  and interest  in  monthly  installments
beginning on the Anticipated Payment Date and on the first day of
each  calendar month thereafter up to and including the Maturity
Date  in  an  amount equal to the Monthly Debt  Service  Payment
Amount and, notwithstanding the following provision with respect
to Accrued Interest, the failure to make any such payment within
the   time  period  required  pursuant  to  Section  11.1  shall
constitute  an  Event  of Default.  Each  Monthly  Debt  Service
Payment Amount paid after the Anticipated Payment Date shall  be
applied to the payment of interest computed at the Contract Rate
with  remainder  applied  to  reduce the  outstanding  principal
balance  of  the Loan in accordance with Section  2.3(a)  above.
Interest  accrued  at the Adjusted Rate and not  paid  shall  be
deferred  and added to the Debt and shall earn interest  at  the
Adjusted  Rate to the extent permitted by applicable  law  (such
accrued  interest is hereinafter defined as "ACCRUED INTEREST").
In addition to such payments of principal and interest, from and
after the Anticipated Payment Date, Borrower shall make payments
in reduction of the outstanding principal balance of the Loan and
accrued  interest  in  monthly  installments  beginning  on  the
Anticipated  Payment Date and on the first day of each  calendar
month  thereafter  up  to and including  the  Maturity  Date  in
accordance with the terms and provisions of Section 3.5 below.
          
          (c)   MATURITY.  On the Maturity Date, Borrower  shall
                --------
pay  to  Lender  all outstanding principal, accrued  and  unpaid
interest (including Accrued Interest, if any), default interest,
late  charges and any and all other amounts due under  the  Loan
Documents.
          
          (d)   DEFAULT RATE.  From and after the occurrence and
                ------------
during the continuation of an Event of Default, Lender shall  be
entitled to receive and Borrower shall pay to Lender interest on
the entire unpaid principal sum and any other amounts due at the
Default  Rate.  Interest at the Default Rate shall  be  computed
from the occurrence of the Event of Default until the earliest of
(i)  Lender's express written waiver of such Event  of  Default,
(ii)  Lender's express written acceptance of Borrower's cure  of
such Event of Default or (iii) the actual receipt and collection
of the Debt (or that portion thereof that is then due).  Interest
at  the  Default Rate shall be added to the Debt  and  shall  be
secured by the Mortgages.  This section, however, shall  not  be
construed as an agreement or privilege to extend the date of the
payment of the Debt, nor as a waiver of any other right or remedy
accruing  to Lender by reason of the occurrence of any Event  of
Default.
          
          (e)   MAKING OF PAYMENTS.  Each payment  by  Borrower
                ------------------
hereunder  or  under  the Note shall be made  in  funds  settled
through the New York Clearing House Interbank Payments System or
other  funds immediately available to Lender by 1:00  p.m.,  New
York  City  time, on the date such payment is due, to Lender  by
deposit to such account as Lender may designate by written notice
to  Borrower.  Whenever any payment hereunder or under the 
Note shall be stated to be due on a day which is not a Business Day,
such payment shall be made on the first Business Day thereafter.
          
          (f)  COMPUTATIONS.  Interest payable hereunder or under
               ------------
the Note by Borrower shall be computed on the basis of a 360-day
year  consisting of twelve (12) months of thirty (30) days  each
except  that interest due and payable for a period less  than  a
full  month shall be calculated by multiplying the actual number
of days elapsed in such period by a daily rate based on said 360-
day year.
          
          (g)   LATE PAYMENT CHARGE.  If any principal, interest
                -------------------
or  any  other sums due under the Loan Documents is not paid  by
Borrower within five (5) days of (and including) the date it  is
due, Borrower shall pay to Lender upon demand an amount equal to
the lesser of five percent (5%) of such unpaid sum or the maximum
amount permitted by applicable law in order to defray the expense
incurred  by  Lender in handling and processing such  delinquent
payment and to compensate Lender for the loss of the use of such
delinquent  payment.  Any such amount shall be  secured  by  the
Mortgages and the other Loan Documents.
          
          (h)   ANNUAL BUDGET.  (a)  For the partial year period
                -------------
commencing  on  the  date  hereof, and for  each  calendar  year
thereafter, Borrower shall submit or cause Operating Lessees  to
submit to the Lender an Annual Budget not later than sixty  (60)
days prior to the commencement of such period or calendar year in
form  reasonably  satisfactory  to  Lender.  The  Annual  Budget
submitted for the calendar year in which the Anticipated Payment
Date  occurs  and  for  each calendar year thereafter  shall  be
subject to Lender's written approval (each such Annual Budget as
approved  by  Lender,  an "APPROVED ANNUAL BUDGET");  provided,
however, that, notwithstanding anything contained in this Section
2.3(h) to the contrary, the Annual Budget for the calendar  year
in which the Anticipated Payment Date occurs shall not be subject
to  Lender's written approval until and unless the Debt  is  not
repaid  in  full on the Anticipated Payment Date.  In the  event
that  Lender  objects to a proposed Annual Budget  submitted  by
Borrower  or Operating Lessees which requires Lender's approval,
Lender  shall advise Borrower and/or Operating Lessees  of  such
objections  within thirty (30) days after receipt  thereof  (and
deliver to such party a reasonably detailed description of  such
objections) and Borrower shall revise, or shall cause  Operating
Lessees to revise,  such Annual Budget and resubmit the same  to
Lender.  Lender shall advise Borrower of any objections to  such
revised Annual Budget within ten (10) days after receipt thereof
(and deliver to such party a reasonably detailed description  of
such  objections) and Borrower shall promptly revise,  or  cause
Operating  Lessees  to revise, the same in accordance  with  the
process  described in this subsection until Lender approves  the
Annual  Budget.  Until such time that Lender approves a proposed
Annual  Budget, the most recently Approved Annual  Budget  shall
apply;  provided  that,  such Approved Annual  Budget  shall  be
adjusted  to  reflect  actual increases in  real  estate  taxes,
insurance premiums and utilities expenses.
          
          (i)   CASH MANAGEMENT AGREEMENT.  Simultaneously  with
                -------------------------
the  execution  hereof  Borrower  has  entered  into  a  lockbox
agreement and a cash management agreement among Borrower, Lender,
any  Manager  and  one  or  more certain financial  institutions
(together  with  any  modifications or amendments  thereof,  are
hereinafter  collectively referred to as  the
"CASH MANAGEMENT AGREEMENT"), which provide, among other things, 
that all Operating Revenues and other sums collected from, or 
arising with respect to, the Properties be deposited in 
accordance with the Cash Management Agreement and that such 
amounts shall be disbursed in accordance with Section 3.5 hereof.
Borrower shall pay all costs and expenses required under the 
Cash Management Agreement.  Subject to Section 3.2, upon the  
occurrence and during the continuation of an Event of Default,
Lender may apply any sums then held pursuant to the Cash 
Management Agreement to the payment of the Debt in any order in 
its sole discretion.  Until expended or applied, amounts held 
pursuant to the Cash Management Agreement shall constitute 
additional security for the Debt.
          
          SECTION 2.4  PREPAYMENT; DEFEASANCE.
                       ----------------------
          
          (a)  PREPAYMENT.  Borrower shall repay any outstanding
               ----------
principal indebtedness of the Loan in full on the Maturity Date,
together  with  accrued  and unpaid  interest  thereon  to  (but
excluding)  the date of repayment.  Other than as set  forth  in
this Section 2.4, Borrower shall have no right to prepay all  or
any  portion of the Loan prior to the Anticipated Payment  Date.
On  any  scheduled Payment Date occurring no earlier than ninety
(90) days prior to the Anticipated Payment Date, Borrower may, at
its  option and upon thirty (30) days prior written notice  from
Borrower to Lender, prepay in whole or in part the Debt  without
payment of any premium.  Any such payment shall be applied to the
last payments of principal and interest due under the Loan.  Each
voluntary prepayment after the Anticipated Payment Date shall be
made  on  a  scheduled Payment Date and include all accrued  and
unpaid  interest up to but not including such scheduled  Payment
Date  or,  if  not  paid  on a scheduled Payment  Date,  include
interest that would have accrued on such prepayment through  the
next  regularly scheduled Payment Date. If more than sixty  (60)
days  prior  to  the  Anticipated Payment Date  and  during  the
continuation  of  any  Event of Default, Borrower  shall  tender
payment of an amount sufficient to satisfy all or any portion of
the Debt, such tender by Borrower shall be deemed to be voluntary
and may be accepted or rejected by Lender in its sole discretion.
If Lender accepts such tender, Borrower shall pay, in addition to
the Debt, the Lockout Yield Maintenance Premium.
          
          (b)   VOLUNTARY DEFEASANCE OF THE LOAN.   Provided  no
                --------------------------------
Event of Default exists and is continuing, at any time after the
Release  Date and prior to the Anticipated Payment Date Borrower
may  voluntarily  defease all or any  portion  of  the  Loan  by
providing  Lender  with U.S. Obligations that  produce  payments
which replicate the Scheduled Defeasance Payments (hereinafter, a
"DEFEASANCE EVENT").  Each Defeasance Event by Borrower shall be
subject   to   the  satisfaction  of  the  following  conditions
precedent:
               
               (i)   Borrower shall provide not less than thirty
(30)  days prior written notice to Lender specifying the Payment
Date (the "DEFEASANCE DATE") on which the Defeasance Event is to
occur.   Such notice shall indicate the principal amount of  the
Note to be defeased;
               
               (ii) Borrower shall pay to Lender all accrued and
unpaid interest on the principal balance of the Note to but  not
including the Defeasance Date.  If for any reason
the Defeasance Date is not a Payment Date, Borrower shall also 
pay interest that would have accrued on the Note through the 
next Payment Date;
               
               (iii)      Borrower shall pay to Lender all other
sums, not including scheduled interest or principal payments, due
under the Note, this Agreement, the Mortgage, and the other Loan
Documents;
               
               (iv)  Borrower shall pay to Lender  the  required
Defeasance Deposit for the Defeasance Event;
               
               (v)   In the event only a portion of the Loan  is
the  subject of the Defeasance Event, Borrower shall prepare all
necessary documents to amend and restate the Note and issue  two
substitute notes, one note having a principal balance  equal  to
the  defeased portion of the original Note (the "DEFEASED NOTE")
and  the  other  note having a principal balance  equal  to  the
undefeased  portion  of the Note (the "UNDEFEASED NOTE").   The
Defeased Note and Undefeased Note shall have identical terms  as
the  Note  except  for the principal balance.  A  Defeased  Note
cannot be the subject of any further Defeasance Event;
               
               (vi) Borrower shall execute and deliver a security
agreement, in form and substance satisfactory to Lender, creating
a  first  priority lien on the Defeasance Deposit and  the  U.S.
Obligations purchased with the Defeasance Deposit in  accordance
with   this   provision  of  this  Section  2.4  (the "SECURITY
AGREEMENT");
               
               (vii)      Borrower shall deliver an  opinion  of
counsel for Borrower in form satisfactory to Lender in its  sole
discretion stating, among other things, that Borrower has legally
and validly transferred and assigned the U.S. Obligations and all
obligations, rights and duties under and to the Note or Defeased
Note (as applicable) to the Successor Borrower, that Lender has a
perfected  first  priority security interest in  the  Defeasance
Deposit and the U.S. Obligations delivered by Borrower, and that
any REMIC Trust formed pursuant to a Securitization will not fail
to  maintain  its  status as a "real estate mortgage  investment
conduit"  within the meaning of Section 860D of the  Code  as  a
result of such Defeasance Event;
               
               (viii)     Borrower  shall  deliver  evidence  in
writing  from the applicable Rating Agencies to the effect  that
such  release  will not result in a downgrading,  withdrawal  or
qualification  of  the respective ratings in effect  immediately
prior  to  such  Defeasance Event for the Securities  issued  in
connection  with the Securitization which are then  outstanding.
If  required  by the applicable Rating Agencies, Borrower  shall
also deliver or cause to be delivered a non-consolidation opinion
with  respect  to the Successor Borrower in form  and  substance
satisfactory to Lender and the applicable Rating Agencies;
               
               (ix)   Borrower   shall  deliver   an   Officer's
Certificate certifying that the requirements set forth  in  this
Section 2.4(b) have been satisfied;
               
               (x)   Borrower shall deliver a certificate  of  a
"Big Six" or other nationally recognized public accounting firm,
acceptable  to  Lender  certifying  that the U.S.
Obligations purchased with the Defeasance Deposit generate monthly 
amounts equal to or greater than the required scheduled Defeasance
Payments;
               
               (xi)    Borrower   shall   deliver   such   other
certificates, documents or instruments as Lender may  reasonably
request; and
               
               (xii)      Borrower  shall  pay  all  costs   and
expenses  of  Lender incurred in connection with the  Defeasance
Event, including any costs and expenses associated with a release
of the lien of the Mortgage as provided in Section 2.5 hereof as
well as reasonable attorneys' fees and expenses.
          
          (c)  In connection with each Defeasance Event, Borrower
hereby appoints Lender as its agent and attorney-in-fact for the
purpose  of  using  the  Defeasance  Deposit  to  purchase  U.S.
Obligations which provide payments on or prior to, but as  close
as possible to, all successive scheduled payment dates after the
Defeasance  Date upon which interest and principal payments  are
required  under the Note, in the case of a Defeasance Event  for
the  entire  outstanding principal balance of the Loan,  or  the
Defeased  Note,  in the case of a Defeasance Event  for  only  a
portion  of  the outstanding principal balance of the  Loan,  as
applicable,  and in amounts equal to the scheduled interest  and
principal  payments  due on such dates under  the  Note  or  the
Defeased Note, as applicable, and assuming such Note or Defeased
Note  is  prepaid in full on the Anticipated Payment  Date  (the
"SCHEDULED DEFEASANCE PAYMENTS").  Borrower,  pursuant  to  the
Security Agreement or other appropriate document, shall authorize
and  direct that the payments received from the U.S. Obligations
may  be  made  directly to the Cash Management  Account  (unless
otherwise  directed  by  Lender)  and  applied  to  satisfy  the
obligations of Borrower under the Note or the Defeased Note,  as
applicable.  Any portion of the Defeasance Deposit in excess  of
the amount necessary to purchase the U.S. Obligations required by
this  Section 2.4 and satisfy Borrower's obligations under  this
Section 2.4 and Section 2.5 shall be remitted to Borrower.
          
          SECTION 2.5  RELEASE OF PROPERTY.  Except as set forth
                       -------------------
in  this Section 2.5, no repayment, prepayment or defeasance  of
all or any portion of the Note shall cause, give rise to a right
to  require, or otherwise result in, the release of the lien  of
the Mortgage on any Individual Property.
               
               (a)   RELEASE OF ALL THE PROPERTIES.   (i)   If
                     -----------------------------
Borrower  has  elected  to  defease  the  entire  Note  and  the
requirements  of  Section 2.4 have been satisfied,  all  of  the
Properties  shall be released from the liens of their respective
Mortgages  and  the  U.S. Obligations pledged  pursuant  to  the
Security  Agreement  shall  be the  sole  source  of  collateral
securing the Note.
               
               (ii)In  connection with the release of the liens,
Borrower shall submit to Lender, not less than thirty (30)  days
prior  to the Defeasance Date, an instrument releasing the  lien
(and  related  Loan Documents) for each Individual Property  for
execution by Lender.  Such release shall be in a form appropriate
in  each jurisdiction in which an Individual Property is located
and  satisfactory  to Lender in its reasonable  discretion.   In
addition, Borrower shall provide all other documentation  Lender
reasonably  requires to be delivered by Borrower in
connection with such release, together with an Officer's Certificate
certifying that such documentation (A) is in compliance with all
Legal  Requirements,  and  (B)  will  effect  such  releases  in
accordance with the terms of this Agreement.
               
               (b)   RELEASE OF INDIVIDUAL PROPERTIES.  Borrower
                     --------------------------------
on one or more occasions may obtain (i) the individual release of
an Individual Property from the lien of the Mortgage thereon (and
related  Loan  Documents)  and (ii) the  release  of  Borrower's
obligations  under  the  Loan Documents  with  respect  to  such
Individual Property (other than those expressly stated to survive
including  those set forth in the Hazardous Materials  Indemnity
Agreement),   upon  satisfaction  of  each  of   the   following
conditions:
               
               (i)   The principal balance of the Defeased  Note
shall  equal  or  exceed  the Adjusted Release  Amount  for  the
applicable  Individual  Property;  provided,  however,  if   the
outstanding principal balance of the Undefeased Note is less than
the  Adjusted Release Amount for the Individual Property  to  be
released, the Defeased Note shall be in an amount equal  to  the
outstanding principal balance of the Undefeased Note.
               
               (ii)  The  requirements of Section 2.4 (including
Section 2.4(b)(viii)) have been satisfied.
               
               (iii)     Lender shall have received (A) a copy of
a  deed conveying all of Borrower's right, title and interest in
and  to  the  Individual Property (x) to an  entity  other  than
Borrower   or  its  general  partner  or  managing  member   (as
applicable) in an arms' length transaction or (y) to the REIT or
the  Operating  Partnership  and  (B)  a  letter  from  Borrower
countersigned by a title insurance company acknowledging receipt
of such deed and agreeing to record such deed in the real estate
records  for  the  county  in which the Individual  Property  is
located.  In the event the Individual Property is to be conveyed
to the REIT or the Operating Partnership, Lender shall also have
received (a) a copy of a fully executed contract of sale between
the  REIT  or the Operating Partnership, as applicable,  and  an
entity  other than Borrower or a Borrower Party for the sale  of
the  Individual  Property in an arms' length transaction,  which
contract  of sale (i) at the time of release, is not subject  to
any  contingencies, except for the payment of the purchase price
by  the  purchaser and the delivery of title by the REIT or  the
Operating Partnership, as applicable and (ii) contains a closing
date  which is not more than thirty (30) days following the date
of the proposed substitution and (b) evidence that any good-faith
deposit  required under such contract of sale has been deposited
into escrow.
               
               (iv)  Borrower shall submit to Lender,  not  less
than  thirty  (30)  days prior to the date of such  release,  an
instrument  releasing the lien (and related Loan Documents)  for
such  Individual Property for execution by Lender.  Such release
shall be in a form appropriate in each jurisdiction in which the
Individual Property is located and satisfactory to Lender in its
sole  discretion.  In addition, Borrower shall provide all other
documentation  Lender reasonably requires  to  be  delivered  by
Borrower  in  connection  with such release,  together  with  an
Officer's Certificate certifying that such documentation (i)  is
in compliance with all Legal Requirements, (ii) will effect such
release in accordance with the terms of this Agreement, and (iii)
will not impair or otherwise adversely affect the liens, security
interests and other rights of Lender under the Loan Documents not
being  released (or as to the parties to the Loan Documents  and
Properties subject to the Loan Documents not being released).
               
               (v)  After giving effect to such release, the Debt
Service  Coverage Ratio for all of the Properties then remaining
subject  to  the liens of the Mortgages shall be  equal  to  the
greater  of  (i) the Debt Service Coverage Ratio for the  twelve
(12) full calendar months immediately preceding the Closing Date,
and  (ii)  the Debt Service Coverage Ratio for all of  the  then
remaining  Properties (including the Individual Property  to  be
released)  for the twelve (12) full calendar months  immediately
preceding the release of the Individual Property.
               
               (c)   SUCCESSOR BORROWER.  In connection with any
                     ------------------
release of a lien under this Section 2.5, Borrower may, or at the
request  of  Lender  shall, establish or designate  a  successor
entity  (the  "SUCCESSOR BORROWER"), which  shall  be  a  single
purpose bankruptcy remote entity approved by Lender, and Borrower
shall  transfer  and assign all obligations, rights  and  duties
under  and  to  the  Note or the Defeased Note,  as  applicable,
together  with  the pledged U.S. Obligations to  such  Successor
Borrower.   Such Successor Borrower shall assume the obligations
under  the  Note  or the Defeased Note, as applicable,  and  the
Security  Agreement  and  Borrower  shall  be  relieved  of  its
obligations under such documents.  Borrower shall pay $1,000  to
any  such  Successor Borrower as consideration for assuming  the
obligations  under the Note or the Defeased Note, as applicable,
and  the  Security Agreement.  Notwithstanding anything in  this
Agreement  to  the contrary, no other assumption  fee  shall  be
payable  upon  a transfer of the Note or the Defeased  Note,  as
applicable,  in accordance with this Section 2.5,  but  Borrower
shall  pay  all costs and expenses incurred by Lender, including
Lender's  attorneys' fees and expenses, incurred  in  connection
therewith.
          
          SECTION 2.6 SUBSTITUTION OF PROPERTIES. Subject to the
                      --------------------------
terms and conditions set forth in this Section 2.6, Borrower may
obtain a release of the lien of a Mortgage (and the related Loan
Documents)  encumbering an Individual Property  (a "SUBSTITUTED
PROPERTY") by substituting therefor its fee interest in  another
hotel  property  of like kind and quality acquired  by  Borrower
(individually,  a  "SUBSTITUTE PROPERTY" and  collectively,  the
"SUBSTITUTE PROPERTIES"), provided that no such substitution may
occur after the Anticipated Payment Date.  In addition, any such
substitution shall be subject, in each case, to the satisfaction
of the following conditions precedent:
          
          (i)  Lender shall have received (A) a copy of a deed conveying
               all of Borrower's right, title and interest in and to the
               Substituted Property (x) to an entity other than Borrower or its
               general partner or managing member (as applicable) in an arms'
               length transaction or (y) to the REIT or the Operating
               Partnership and (B) a letter from Borrower countersigned by a
               title insurance company acknowledging receipt of such deed and
               agreeing to record such deed in the real estate records for the
               county in which the Substituted Property is located.  In the
               event the Substituted Property is to be conveyed to the REIT or
               the Operating Partnership, Lender shall also have received (a) a
               copy of a fully executed contract of sale between the REIT or the
               Operating Partnership, as applicable, and an entity other than
               Borrower or a Borrower Party for the sale of the Substituted
               Property in an arms' length transaction, which contract of sale
               (i) at the time of substitution, is not subject to any
               contingencies, except for the payment of the purchase price by
               the purchaser and the delivery of title by the REIT or the
               Operating Partnership, as applicable and (ii) contains a closing
               date which is not more than thirty (30) days following the date
               of the proposed substitution and (b) evidence that any good-faith
               deposit required under such contract of sale has been deposited
               into escrow.
          
          (ii) If the Loan is part of a Securitization, Lender shall have
               received an MAI appraisal of the Substitute Property dated no
               more than forty-five (45) days prior to the substitution by an
               appraiser acceptable to Lender and the Rating Agencies,
               indicating an appraised value of the Substitute Property that is
               at least equal to the greater of the appraised value of the
               Substituted Property determined by Lender as of (A) the date
               hereof or (B) the date immediately preceding the encumbrance of
               the Substitute Property by the related Mortgage.  If the Loan is
               not part of a Securitization, Lender shall have determined that
               the fair market value of the Substitute Property is at least
               equal to the greater of the fair market value of the Substituted
               Property as of (A) the date hereof or (B) the date immediately
               preceding the encumbrance of the Substitute Property by the
               related Mortgage, such determination to be made by Lender in its
               sole reasonable discretion consistent with the methodology used
               by Lender in determining property values in connection with the
               origination of the Loan (which determination may include an
               appraisal satisfactory to Lender in all respects).
          
          (iii)After giving effect to the substitution, the Debt
               Service Coverage Ratio for the Loan for all of the Properties is
               not less than the Debt Service Coverage Ratio for the Loan for
               all of the Properties as of the date immediately preceding the
               substitution.
          
          (iv) The Net Operating Income for the Substitute Property either
               (A) does not show a successive decrease over the three (3) years
               immediately prior to the date of substitution, or (B) with
               respect to a Substitute Property for which information regarding
               the Net Operating Income of such Substitute Property for the
               three (3) years immediately prior to the date of substitution
               cannot be obtained by Borrower after Borrower's exercise of
               diligent efforts, the Net Operating Income shall not show a
               successive decrease for such lesser period of no less than twelve
               (12) months, or (C) if the Substitute Property has been
               substantially renovated within such three (3) year period, the
               Net Operating Income shall not show a successive decrease for
               such lesser period of no less than twelve (12) months.
   
          (v)  The Net Operating Income for the twelve (12) month period
               immediately preceding the substitution for the Substitute
               Property is equal to or greater than the Net Operating Income for
               the twelve (12) month period immediately preceding the
               substitution for the Substituted Property.
          
          (vi) If the Loan is part of a Securitization, Lender shall have
               received evidence in writing from the Rating Agencies to the
               effect that such substitution will not result in a withdrawal,
               qualification or downgrade of the respective ratings in effect
               immediately prior to such substitution for the Securities issued
               in connection with the Securitization that are then outstanding.
          
          (vii)No Event of Default shall have occurred and be
               continuing.  Lender and the Rating Agencies (if applicable) shall
               have received a certificate from Borrower confirming the
               foregoing.
          
          (viii)Borrower shall have executed, acknowledged and
               delivered to Lender (A) a Mortgage, an Assignment of Leases and
               two UCC Financing Statements with respect to the Substitute
               Property, together with a letter from Borrower countersigned by a
               title insurance company acknowledging receipt of such Mortgage,
               Assignment of Leases and UCC-1 Financing Statements and agreeing
               to record or file, as applicable, such Mortgage, Assignment of
               Leases and Rents and one of the UCC-1 Financing Statements in the
               real estate records for the county in which the Substitute
               Property is located and to file one of the UCC-1 Financing
               Statement in the office of the Secretary of State of the state in
               which the Substitute Property is located, so as to effectively
               create upon such recording and filing valid and enforceable liens
               upon the Substitute Property, of the requisite priority, in favor
               of Lender (or such other trustee as may be desired under local
               law), subject only to the Permitted Encumbrances and such other
               liens as are permitted pursuant to the Loan Documents, (B) an
               Environmental Indemnity with respect to the Substitute Property,
               (C) a Nondisturbance Agreement for the Substitute Property and
               (D) written confirmation from each Indemnitor and all Joinder
               Parties regarding such substitution.  The Mortgage, Assignment of
               Leases, UCC-1 Financing Statements and Environmental Indemnity
               shall be the same in form and substance as the counterparts of
               such documents executed and delivered with respect to the related
               Substituted Property subject to modifications reflecting the
               Substitute Property as the Individual Property that is the
               subject of such documents and such modifications reflecting the
               laws of the state in which the Substitute Property is located as
               shall be recommended by the counsel admitted to practice in such
               state and delivering the opinion as to the enforceability of such
               documents required pursuant to clause (xiv) below.  The Mortgage
               encumbering the Substitute Property shall secure all amounts
               evidenced by the Note, provided that in the event that the
               jurisdiction in which the Substitute Property is located imposes
               a mortgage recording, intangibles or similar tax and does not
               permit the allocation of indebtedness for the purpose of
               determining the amount of such tax payable, the principal amount
               secured by such Mortgage shall be equal to one hundred fifty
               percent (150%) of the amount of the Loan allocated to the
               Substitute Property.  The amount of the Loan allocated to the
               Substitute Property (such amount being hereinafter referred to as
               the "SUBSTITUTE RELEASE AMOUNT") shall equal the Adjusted Release
                    -------------------------
               Amount of the related Substituted Property.
          
          (ix) Lender shall have received (A) any "tie-in" or similar
               endorsement to each Title Insurance Policy insuring the lien of
               an existing Mortgage as of the date of the substitution available
               with respect to the Title Insurance Policy insuring the lien of
               the Mortgage with respect to the Substitute Property and (B) a
               Title Insurance Policy (or a marked, signed and redated
               commitment to issue such Title Insurance Policy) insuring the
               lien of the Mortgage encumbering the Substitute Property, issued
               by the title company that issued the Title Insurance Policies
               insuring the lien of the existing Mortgages and dated as of the
               date of the substitution, with reinsurance and direct access
               agreements that replace such agreements issued in connection with
               the Title Insurance Policy insuring the lien of the Mortgage
               encumbering the Substituted Property, to the extent such
               agreements are available in the jurisdiction in which the
               Substitute Property is located.  The Title Insurance Policy
               issued with respect to the Substitute Property shall (1) provide
               coverage in the amount of the Substitute Release Amount if the
               "tie-in" or similar endorsement described above is available or,
               if such endorsement is not available, in an amount equal to one
               hundred fifty percent (150%) of the Substitute Release Amount,
               (2) insure Lender that the relevant Mortgage creates a valid
               first lien on the Substitute Property encumbered thereby, free
               and clear of all exceptions from coverage other than Permitted
               Encumbrances and standard exceptions and exclusions from coverage
               (as modified by the terms of any endorsements), (3) contain such
               endorsements and affirmative coverages as are contained in the
               Title Insurance Policies insuring the liens of the existing
               Mortgages, to the extent available in the jurisdiction in which
               the Substitute Property is located and (4) name Lender as the
               insured.  Lender also shall have received copies of paid receipts
               showing that all premiums in respect of such endorsements and
               Title Insurance Policies have been paid.
          
          (x)  Lender shall have received a current title survey for each
               Substitute Property, certified to the title company and Lender
               and their successors and assigns, in the same form and having the
               same content as the certification of the Survey of the
               Substituted Property prepared by a 
               professional land surveyor licensed in the state in which the 
               Substitute Property is located
               and acceptable to the Rating Agencies in accordance with the 1992
               Minimum Standard Detail Requirements for ALTA/ACSM Land Title
               Surveys, including items 2, 3, 4, 6, 7, 8, 9, 10, 11 and 13 from
               Table A.  Such survey shall reflect the same legal description
               contained in the Title Insurance Policy relating to such
               Substitute Property and shall include, among other things, a
               metes and bounds description of the real property comprising part
               of such Substitute Property.  The surveyor's seal shall be
               affixed to each survey and each survey shall certify that the
               surveyed property is not located in a "one-hundred-year flood
               hazard area."
          
          (xi) Lender shall have received valid certificates of insurance
               indicating that the requirements for the policies of insurance
               required for an Individual Property hereunder have been satisfied
               with respect to the Substitute Property and evidence of the
               payment of all premiums payable for the existing policy period.
          
          (xii)     Lender shall have received a Phase I environmental
               report and, if recommended under the Phase I environmental
               report, a Phase II environmental report from a nationally
               recognized environmental consultant approved by Lender and, if a
               substitution occurs after a Securitization, approved by the
               Rating Agencies, not less than forty-five (45) days prior to such
               release and substitution, which conclude that the Substitute
               Property does not contain any Hazardous Substance (except for
               cleaning and other products used in connection with the routine
               maintenance or repair of the Substitute Property or the operation
               thereof as a hotel, in full compliance with Environmental Laws)
               and is not subject to any risk of contamination from any off-site
               Hazardous Substance.  If any such report discloses the presence
               of any Hazardous Substance (except for cleaning and other
               products used in connection with the routine maintenance or
               repair of the Substitute Property or the operation thereof as a
               hotel, in full compliance with Environmental Laws) or the risk of
               contamination from any off-site Hazardous Substance, such report
               shall include an estimate of the cost of any related remediation
               and Borrower shall deposit with Lender an amount equal to one
               hundred twenty-five percent (125%) of such estimated cost, which
               deposit shall constitute additional security for the Loan and
               shall be released to Borrower upon the delivery to Lender of (A)
               an update to such report indicating that there is no longer any
               Hazardous Substance (except for cleaning and other products used
               in connection with the routine maintenance or repair of the
               Substitute Property or the operation thereof as a hotel, in full
               compliance with Environmental Laws) on the Substitute Property or
               any danger of contamination from any off-site Hazardous Substance
               that has not been fully remediated in accordance 
               with all applicable laws and (B) paid receipts indicating that 
               the costs of all such remediation work have been paid.  Such 
               report shall also state the amount of time that will be
               necessary to complete  such remediation, as may be required by
               law.  Borrower covenants to undertake any repairs, cleanup or
               remediation indicated.
          
          (xiii) Borrower shall deliver or cause to be delivered to
               Lender (A) updates certified by Borrower of all organizational
               documentation related to Borrower and/or the formation,
               structure, existence, good standing and/or qualification to do
               business delivered to Lender in connection with the Closing Date;
               (B) good standing certificates, certificates of qualification to
               do business in the jurisdiction in which the Substitute Property
               is located (if required in such jurisdiction) and (C) resolutions
               of the general partner of Borrower authorizing the substitution
               and any actions taken in connection with such substitution.
          
          (xiv)     Lender shall have received the following opinions of
               Borrower's counsel (which opinions, with respect to the opinions
               set forth in clauses (A), (B) and (C) below, shall be in form
               similar to the corresponding opinions delivered in connection
               with the closing of the Loan):  (A) an opinion or opinions of
               counsel admitted to practice under the laws of the state in which
               the Substitute Property is located stating that the Loan
               Documents delivered with respect to the Substitute Property
               pursuant to clause (viii) above are valid and enforceable in
               accordance with their terms, subject to the laws applicable to
               creditors' rights and equitable principles, and that Borrower is
               qualified to do business and in good standing under the laws of
               the jurisdiction where the Substitute Property is located or that
               Borrower is not required by applicable law to qualify to do
               business in such jurisdiction; (B) an opinion of counsel stating
               that the Loan Documents delivered with respect to the Substitute
               Property pursuant to clause (viii) above were duly authorized,
               executed and delivered by Borrower and that, to the best of
               Borrower's counsel's knowledge, the execution and delivery of
               such Loan Documents and the performance by Borrower of its
               obligations thereunder will not cause a breach of, or a default
               under, any agreement, document or instrument to which Borrower is
               a party or to which it or its properties are bound; (C) an
               opinion of counsel stating that subjecting the Substitute
               Property to the lien of the related Mortgage and the execution
               and delivery of the related Loan Documents does not and will not
               affect or impair the ability of Lender to enforce its remedies
               under all of the Loan Documents or to realize the benefits of the
               cross-collateralization provided for thereunder; (D) an update of
               the Insolvency Opinion indicating that the substitution does not
               affect the opinions set forth therein; (E) an opinion of counsel
               acceptable to the Rating Agencies stating that the substitution
               and the related transactions do not constitute a fraudulent
               conveyance under applicable bankruptcy and insolvency laws and
               (F) an opinion of counsel acceptable to the Rating Agencies that
               the substitution does not constitute a "significant modification"
               of the Loan under Section 1001 of the Code or otherwise cause a
               tax to be imposed on a "prohibited transaction" by any REMIC
               Trust.
          
          (xv) Borrower shall have paid all Basic Carrying Costs relating
               to each of the Properties and the Substitute Property, including,
               without limitation, (i) accrued but unpaid insurance premiums
               relating to each of the Properties and the Substitute Property,
               (ii) currently due Taxes (including any in arrears) relating to
               each of the Properties and the Substitute Property and (iii) any
               other charges relating to each of the Properties and Substitute
               Property which are currently due.
          
          (xvi)     Borrower shall have paid or reimbursed Lender for all
               third party out-of-pocket costs and expenses incurred by Lender
               (including, without limitation, reasonable attorneys fees and
               disbursements) in connection with the substitution and Borrower
               shall have paid all recording charges, filing fees, taxes or
               other expenses (including, without limitation, mortgage and
               intangibles taxes and documentary stamp taxes) payable in
               connection with the substitution.  Borrower shall have paid all
               costs and expenses of the Rating Agencies incurred in connection
               with the substitution.
          
          (xvii)    Lender shall have received annual operating statements
               and occupancy statements for the Substitute Property for the
               three (3) most recently completed fiscal years and a current
               operating statement for the Substituted Property or, if
               information is not available for a three (3) year period or if
               the Substituted Property has been substantially renovated within
               such three (3) year period, such lesser period as is available,
               but in no event less than twelve (12) months.  Each of the
               statements required under this clause (xvii) shall be certified
               to Lender as being true and correct and a certificate from
               Borrower certifying that there has been no adverse change in the
               financial condition of the Substitute Property since the date of
               such operating statements.
          
          (xviii)   Borrower shall have delivered to Lender estoppel
               certificates from any Operating Lessees and other tenants of the
               Substitute Property.  All such estoppel certificates shall be in
               the form attached hereto as Schedule VII and shall indicate,
                                           ------------
               among other things, that (1) the subject lease is a valid and
               binding obligation of the tenant thereunder, (2) there are no
               defaults under such lease on the part of the landlord or tenant
               thereunder, (3) the tenant thereunder has no defense or offset to
               the payment of rent under such leases, (4) no rent under such
               lease has been paid more than one (1) month in advance, (5) the
               tenant thereunder has no option or right of first refusal under
               such lease to purchase all or any portion of the Substitute
               Property and (6) all tenant improvement work required under such
               lease has been completed and the tenant under such lease is in
               actual occupancy of its leased premises.  If an estoppel
               certificate indicates that all tenant improvement work required
               under the subject lease has not yet been completed, Borrower
               shall, if required by the Rating Agencies, deliver to Lender
               financial statements indicating that Borrower has adequate funds
               to pay all costs related to such tenant improvement work as
               required under such lease.
          
          (xix)     Lender shall have received copies of all tenant leases
               affecting the Substitute Property certified by Borrower as being
               true and correct.  Lender shall have received a current rent roll
               of the Substitute Property certified by Borrower as being true
               and correct.
          
          (xx) Lender shall have received a Nondisturbance Agreement with
               respect to all Operating Leases and subordination, nondisturbance
               and attornment agreements substantially in the form attached
               hereto as Schedule VIII (as such form may be amended by Lender
               consistent with prudent underwriting standards) with respect to
               any other leases which are not subordinate by their terms to the
               Mortgage with respect to the Substitute Property.
          
          (xxi)     Lender shall have received (A) an endorsement to the
               Title Insurance Policy insuring the lien of the Mortgage
               encumbering the Substitute Property insuring that the Substitute
               Property constitutes a separate tax lot or, if such an
               endorsement is not available in the state in which the Substitute
               Property is located, a letter from the title insurance company
               issuing such Title Insurance Policy stating that the Substitute
               Policy constitutes a separate tax lot or (B) a letter from the
               appropriate taxing authority stating that the Substitute Property
               constitutes a separate tax lot.
          
          (xxii)    Lender shall have received a Physical Conditions Report
               with respect to the Substitute Property from a nationally
               recognized structural consultant approved by the Rating Agencies
               in a form recognized and approved by rating agencies not less
               than forty-five (45) days prior to such release and substitution
               stating that the Substitute Property and its use comply in all
               material respects with all applicable Legal Requirements
               (including, without limitation, zoning, subdivision and building
               laws) and that the Substitute Property is in good condition and
               repair and free of damage or waste.  If compliance with any Legal
               Requirements are not addressed by the Physical Conditions Report,
               such compliance shall be confirmed by delivery to Lender of a
               certificate of an architect licensed in the state in which the
               Substitute Property is located, a letter from the municipality in
               which such Property is located, a certificate of a surveyor that
               is licensed in the state in which the Substitute Property is
               located (with respect to zoning and subdivision laws), an ALTA
               3.1 zoning endorsement to the Title Insurance Policy delivered
               pursuant to clause (ix) above (with respect to zoning laws) or a
               subdivision endorsement to the Title Insurance Policy delivered
               pursuant to clause (ix) above (with respect to subdivision laws)
               to the extent such endorsements are available in the jurisdiction
               in which the Substitute Property is located.  If the Physical
               Conditions Report recommends that any repairs be made with
               respect to the Substitute Property, such Physical Conditions
               Report shall either (A) include an estimate of the cost of such
               recommended repairs (in which case Borrower shall deposit into
               the Required Repair Fund an amount equal to one hundred twenty-
               five percent (125%) of such estimated cost), or (B) state the
               specific amounts that need to be reserved over time in order to
               meet the requirements of such replacements, but in no event less
               than five percent (5%) of gross revenues (in which case Borrower
               shall deposit such reserves into the Replacement Escrow Fund on a
               monthly basis).  Any such deposits shall constitute additional
               security for the Loan pursuant to Section 3.2 and shall be
               released to Borrower pursuant to Section 3.3.  Borrower covenants
               to undertake any repairs, cleanup or remediation indicated in the
               Physical Conditions Report before the earlier of (i) the time
               required by applicable law or (ii) the time recommended in the
               Physical Conditions Report.
          
          (xxiii)   Lender shall have received and approved each Operating
               Lease, Franchise Agreement and Management Agreement relating to
               the Substitute Property, provided, however, that Lender shall be
               deemed to have approved the non-economic provisions of the form
               of such Operating Lease or Franchise Agreement to the extent that
               such agreements are substantially similar (as determined by
               Lender in its reasonable discretion) to the agreements then in
               place at the Substituted Property.
          
          (xxiv)    Lender shall have received such other and further
               approvals, opinions, documents and information in connection with
               the substitution as the Rating Agencies may have requested.
          
          (xxv)     Lender shall have received copies of all contracts and
               agreements relating to the leasing and operation of the
               Substitute Property together with a certification of Borrower
               attached to each such contract or agreement certifying that the
               attached copy is a true and correct copy of such contract or
               agreement and all amendments thereto.
          
          (xxvi)    Borrower shall submit to Lender, not less than thirty
               (30) days prior to the date of such substitution, a release of
               lien (and related Loan Documents) for the Substituted Property
               for execution by Lender.  Such release shall be in a form
               appropriate for the jurisdiction in which the Substituted
               Property is located.  Borrower shall deliver an Officer's
               Certificate certifying that the requirements set forth in this
               Section 2.6 have been satisfied.

Upon  the  satisfaction  of the foregoing conditions  precedent,
Lender will release its lien from the Substituted Property to be
released  and the Substitute Property shall be deemed to  be  an
Individual  Property  for purposes of  this  Agreement  and  the
Substitute  Release  Amount  with  respect  to  such  Substitute
Property shall be deemed to be the Release Amount with respect to
such Substitute Property for all purposes hereunder.
                                
                                
                            ARTICLE 3
                                
             SECURITY; RESERVES AND CASH MANAGEMENT
             --------------------------------------
          
          SECTION 3.1  SECURITY; ESTABLISHMENT OF FUNDS. The Loan
                       --------------------------------
shall  be  evidenced by the Note of Borrower,  in  the  original
principal amount of the Loan.  The Loan shall be secured by  the
Mortgages creating a first lien on the Properties, the Assignment
of  Leases  and Rents and the other Loan Documents.  As  further
security for the Loan, Borrower agrees to establish the following
reserves with Lender, to be held by Lender as security  for  the
Loan:
          
          (a)   REQUIRED REPAIRS FUND.   On  the  date  hereof,
                ---------------------
Borrower  shall deposit with Lender the amount of $178,375  (the
"REQUIRED REPAIR FUND") to perform the required repairs set forth
on Schedule II annexed hereto by the deadlines set forth in such
   -----------
Schedule (which deadlines shall in no event be later than six (6)
months from the date hereof).
          
          (b)   REPLACEMENT ESCROW FUND.  Borrower shall deposit
                -----------------------
with Lender on each Payment Date one-twelfth of five percent (5%)
of the gross revenue derived from the Properties for replacements
and  repairs  required  to be made to  the  Properties  and  the
furniture,  fixtures and equipment located  thereon  during  the
calendar year (the "REPLACEMENT ESCROW FUND").  Such computation
shall be based upon the gross revenue derived from the Properties
for the prior calendar year, as reasonably determined by Lender,
and shall be subject to adjustment by Lender from time to time in
its reasonable discretion to reflect actual gross revenue derived
from the Properties for the current calendar year.
          
          (c)   DEBT SERVICE ESCROW FUND.  On the date  hereof,
                ------------------------
Borrower shall deposit the amount of $1,037,849.10 with  Lender,
which shall be deposited with and held by Lender as a reserve for
debt service payments due under this Agreement and the Note (the
"DEBT SERVICE ESCROW FUND").  In the event that Lender withdraws
funds from the Debt Service Escrow Fund for payment of any  debt
service, Borrower shall deposit the amount so withdrawn into the
Debt Service Escrow Fund within three (3) Business Days.
          
          SECTION  3.2   PLEDGE AND GRANT OF SECURITY INTEREST.
                         -------------------------------------
Borrower hereby pledges to Lender, and grants a security interest
in, any and all monies now or hereafter deposited in 
the Funds as additional security for the payment of the Loan.  
Borrower shall not, without obtaining the prior written consent of
Lender, further pledge, assign or grant any security interest in the
Funds  or permit any lien or encumbrance to be attached thereto,
or any levy to be made thereon, or any UCC-1 Financing Statements
(except  those naming Lender as the secured party) to  be  filed
with  respect thereto.  The Funds shall be held in Lender's name
in a money market interest bearing account and may be commingled
with  Lender's own funds at financial institutions  selected  by
Lender  in  its sole discretion.  Interest earned on  the  Funds
shall  be  added  back into the Funds; provided,  however,  that
Lender  shall not be obligated to obtain any specified  rate  of
return and Lender shall not be liable for any loss of principal,
for which Borrower shall bear the full risk.  Upon the occurrence
and  during the continuation of an Event of Default, Lender  may
apply  any sums then present in the Funds to the payment of  the
Loan in any order in its sole discretion; provided, however, that
Lender  shall  not apply any sums then present in the  Funds  to
reduce  the outstanding principal amount of the Note until  such
time  as  Lender  has accelerated the Loan.  Until  expended  or
applied as above provided, the Funds shall constitute additional
security for the Loan.
          
          SECTION  3.3  DISBURSEMENT OF FUNDS.   From and  after
                        ---------------------
the Anticipated Payment Date, Lender may reassess its estimate of
the  amount  necessary for the Funds from time to time  and  may
adjust  any  monthly amounts required to be deposited  into  the
Funds  upon  thirty (30) days notice to Borrower.  Lender  shall
make  disbursements,  within five (5)  Business  Days  following
Lender's receipt of all documentation required to be delivered to
Lender  pursuant  to this Section 3.3, from the Required  Repair
Fund  and  the Replacement Escrow Fund as requested by Borrower,
and  approved by Lender in its reasonable discretion,  not  more
frequently than three times during any calendar month in amounts,
in  the  aggregate, of no less than $10,000.00 upon delivery  by
Borrower of Lender's standard form of draw request accompanied by
copies of paid invoices in excess of $15,000; provided, however,
that   upon  Lender's  receipt  of  all  documentation  required
hereunder, Lender shall disburse up to $300,000 in the aggregate
with  respect to any disbursement based upon unpaid invoices  in
such amount, provided that with respect to any unpaid invoice in
an  amount exceeding $25,000 Lender may, at its option, issue  a
joint check and provided further that, it shall be a condition to
the next requested disbursement that Borrower provide Lender with
paid  copies of such unpaid invoices for which Lender  has  made
disbursements.   Any  draw request for work  costing  less  than
$15,000  shall be accompanied by either an officer's certificate
stating that the work has been completed or a paid invoice.   If
required  by  Lender, Borrower shall deliver  lien  waivers  and
releases from all parties furnishing materials and/or services in
connection  with the requested payment.  Lender may  require  an
inspection  of the Properties prior to making a disbursement  in
order to verify completion of replacements and repairs for which
reimbursement is sought; provided that (i) Borrower shall not be
required to pay for the cost of any such inspection, and (ii) an
inspection shall not be a condition to disbursements if the draw
request  (A)  is  for  less than $100,000  and  (B)  is  not  in
connection  with  any  improvements or repairs  that  require  a
building  permit or similar governmental approval  and  cost  in
excess  of $50,000.  Lender shall have no obligation to  release
any  of  the  Funds  while any Event of Default  is  continuing.
Lender may apply any amounts in the Debt Service Escrow Fund for
debt  service payments and required reserve, escrow and  impound
payments  and any other amounts then due and owing  by  Borrower
under this Agreement or any other Loan Document.

All costs and expenses incurred by Lender in the disbursement of 
any of the Funds shall be paid by Borrower promptly upon demand.
          
          SECTION 3.4  INTENTIONALLY OMITTED.
                       ---------------------
          
          SECTION  3.5  CASH MANAGEMENT ACCOUNT.  (a)   Borrower
                        -----------------------
shall establish and maintain a segregated Eligible Account  (the
"CASH MANAGEMENT ACCOUNT"), which Cash Management Account shall
be subject to the Cash Management Agreement.  The Cash Management
Account  shall be entitled "CMF CAPITAL COMPANY, LLC, as Lender,
pursuant to Loan Agreement dated as of November 3, 1998  -  Cash
Management  Account."  Borrower shall deposit, and shall  direct
each  Operating  Lessee  to  deposit all  Operating  Lease  Rent
directly into the Cash Management Account.  In addition, Borrower
shall  deliver  written instructions to any other tenants  under
Leases and, in the event an Operating Lease is not in effect for
an Individual Property, to any applicable credit card companies,
to  deliver all Rents payable to Borrower thereunder directly to
the  Cash  Management  Account and Borrower  shall  deposit  all
amounts  received by Borrower constituting Rents into  the  Cash
Management Account promptly upon receipt.  Borrower hereby grants
to  Lender  a  first  priority security  interest  in  the  Cash
Management Account and all deposits at any time contained therein
and the proceeds thereof and will take all actions necessary  to
maintain  in favor of Lender a perfected first priority security
interest  in  the  Cash Management Account,  including,  without
limitation, executing and filing UCC-1 Financing Statements  and
continuations thereof.  Borrower will not in any  way  alter  or
modify the Cash Management Account and will notify Lender of the
account number thereof.  All withdrawals from the Cash Management
Account  shall  be made in accordance with the  Cash  Management
Agreement  and  all  costs  and expenses  for  establishing  and
maintaining  the  Cash  Management  Account  shall  be  paid  by
Borrower.
          
          (b)   Provided no Event of Default shall have occurred
and  be continuing, on the first day of each calendar month (or,
if  such day is not a Business Day, on the immediately preceding
Business  Day)  all funds distributed to Lender  from  the  Cash
Management Account shall be applied by Lender to the payment  of
the following items in the order indicated:
               
               (i)   First,  payments to the Tax  and  Insurance
Escrow  Fund  in  accordance with the terms  and  conditions  of
Section 5.4 hereof;
               
               (ii)  Second, payment of the Monthly Debt Service
Payment Amount, applied first to the payment of interest computed
at the Contract Rate with the remainder applied to the reduction
of the outstanding principal balance of the Note;
               
               (iii)      Third,  payments  to  the  Replacement
Escrow Fund in accordance with the terms and conditions hereof;
               
               (iv)  Fourth,  payment to  Lender  of  any  other
amounts then due and payable under the Loan Documents (other than
Accrued Interest);
               
               (v)   Fifth, on or after the Anticipated  Payment
Date,  payments for monthly Cash Expenses incurred in accordance
with  the  related Approved Annual Budget pursuant to a  written 
request  for payment submitted by Borrower to Lender  specifying
the individual Cash Expenses in a form acceptable to Lender;
               
               (vi)  Sixth, on or after the Anticipated  Payment
Date, payments for Extraordinary Expenses approved by Lender, if
any;
               
               (vii)      Seventh,  on or after the  Anticipated
Payment Date, payments to Lender in reduction of the outstanding
principal balance of the Loan; and
               
               (viii)     Eighth,  on or after  the  Anticipated
Payment Date, payments to Lender for Accrued Interest.
          
          (c)  The insufficiency of funds on deposit in the Cash
Management  Account shall not absolve Borrower of the obligation
to make any payments, as and when due pursuant to this Agreement
and  the  other  Loan Documents, and such obligations  shall  be
separate  and independent, and not conditioned on any  event  or
circumstance whatsoever.
          
          (d)  Subject to Section 3.2, all amounts on deposit in
the  Cash Management Account during the continuation of an Event
of Default may be applied by Lender in such order and priority as
Lender shall determine.
          
          SECTION   3.6   PAYMENTS RECEIVED UNDER THE CASH 
                          --------------------------------
MANAGEMENT AGREEMENT.  Notwithstanding anything to the  contrary
--------------------
contained  in  this Agreement or the other Loan  Documents,  and
provided  no  Event of Default has occurred and  is  continuing,
Borrower's  obligations with respect to the monthly  payment  of
principal and interest and amounts due for the Tax and Insurance
Escrow Fund, Required Repair Fund, Replacement Escrow Fund,  the
Debt   Service  Escrow  Fund  and  any  other  payment  reserves
established pursuant to this Agreement or any other Loan Document
shall  be deemed satisfied to the extent sufficient amounts  are
deposited in the Cash Management Account established pursuant to
the Cash Management Agreement to satisfy such obligations on the
dates each such payment is required, regardless of whether any of
such amounts are so applied by Lender.
                                
                                
                            ARTICLE 4
                                
                      CONDITIONS PRECEDENT
                      --------------------
          
          SECTION  4.1   CLOSING CONDITIONS.  The obligation  of
                         ------------------
Lender  to make the Loan hereunder is subject to the fulfillment
by  Borrower  or  waiver by Lender of the  following  conditions
precedent no later than the Closing Date:
          
          (a)   REPRESENTATIONS AND WARRANTIES; COMPLIANCE WITH
                -----------------------------------------------
CONDITIONS.   The  representations and  warranties  of  Borrower
----------
contained in this Agreement and the other Loan Documents shall be
true  and  correct in all material respects on  and  as  of  the
Closing  Date with the same effect as if made on and as of  such
date,  and  no  Event  of Default shall  have  occurred  and  be
continuing; and Borrower shall be in compliance in all  material
respects  with  all  terms  
and conditions set forth in this Agreement and  in each other 
Loan Document on its part to be observed or performed.
          
          (b)   LOAN AGREEMENT AND NOTE.   Lender  shall  have
                -----------------------
received  a  copy of this Agreement and the Note, in each  case,
duly executed and delivered on behalf of Borrower.
          
          (c)   DELIVERY OF LOAN DOCUMENTS; TITLE INSURANCE;
                --------------------------------------------
REPORTS; LEASES.
---------------
               
               (i)  MORTGAGES, ASSIGNMENTS OF LEASES, ASSIGNMENTS
                    ---------------------------------------------
OF AGREEMENTS.  Lender shall have received from Borrower  fully
-------------
executed and acknowledged counterparts of the Mortgages and  the
Assignments  of  Leases relating to each of the  Properties  and
evidence  that counterparts of the Mortgages and Assignments  of
Leases have been delivered to the title company for recording, in
the  reasonable judgment of Lender, so as to effectively  create
upon  such  recording  valid  and enforceable  liens  upon  such
Properties,  of the requisite priority, in favor of  Lender  (or
such  other  trustee as may be required or desired  under  local
law),  subject only to the Permitted Encumbrances and such other
Liens  as are permitted pursuant to the Loan Documents.   Lender
shall   have   also  received  from  Borrower   fully   executed
counterparts of the other Loan Documents.
               
               (ii) TITLE INSURANCE.  Lender shall have received
                    ---------------
title insurance policies issued by a title company acceptable to
Lender  and dated as of the Closing Date.  Such title  insurance
policies shall (A) provide coverage in the maximum amount of the
Loan,  (B)  insure Lender that the relevant Mortgage  creates  a
valid lien on the Individual Property encumbered thereby of  the
requisite  priority,  free  and clear  of  all  exceptions  from
coverage   other  than  Permitted  Encumbrances   and   standard
exceptions and exclusions from coverage (as modified by the terms
of  any  endorsements), (C) name Lender as the insured  and  (D)
contain  the following endorsements and/or affirmative coverages
(to the extent available in the relevant jurisdictions): (a) ALTA
9 Comprehensive, (b) Survey, (c) ALTA 3.1 Zoning (with additional
coverage for number and types of parking spaces), (d) Usury, (e)
Doing   Business,  (f)  Access,  (g)  Separate  Tax   Lot,   (h)
Environmental Protection Lien, (i) Subdivision, (j)  Contiguity,
(k)  Tax  Deed (as applicable), (l) Mortgage Recording  Tax  (as
applicable), (m) PUD (as applicable) and (n) tie-in endorsements.
If  tie-in endorsements are not available in a particular state,
the  title  insurance policy for each Property located  in  such
state  shall be in an amount equal to 125% of the value of  such
Property and each such policy shall contain last dollar and first
loss  endorsements.   The  title  insurance  policies  shall  be
assignable.  Lender also shall have received evidence  that  all
premiums  in respect of such title insurance policies have  been
paid.
               
               (iii)      SURVEY.  Lender shall have received  a
                          ------
current title survey for each Individual Property, certified  to
the title company and Lender and their successors and assigns, in
form  and  content  satisfactory to Lender  and  prepared  by  a
professional and properly licensed land surveyor satisfactory to
Lender   in   accordance  the  1992  Minimum   Standard   Detail
Requirements for ALTA/ACSM Land Title Surveys.  The survey should
meet  the  classification of an "Urban Survey" and the following
additional   items   from   the   list   of   "Optional   Survey
Responsibilities and Specifications" (Table A) should be added to
each  survey:  2, 3, 4, 6, 7, 8, 9, 10, 11 and 13.  Such  survey
shall  reflect the same legal description contained in the title
insurance policies relating to such Individual Property referred
to in clause (ii) above and shall include, among other things, a
metes and bounds description of the real property comprising part
of  such  Individual Property reasonably satisfactory to Lender.
The  surveyor's  seal shall be affixed to each  survey  and  the
surveyor shall provide a certification for each survey  in  form
and substance acceptable to Lender.
               
               (iv) INSURANCE.  Lender shall have received valid
                    ---------
certificates of insurance for the policies of insurance required
hereunder,  satisfactory to Lender in its sole  discretion,  and
evidence of the payment of all premiums payable for the existing
policy period.
               
               (v)   ENVIRONMENTAL REPORTS.  Lender  shall  have
                     ---------------------
received  an environmental report in respect of each  Individual
Property, in each case satisfactory to Lender.
               
               (vi)  ZONING.   With respect to  each  Individual
                     ------
Property,  Lender shall have received, at Lender's  option,  (i)
letters  or  other  evidence  with respect  to  each  Individual
Property  from the appropriate municipal authorities  (or  other
Persons) concerning applicable zoning and building laws, (ii) an
ALTA  3.1  zoning endorsement for the applicable title insurance
policy, or (iii) a zoning opinion letter, in substance reasonably
satisfactory to Lender.
               
               (vii)  ENCUMBRANCES.  Borrower shall have taken
                      ------------
or  caused  to  be taken such actions in such a manner  so  that
Lender  has a valid and perfected lien of the requisite priority
as  of  the  Closing Date with respect to each Mortgage  in  the
applicable  Individual  Property,  subject  only  to  applicable
Permitted  Encumbrances and such other Liens  as  are  permitted
pursuant  to the Loan Documents, and Lender shall have  received
satisfactory evidence thereof.
          
          (d)   RELATED DOCUMENTS.  Each additional document not
                -----------------
specifically referenced herein, but relating to the transactions
contemplated  herein, shall have been duly authorized,  executed
and  delivered  by  all parties thereto and  Lender  shall  have
received and approved certified copies thereof.
          
          (e)   DELIVERY OF ORGANIZATIONAL DOCUMENTS.   On  or
                ------------------------------------
before the Closing Date, Borrower shall deliver or cause  to  be
delivered  to  Lender (i) copies certified by  Borrower  of  all
organizational  documentation related  to  Borrower  and/or  the
formation,   structure,   existence,   good   standing    and/or
qualification  to  do business, as Lender  may  request  in  its
reasonable  discretion,  including,  without  limitation,   good
standing  certificates, qualifications to  do  business  in  the
appropriate jurisdictions, resolutions authorizing the  entering
into of the Loan and incumbency certificates as may be requested
by Lender.
          
          (f)  OPINIONS OF BORROWER'S COUNSEL.  Lender shall have
               ------------------------------
received opinions of Borrower's counsel (i) with respect to non-
consolidation and (ii) with respect to due execution, authority,
enforceability of the Loan Documents and such other  matters  as
Lender may reasonably require, all such opinions in form,  scope
and  substance  satisfactory to Lender and Lender's  counsel  in
their reasonable discretion.

          (g)   COMPLETION OF PROCEEDINGS.  All  corporate  and
                -------------------------
other  proceedings taken or to be taken in connection  with  the
transactions  contemplated  by this  Agreement  and  other  Loan
Documents  and  all  documents  incidental  thereto   shall   be
satisfactory  in form and substance to Lender, and Lender  shall
have received all such counterpart originals or certified copies
of such documents as Lender may reasonably request.
          
          (h)   PAYMENTS.   All  payments, deposits  or  escrows
                --------
required  to  be  made  or established by  Borrower  under  this
Agreement, the Note and the other Loan Documents on or before the
Closing Date shall have been paid.
          
          (i)   FRANCHISOR ESTOPPEL.  Lender shall have received
                -------------------
an executed franchisor estoppel letter which shall be in form and
substance  reasonably satisfactory to Lender from the franchisor
under each of the franchise agreements listed on Schedule IV.
          
          (j)  TENANT ESTOPPELS.  Lender shall have received  an
               ----------------
executed  tenant estoppel letter, which shall  be  in  form  and
substance  reasonably satisfactory to Lender, from each  of  the
Operating  Lessees listed on Schedule V, and  any  other  tenant
requested by Lender.
          
          (k)  Intentionally Omitted.
          
          (l)   BASIC CARRYING COSTS.  Borrower shall have  paid
                --------------------
all Basic Carrying Costs relating to each of the Properties which
are in arrears.
          
          (m)   TRANSACTION COSTS.  Borrower shall have paid  or
                -----------------
reimbursed Lender for all title insurance premiums and recording
and  filing fees incurred in connection with the origination  of
the Loan.
          
          (n)  MATERIAL ADVERSE CHANGE.  There shall have been no
               -----------------------
material  adverse change in the financial condition or  business
condition  of  Borrower, any Operating Lessee or any  Individual
Property  since the date of the most recent financial statements
delivered to Lender.  The income and expenses of the Properties,
the  Operating Leases, the Franchise Agreements, and  all  other
features  of the transaction shall be as represented  to  Lender
without  material  adverse  change.  Neither  Borrower  nor  any
Operating  Lessee  shall  be  the  subject  of  any  bankruptcy,
reorganization, or insolvency proceeding.
          
          (o)   LEASES.   Lender shall have received  copies  of
                ------
Operating  Leases, all tenant Leases, certified  copies  of  any
tenant Leases as requested by Lender and certified copies of all
ground Leases affecting any Individual Property.
          
          (p)   NONDISTURBANCE AGREEMENTS.   Lender  shall  have
                -------------------------
received  Nondisturbance Agreements acceptable  to  Lender  with
respect to each Operating Lease.
          
          (q)  TAX LOT.  Lender shall have received evidence that
               -------
each  Individual Property constitutes a separate tax lot,  which
evidence  shall be reasonably satisfactory in form and substance
to Lender.

          (r)   PHYSICAL CONDITIONS REPORTS.  Lender shall  have
                ---------------------------
received  Physical  Conditions  Reports  with  respect  to  each
Individual   Property,  which  reports   shall   be   reasonably
satisfactory in form and substance to Lender.
          
          (s)  MANAGEMENT AGREEMENT.  Lender shall have received
               --------------------
a  certified  copy of any Management Agreement, which  shall  be
satisfactory in form and substance to Lender.
          
          (t)    APPRAISAL.   Lender  shall  have  received   an
                 ---------
appraisal   of   each  Individual  Property,  which   shall   be
satisfactory in form and substance to Lender.
          
          (u)  FINANCIAL STATEMENTS.  Lender shall have received
               --------------------
a  balance sheet with respect to the Properties for the two most
recent calendar years and statements of income and statements of
cash  flows  with respect to the Properties for the  three  most
recent calendar years.
          
          (v)  FRANCHISE AGREEMENTS. Lender shall have received a
               --------------------
certified copy of each Franchise Agreement between the Operating
Lessee  and  the  Franchisor  with respect  to  each  Individual
Property,  which shall be satisfactory in form and substance  to
Lender.
          
          (w)   OPERATING LEASES.  Lender shall have received  a
                ----------------
certified copy of each Operating Lease between Borrower and  the
Operating Lessee with respect to each Individual Property, which
shall be satisfactory in form and substance to Lender.
          
          (x)   FURTHER DOCUMENTS.  Lender or its counsel  shall
                -----------------
have  received  such  other  and  further  approvals,  opinions,
documents  and  information as Lender or its  counsel  may  have
reasonably  requested and the form and content of all  the  Loan
Documents.
                                
                                
                            ARTICLE 5
                                
              INSURANCE, CONDEMNATION, AND IMPOUNDS
              -------------------------------------
          
          SECTION 5.1  INSURANCE; CASUALTY AND CONDEMNATION.
                       ------------------------------------
          
          (a)  Borrower shall obtain and maintain, or cause to be
maintained,  insurance for Borrower and each of  the  Individual
Properties providing at least the following coverages:
               
               (i)   comprehensive  all risk  insurance  on  the
Improvements and the Personalty, including contingent  liability
from  Operation of Building Laws, Demolition Costs and Increased
Cost of Construction Endorsements, in each case (A) in an amount
equal  to  one  hundred percent (100%) of the "Full  Replacement
Cost,"  which for purposes of this Agreement shall  mean  actual
replacement   value   (exclusive  of   costs   of   excavations,
foundations, underground utilities and footings) with a waiver of
depreciation, but the amount shall in no event be less than  the
outstanding  principal balance of the Loan;  (B)  containing  an
agreed  amount endorsement with respect to the Improvements  and
Personalty waiving all co-insurance provisions; (C) providing for
no  deductible  in  excess of Ten Thousand  and  No/100  Dollars
($10,000) for all such insurance coverage; and (D) containing an
"Ordinance or Law Coverage" or "Enforcement" endorsement if  any
of  the Improvements or the use of the Individual Property shall
at  any time constitute legal non-conforming structures or uses.
In  addition, Borrower shall obtain: (y) if any portion  of  the
Improvements is currently or at any time in the future located in
a federally designated "special flood hazard area", flood hazard
insurance in an amount equal to the lesser of (1) the outstanding
principal balance of the Note or (2) the maximum amount of  such
insurance  available under the National Flood Insurance  Act  of
1968,  the Flood Disaster Protection Act of 1973 or the National
Flood  Insurance Reform Act of 1994, as each may be  amended  or
such  greater amount as Lender shall require; and (z) earthquake
insurance  in amounts and in form and substance satisfactory  to
Lender in the event the Individual Property is located in an area
with  a  high  degree  of seismic activity,  provided  that  the
insurance  pursuant to clauses (y) and (z) hereof  shall  be  on
terms consistent with the comprehensive all risk insurance policy
required under this subsection (i).
               
               (ii)   commercial  general  liability   insurance
against  claims  for personal injury, bodily  injury,  death  or
property  damage  occurring upon, in  or  about  the  Individual
Property, such insurance (A) to be on the so-called "occurrence"
form  with  a  combined limit of not less than Two  Million  and
No/100 Dollars ($2,000,000) in the aggregate and One Million and
No/100  Dollars ($1,000,000) per occurrence; (B) to continue  at
not less than the aforesaid limit until required to be changed by
Lender in writing by reason of changed economic conditions making
such  protection  inadequate; and (C)  to  cover  at  least  the
following hazards:  (1) premises and operations; (2) products and
completed  operations  on  an "if any"  basis;  (3)  independent
contractors;  (4) blanket contractual liability  for  all  legal
contracts; and (5) contractual liability covering the indemnities
contained  in  the  Loan Documents to the  extent  the  same  is
available;
               
               (iii)     business income insurance (A) with loss
payable to Lender; (B) covering all risks required to be covered
by  the  insurance  provided for in subsection  (i)  above;  (C)
containing  an  extended period of indemnity  endorsement  which
provides  that  after the physical loss to the Improvements  and
Personalty has been repaired, the continued loss of income  will
be insured until such income either returns to the same level it
was at prior to the loss, or the expiration of twelve (12) months
from the date that the applicable Individual Property is repaired
or  replaced and operations are resumed, whichever first occurs,
and  notwithstanding that the policy may expire prior to the end
of such period; and (D) in an amount equal to one hundred percent
(100%) of the projected gross income from the Individual Property
for  a  period  of eighteen (18) months from the date  that  the
Individual  Property is repaired or replaced and operations  are
resumed.  The amount of such business income insurance shall  be
determined prior to the date hereof and at least once each  year
thereafter based on Borrower's reasonable estimate of the  gross
income from the applicable Individual Property for the succeeding
eighteen  (18)  month period.  All proceeds  payable  to  Lender
pursuant to this subsection shall be held by Lender and shall be
applied  to  the obligations secured by the Loan Documents  from
time  to  time  due and payable hereunder and  under  the  Note;
provided, however, that nothing herein contained shall be deemed
to  relieve  Borrower of its obligations to pay the  obligations
secured by the Loan Documents on the respective dates of payment
provided for in the Note and the other Loan Documents except  to
the extent such amounts are actually paid out of the proceeds of
such business income insurance;

               (iv)   at   all  times  during  which  structural
construction, repairs or alterations are being made with respect
to the Improvements, and only if the Individual Property coverage
form  does  not  otherwise  apply,  (A)  owner's  contingent  or
protective liability insurance covering claims not covered by or
under  the terms or provisions of the above mentioned commercial
general  liability  insurance  policy;  and  (B)  the  insurance
provided  for  in subsection (i) above written  in  a  so-called
builder's risk completed value form (1) on a non-reporting basis,
(2) against all risks insured against pursuant to subsection (i)
above,   (3)  including  permission  to  occupy  the  Individual
Property, and (4) with an agreed amount endorsement waiving  co-
insurance provisions;
               
               (v)    workers'  compensation,  subject  to   the
statutory limits of the state in which the Individual Property is
located, and employer's liability insurance with a limit  of  at
least  Five  Hundred Thousand and No/100 Dollars ($500,000)  per
accident and per disease per employee, and Five Hundred Thousand
and  No/100  Dollars ($500,000) for disease in the aggregate  in
respect  of  any  work or operations on or about the  Individual
Property, or in connection with the Individual Property  or  its
operation (if applicable);
               
               (vi) comprehensive boiler and machinery insurance,
if  applicable,  in amounts as shall be reasonably  required  by
Lender on terms consistent with the commercial property insurance
policy required under subsection (i) above;
               
               (vii)      umbrella  liability  insurance  in  an
amount   not   less  than  Fifty  Million  and  No/100   Dollars
($50,000,000)  per  occurrence  on  terms  consistent  with  the
commercial  general  liability insurance policy  required  under
subsection (ii) above;
               
               (viii)    motor vehicle liability coverage for all
owned  and  non-owned  vehicles,  including  rented  and  leased
vehicles  containing  minimum limits per  occurrence,  including
umbrella   coverage,   of  One  Million   and   No/100   Dollars
($1,000,000);
               
               (ix)  so-called  "dramshop"  insurance  or  other
liability  insurance required in connection  with  the  sale  of
alcoholic beverages;
               
               (x)  insurance against employee dishonesty in  an
amount  not less than one (1) month of gross revenue  from  such
Individual  Property  with a deductible  not  greater  than  Ten
Thousand and No/100 Dollars ($10,000); and
               
               (xi)  upon sixty (60) days' written notice,  such
other  reasonable  insurance and in such reasonable  amounts  as
Lender  from  time to time may reasonably request  against  such
other  insurable hazards which at the time are commonly  insured
against  for property similar to the Individual Property located
in  or  around  the region in which the Individual  Property  is
located.
          
          (b)  All insurance provided for in Section 5.1(a) shall
be  obtained under valid and enforceable policies (collectively,
the  "POLICIES" or in the singular, the "POLICY"), and shall  be
subject  to  the  approval of Lender as to insurance  companies,
amounts,  deductibles, loss payees and insureds.   The  Policies
shall  be  issued by financially sound and responsible insurance
companies  authorized to do business in the state in  which  the
applicable Individual Property is located with a rating of "A X"
or  better  as established by Best's Rating Guide and  having  a
claims  paying ability rating of "AA" or better by at least  two
(2) of the Rating Agencies (one of which shall be (i) Standard &
Poor's, if Standard & Poor's is rating the Securities issued  in
the Securitization of which this Loan is a part or (ii) Moody's,
if Moody's is rating the Securities issued in the Securitization
of  which  this  Loan  is a  part).  The Policies  described  in
Section 5.1 shall designate Lender as loss payee.  Not less than
ten  (10)  days  prior to the expiration dates of  the  Policies
theretofore  furnished  to  Lender,  certificates  of  insurance
evidencing the Policies accompanied by evidence satisfactory  to
Lender of payment of the premiums due thereunder (the "INSURANCE
PREMIUMS"),   shall   be  delivered  by  Borrower   to   Lender.
Notwithstanding the foregoing, (1) the insurance required to  be
maintained, or caused to be maintained, by Borrower pursuant  to
Sections  5.1(a)(vi) and (x) for the Homewood Suites in Houston,
Texas  may  be provided by Hartford Steam Boiler and Continental
Casualty Company, respectively, for so long as (i) Hartford Steam
Boiler   remains  reasonably  acceptable  to  Lender  and   (ii)
Continental  Casualty Company maintains a claims paying  ability
rating  of  "A+"  or  better by Standard & Poor's  and  (2)  the
insurance required to be maintained, or caused to be maintained,
by  Borrower pursuant to Sections 5.1(a)(ii), (v) and (viii) may
be  provided  by  Lumbermen's Mutual for so long as  Lumbermen's
Mutual maintains a claims paying ability rating of "A+" or better
by Standard & Poor's.
          
          (c)   Any  blanket insurance Policy shall specifically
allocate to the Individual Property the amount of coverage  from
time to time required hereunder and shall otherwise provide  the
same  protection  as would a separate Policy insuring  only  the
Individual Property in compliance with the provisions of Section
5.1(a),  including an acknowledgment that the  payment  of  such
allocation  shall  continue such Policy  as  to  the  Individual
Property notwithstanding any other payment of premiums.
          
          (d)   All  Policies  of  insurance  provided  for   or
contemplated by Section 5.1(a), except for the Policy referenced
in  Section  5.1(a)(v), shall name Borrower as the  insured  and
Lender  as the additional insured, as its interests may  appear,
and  in the case of property damage, boiler and machinery, flood
and  earthquake  insurance, shall contain a so-called  New  York
standard  non-contributing mortgagee clause in favor  of  Lender
providing that the loss thereunder shall be payable to Lender.
          
          (e)  All Policies of insurance provided for in Section
5.1(a) shall contain clauses or endorsements to the effect that:
               
               (i)   no act or negligence of Borrower, or anyone
acting  for  Borrower, or of any tenant or  other  occupant,  or
failure to comply with the provisions of any Policy, which might
otherwise  result in a forfeiture of the insurance or  any  part
thereof,  shall in any way affect the validity or enforceability
of the insurance insofar as Lender is concerned;
               
               (ii)  the Policy shall not be materially  changed
(other  than  to  increase  the coverage  provided  thereby)  or
canceled  without at least thirty (30) days' written  notice  to
Lender  and  any  other  party named therein  as  an  additional
insured;
               
               (iii)      each  Policy shall  provide  that  the
issuers thereof shall give written notice to Lender if the Policy
has  not been renewed fifteen (15) days prior to its expiration;
and
               
               (iv) Lender shall not be liable for any Insurance
Premiums thereon or subject to any assessments thereunder.
          
          (f)  If at any time Lender is not in receipt of written
evidence that all insurance required hereunder is in full  force
and  effect,  Lender  shall have the right,  without  notice  to
Borrower,  to  take  such action as Lender  deems  necessary  to
protect  its  interest  in the Individual  Property,  including,
without limitation, the obtaining of such insurance coverage  as
Lender in its sole discretion deems appropriate and all premiums
incurred by Lender in connection with such action or in obtaining
such insurance and keeping it in effect shall be paid by Borrower
to  Lender  upon demand and until paid shall be secured  by  the
Mortgages and shall bear interest at the Default Rate.
          
          (g)   If  the Individual Property shall be damaged  or
destroyed,  in  whole  or in part, by fire  or  other  casualty,
Borrower  shall give prompt notice of such damage to Lender  and
shall  promptly commence and diligently prosecute the completion
of  the Restoration of the Individual Property.  Borrower  shall
pay  all costs of such Restoration whether or not such costs are
covered by insurance.  Lender may, but shall not be obligated to
make proof of loss if not made promptly by Borrower.
          
          (h)   In the event of foreclosure of the Mortgage with
respect to the Individual Property, or other transfer of title to
the Individual Property in extinguishment in whole or in part of
the Debt all right, title and interest of Borrower in and to the
Policies  that are not blanket Policies then in force concerning
the Individual Property and all proceeds payable thereunder shall
thereupon vest in the purchaser at such foreclosure or Lender or
other transferee in the event of such other transfer of title.
          
          SECTION  5.2   CONDEMNATION.  Borrower shall  promptly
                         ------------
give  Lender notice of the actual or threatened commencement  of
any condemnation or eminent domain proceeding (a "CONDEMNATION")
affecting any of the Individual Properties and shall deliver  to
Lender  copies  of any and all papers served in connection  with
such proceedings.  Lender may participate in any such proceedings
and Borrower shall deliver to Lender all instruments required to
permit participation in such proceedings.  Borrower shall, at its
expense,  diligently prosecute any such proceedings,  and  shall
consult  with  Lender, its attorneys and experts, and  cooperate
with them in the carrying on or defense of any such proceedings.
Lender is hereby irrevocably appointed as Borrower's attorney-in-
fact, coupled with an interest, with exclusive power to collect,
receive  and  retain  any Award and to make  any  compromise  or
settlement  in connection with any such Condemnation.   The  Net
Proceeds of any Award shall be applied in the manner set forth in
Section 5.3  Notwithstanding any taking by any public or  quasi-
public  authority through eminent domain or otherwise (including
but  not  limited  to  any  transfer  made  in  lieu  of  or  in
anticipation  of  the exercise of such taking),  Borrower  shall
continue  to pay the Debt at the time and in the manner provided
for  its payment in the Note and in this Agreement and the  
Debt shall not be reduced until any award or payment therefor (an
"AWARD") shall have been actually received and applied by Lender,
after  the deduction of expenses of collection, to the reduction
or  discharge of the Debt.  Lender shall not be limited  to  the
interest paid on the Award by the condemning authority but shall
be  entitled to receive out of the award interest at the rate or
rates provided herein or in the Note.  If an Individual Property
or  any  portion  thereof  is taken by a  condemning  authority,
Borrower  shall promptly commence and diligently  prosecute  the
Restoration of the applicable Individual Property and  otherwise
comply  with  the provisions of Section 5.3.  If  an  Individual
Property is sold, through foreclosure or otherwise, prior to the
receipt  by  Lender of the Award, Lender shall have  the  right,
whether or not a deficiency judgment on the Note shall have been
sought,  recovered or denied, to receive the Award, or a portion
thereof sufficient to pay the Debt.
          
          SECTION  5.3   RESTORATION. The  following  provisions
                         -----------
shall apply in connection with the application of Net Proceeds to
the Restoration of any Individual Property:
          
          (a)   If  the  Net Proceeds shall be less  than  Fifty
Thousand and No/100 Dollars ($50,000) and the costs of completing
the  Restoration  shall be less than Fifty Thousand  and  No/100
Dollars ($50,000), the Net Proceeds will be disbursed by  Lender
to Borrower upon receipt, provided that all of the conditions set
forth  in  Section  5.3(b)(i) are met and Borrower  delivers  to
Lender  a written undertaking to expeditiously commence  and  to
satisfactorily  complete with due diligence the  Restoration  in
accordance with the terms of this Agreement.
          
          (b)   If the Net Proceeds are equal to or greater than
Fifty  Thousand  and No/100 Dollars ($50,000) or  the  costs  of
completing  the  Restoration is equal to or greater  than  Fifty
Thousand and No/100 Dollars ($50,000) Lender shall make the  Net
Proceeds  available  for  the  Restoration  provided  that   the
conditions  of this Section 5.3 have been satisfied.   The  term
"NET PROCEEDS" for purposes of this Section 5.3 shall mean:  (i)
the  net  amount  of all insurance proceeds received  by  Lender
pursuant  to Section 5.1 (a)(i), (iv), (vi), (vii) and (ix)  (if
applicable)  as  a  result of such damage or destruction,  after
deduction  of the reasonable costs and expenses (including,  but
not  limited to, reasonable counsel fees), if any, in collecting
same ("INSURANCE PROCEEDS"), or (ii) the net amount of the Award,
after deduction of its reasonable costs and expenses (including,
but  not  limited  to,  reasonable counsel  fees),  if  any,  in
collecting same ("CONDEMNATION PROCEEDS"), whichever the case may
be.
               
               (i)  The Net Proceeds shall be made available  to
          Borrower for Restoration provided that the Net Proceeds
          are received prior to the Anticipated Payment Date and
          each of the following conditions are met:
                    
                    (A)  no Event of Default shall have occurred
               and be continuing;
                    
                    (B)   (1) in the event the Net Proceeds  are
               Insurance Proceeds, less than fifty percent (50%)
               of the total floor area of the Improvements of the
               Individual Property has been damaged, destroyed or
               rendered  unusable as a result of  such  fire  or
               other  casualty  or  (2) in  the  event  the  Net
               Proceeds are Condemnation Proceeds, less than ten
               percent  (10%)  of  the  land  constituting   the
               Individual  Property is taken, and such  land  is
               located along the perimeter or periphery  of  the
               Individual  Property,  and  no  portion  of   the
               Improvements is located in such land;
                    
                    (C)   the Operating Lease, if any, for  such
               Individual Property shall remain in full force and
               effect  during  and after the completion  of  the
               Restoration, notwithstanding the occurrence of any
               such  fire or other casualty or taking, whichever
               the case may be;
                    
                    (D)   the  Franchise Agreement, if any,  for
               such  Individual Property shall  remain  in  full
               force  and effect during and after the completion
               of the Restoration, notwithstanding the occurrence
               of  any  such fire or other casualty  or  taking,
               whichever the case may be;
                    
                    (E)  Borrower shall commence the Restoration
               as soon as reasonably practicable (but in no event
               later  than sixty (60) days after such damage  or
               destruction or taking, whichever the case may be,
               occurs)  and shall diligently pursue the same  to
               satisfactory completion;
                    
                    (F)   Lender  shall  be satisfied  that  any
               operating   deficits,  including  all   scheduled
               payments of principal and interest under the Note,
               which  will  be  incurred  with  respect  to  the
               Individual Property as a result of the occurrence
               of  any  such fire or other casualty  or  taking,
               whichever the case may be, will be covered out of
               (1)  the Net Proceeds, (2) the insurance coverage
               referred to in Section 5.1(a)(iii), if applicable,
               or (3) by other funds of Borrower;
                    
                    (G)   Lender  shall  be satisfied  that  the
               Restoration  will be completed on or  before  the
               earliest to occur of (1) six (6) months prior  to
               the  Anticipated Payment Date, (2)  the  earliest
               date required for such completion under the terms
               of any Operating Lease or Franchise Agreement, (3)
               such  time  as  may be required under  applicable
               zoning law, ordinance, rule or regulation in order
               to  repair  and restore the applicable Individual
               Property  to  the condition it was in immediately
               prior  to  such fire or other casualty or  to  as
               nearly  as  possible  the  condition  it  was  in
               immediately prior to such taking, as applicable or
               (4)  the  expiration  of the  insurance  coverage
               referred to in Section 5.1(a)(iii);
                    
                    (H)   the  Individual Property and  the  use
               thereof   after  the  Restoration  will   be   in
               compliance with and permitted under all applicable
               zoning laws, ordinances, rules and regulations and
               all  necessary  operating or reciprocal  easement
               agreements  for the operation and maintenance  of
               the applicable Individual Property are, or remain,
               in effect;
                    
                    (I)   the  Restoration  shall  be  done  and
               completed  by  Borrower  in  an  expeditious  and
               diligent fashion and in compliance in all material
               respects  with all applicable governmental  laws,
               rules   and   regulations   (including,   without
               limitation, all applicable environmental laws);
                    
                    (J)   such fire or other casualty or taking,
               as  applicable, does not result in  the  loss  of
               access  to the Individual Property or the related
               Improvements after the completion of Restoration;
                    
                    (K)  after giving effect to such Restoration,
               the Debt Service Coverage Ratio for the Individual
               Property shall be equal to the greater of (i) the
               Debt  Service Coverage Ratio for the twelve  (12)
               full  calendar  months immediately preceding  the
               Closing  Date, and (ii) the Debt Service Coverage
               Ratio  for the Individual Property for the twelve
               (12)  full  calendar months immediately preceding
               the  casualty  or Condemnation of the  Individual
               Property; and
                    
                    (L)  Lender shall be satisfied that the ratio
               of the appraised value of the Individual Property
               to  the  Release Amount, as determined by Lender,
               upon  the completion of the Restoration,  is  not
               greater  than  the  lesser of the  ratio  of  the
               appraised value of the Individual Property to the
               Release Amount determined by Lender as of (i) the
               date hereof or (ii) the date immediately preceding
               the  casualty or Condemnation to such  Individual
               Property.
               
               (ii) The Net Proceeds shall be held by Lender  in
          an  interest-bearing account and, until  disbursed  in
          accordance with the provisions of this Section 5.3(b),
          shall constitute additional security for the Debt  and
          other  obligations under the Loan Documents.  The  Net
          Proceeds  shall  be  disbursed by  Lender  to,  or  as
          directed  by,  Borrower from time to time  during  the
          course  of  the Restoration, upon receipt of  evidence
          satisfactory to Lender that (A) all materials installed
          and work and labor performed (except to the extent that
          they   are  to  be  paid  for  out  of  the  requested
          disbursement) in connection with the Restoration  have
          been  paid for in full, and (B) there exist no notices
          of  pendency, stop orders, mechanic's or materialman's
          liens  or  notices of intention to file same,  or  any
          other liens or encumbrances of any nature whatsoever on
          the Individual Property arising out of the Restoration
          which  have  not  either  been  fully  bonded  to  the
          satisfaction of Lender and discharged of record or  in
          the  alternative fully insured to the satisfaction  of
          Lender by the title company issuing the title insurance
          policy.
               
               (iii)     All plans and specifications required in
          connection  with the Restoration shall be  subject  to
          prior  review and acceptance in all respects by Lender
          and by an independent consulting engineer selected  by
          Lender (the "CASUALTY CONSULTANT").  Lender shall have
          the  use  of  the  plans  and specifications  and  all
          permits, licenses and approvals required or obtained in
          connection with the Restoration.  The identity of  the
          contractors,   subcontractors  and  materialmen   with
          contracts  in  excess  of  $150,000  engaged  in   any
          Restoration, as well as the contracts under which they
          have been engaged, shall be subject to prior review and
          acceptance  by  Lender  and the  Casualty  Consultant;
          provided,  however, that in the event  Lender  or  its
          Casualty Consultant fails to respond to a request  for
          approval  of  any  such  contractors,  subcontractors,
          materialmen and contracts within ten (10) Business Days
          following   Lender's  receipt  of  all   documentation
          required hereunder, then the requirement for any  such
          approval  with  respect to such item shall  be  deemed
          waived.  All reasonable costs and expenses incurred by
          Lender  in  connection with making  the  Net  Proceeds
          available  for  the  Restoration  including,   without
          limitation,  reasonable counsel fees and disbursements
          and  the Casualty Consultant's fees, shall be paid  by
          Borrower.
               
               (iv) In no event shall Lender be obligated to make
          disbursements  of the Net Proceeds  in  excess  of  an
          amount equal to the costs actually incurred from  time
          to  time for work in place as part of the Restoration,
          as  certified  by the Casualty Consultant,  minus  the
          Casualty  Retainage.   The term  "CASUALTY RETAINAGE"
          shall mean an amount equal to ten percent (10%) of the
          costs  actually incurred for work in place as part  of
          the   Restoration,  as  certified  by   the   Casualty
          Consultant, until the Restoration has been  completed.
          The   Casualty  Retainage  shall  in  no  event,   and
          notwithstanding  anything to the  contrary  set  forth
          above  in this Section 5.1(b), be less than the amount
          actually  held  back  by  Borrower  from  contractors,
          subcontractors   and  materialmen   engaged   in   the
          Restoration.   The  Casualty Retainage  shall  not  be
          released  until the Casualty Consultant  certifies  to
          Lender  that  the  Restoration has been  completed  in
          accordance with the provisions of this Section  5.1(b)
          and  that all approvals necessary for the re-occupancy
          and  use of the Individual Property have been obtained
          from   all   appropriate   governmental   and   quasi-
          governmental authorities, and Lender receives evidence
          satisfactory   to  Lender  that  the  costs   of   the
          Restoration have been paid in full or will be paid  in
          full out of the Casualty Retainage; provided, however,
                                              --------  -------
          that  Lender will release the portion of the  Casualty
          Retainage  being held with respect to any  contractor,
          subcontractor or materialman engaged in the Restoration
          as  of  the  date  upon which the Casualty  Consultant
          certifies to Lender that the contractor, subcontractor
          or  materialman has satisfactorily completed all  work
          and  has supplied all materials in accordance with the
          provisions  of  the  contractor's, subcontractor's  or
          materialman's  contract, the contractor, subcontractor
          or  materialman delivers the lien waivers and evidence
          of  payment in full of all sums due to the contractor,
          subcontractor  or  materialman as  may  be  reasonably
          requested by Lender or by the title company issuing the
          title   insurance  policy,  and  Lender  receives   an
          endorsement to the title insurance policy insuring the
          continued priority of the lien of the related Mortgage
          and evidence of payment of any premium payable for such
          endorsement.  If required by Lender, the release of
          any such portion of the Casualty Retainage shall be
          approved  by  the surety company, if  any,  which has
          issued  a payment or performance bond with respect to
          the contractor, subcontractor or materialman.
               
               (v)   Lender  shall  not  be  obligated  to  make
          disbursements of the Net Proceeds more frequently than
          once every calendar month.
               
               (vi)  If  at  any  time the Net Proceeds  or  the
          undisbursed   balance  thereof  shall  not,   in   the
          reasonable opinion of Lender in consultation with  the
          Casualty Consultant, be sufficient to pay in full  the
          balance of the costs which are reasonably estimated by
          the  Casualty Consultant to be incurred in  connection
          with the completion of the Restoration, Borrower shall
          deposit the deficiency (the "NET PROCEEDS DEFICIENCY")
          with Lender before any further disbursement of the Net
          Proceeds  shall be made.  The Net Proceeds  Deficiency
          deposited with Lender shall be held by Lender and shall
          be disbursed for costs actually incurred in connection
          with the Restoration on the same conditions applicable
          to  the disbursement of the Net Proceeds, and until so
          disbursed  pursuant  to  this  Section  5.1(b)   shall
          constitute additional security for the Debt and  other
          obligations under the Loan Documents.
               
               (vii)     The excess, if any, of the Net Proceeds
          and the remaining balance, if any, of the Net Proceeds
          Deficiency  deposited with Lender after  the  Casualty
          Consultant certifies to Lender that the Restoration has
          been  completed in accordance with the  provisions  of
          this  Section  5.1(b), and the receipt  by  Lender  of
          evidence satisfactory to Lender that all costs incurred
          in  connection with the Restoration have been paid  in
          full, shall be remitted by Lender to Borrower, provided
          no  Event of Default shall have occurred and shall  be
          continuing under the Note, this Loan Agreement or  any
          of the other Loan Documents.
          
          (c)   All  Net Proceeds not required (i)  to  be  made
available for the Restoration or (ii) to be returned to Borrower
as  excess Net Proceeds pursuant to Section 5.1.(b)(vii) may  be
retained  and applied by Lender toward the payment of  the  Debt
whether or not then due and payable in such order, priority  and
proportions as Lender in its sole discretion shall deem  proper,
or, at the discretion of Lender, the same may be paid, either in
whole  or in part, to Borrower for such purposes as Lender shall
designate, in its discretion; provided that, notwithstanding the
foregoing,  upon the payment in full of the Debt, any additional
Net  Proceeds  shall  be  paid to  Borrower  or  to  such  other
Person(s)who may be entitled thereto.
          
          (d)   In the event that, pursuant to and in accordance
with the terms and provisions of Section 2.5(b), Borrower obtains
the release of an Individual Property which has been subject  to
any  casualty or Condemnation, the Adjusted Release  Amount  for
such Individual Property for purposes of Section 2.5(b) shall be
reduced  by  any  amounts retained and applied by  Lender  to  a
reduction  of the principal amount of the Debt with  respect  to
such Individual Property in accordance with Section 5.3(c).
          SECTION  5.4   IMPOUNDS.  Borrower shall deposit  with
                         --------
Lender,  monthly,  (a) one-twelfth (1/12th) of  the  Taxes  that
Lender  estimates  will  be  payable  during  the  next  ensuing
twelve (12) months in order to accumulate with Lender sufficient
funds  to pay all such Taxes at least thirty (30) days prior  to
their respective due dates, and (b) one-twelfth of the Insurance
Premiums that Lender estimates will be payable for the renewal of
the  coverage  afforded by the insurance  policies  required  by
Lender  upon the expiration thereof in order to accumulate  with
Lender  sufficient funds to pay all such Insurance  Premiums  at
least thirty (30) days prior to expiration (said amounts in  (a)
and  (b) above hereinafter called the "TAX AND INSURANCE ESCROW
FUND").   At  or before the advance of the Loan, Borrower  shall
deposit  with  Lender  a sum of money which  together  with  the
monthly  installments will be sufficient to make  each  of  such
payments  thirty (30) days prior to the date any delinquency  or
penalty  becomes  due with respect to such  payments.   Deposits
shall be made on the basis of Lender's estimate from time to time
of  the charges for the current year (after giving effect to any
reassessment  or,  at Lender's election, on  the  basis  of  the
charges for the prior year, with adjustments when the charges are
fixed  for  the then current year).  Borrower hereby  grants  to
Lender a security interest in all funds so deposited with Lender
for the purpose of securing the Loan.  The funds shall be held in
Lender's name in a money market interest bearing account and may
be  commingled with Lender's own funds at financial institutions
selected  by Lender in its sole discretion.  Interest earned  on
the funds shall be added back into the funds; provided, however,
that  Lender shall not be obligated to obtain any specified rate
of  return  and  Lender  shall not be liable  for  any  loss  of
principal, for which Borrower shall bear the full risk.  Subject
to  Section  3.2,  while an Event of Default is continuing,  the
funds  deposited  may be applied in payment of the  charges  for
which  such funds have been deposited, or to the payment of  the
Loan  or any other charges affecting the security of Lender,  as
Lender may elect, but no such application shall be deemed to have
been made by operation of law or otherwise until actually made by
Lender.  Borrower shall furnish Lender with bills for the charges
for  which  such deposits are required (i) at least thirty  (30)
days prior to the date on which the charges first become payable
or  (ii)  if the Governmental Authority which issues such  bills
does not issue bills at least thirty (30) days prior to the date
on which the charges first become payable, then within three (3)
Business Days following Borrower's receipt of such bills from the
Governmental  Authority.  If at any time the amount  on  deposit
with  Lender, together with amounts to be deposited by  Borrower
before  such  charges are payable, is insufficient to  pay  such
charges, Borrower shall deposit any deficiency with Lender within
three (3) Business Days after Borrower receives written notice of
such  deficiency.  Lender shall pay such charges when the amount
on  deposit  with Lender is sufficient to pay such  charges  and
Lender has received a bill for such charges.
                                
                                
                            ARTICLE 6
                                
                      ENVIRONMENTAL MATTERS
                      ---------------------
          
          SECTION 6.1  CERTAIN DEFINITIONS.  As used herein, the
                       -------------------
following terms have the meanings indicated:
          
          (a)  "ENVIRONMENTAL LAWS"  Any local, state, federal or
other  governmental authority, statute, ordinance, code,  order,
decree,  law,  rule  or  regulation pertaining  to  or  imposing
liability  or  standards  of  conduct  concerning  environmental
regulation,   contamination  or  clean-up   including,   without
limitation,    the    Comprehensive   Environmental    Response,
Compensation  and  Liability  Act,  as  amended,  the   Resource
Conservation and Recovery Act, as amended, the Emergency Planning
and  Community  Right-to-Know  Act  of  1986,  as  amended,  the
Hazardous  Substances Transportation Act, as amended, the  Solid
Waste Disposal Act, as amended, the Clean Water Act, as amended,
the Clean Air Act, as amended, the Toxic Substances Control Act,
as  amended,  the  Safe  Drinking Water  Act,  as  amended,  the
Occupational  Safety  and  Health Act,  as  amended,  any  state
superlien and environmental clean-up statutes and all regulations
adopted  in  respect of the foregoing laws whether presently  in
force or coming into being and/or effectiveness hereafter.
          
          (b)   "HAZARDOUS MATERIALS" means  (i)  petroleum  or
chemical products, whether in liquid, solid, or gaseous form, or
any   fraction   or   by-product  thereof,  (ii)   asbestos   or
asbestos-containing  materials, (iii) polychlorinated  biphenyls
(pcbs), (iv) radon gas, (v) underground storage tanks, (vi)  any
explosive  or  radioactive substances, (vii) lead or  lead-based
paint, or (viii) any other substance, material, waste or mixture
which is or shall be listed, defined, or otherwise determined by
any Governmental Authority (to the extent that such Governmental
Authority has jurisdiction over Borrower or any of the Properties
with respect to such materials) to be hazardous, toxic, dangerous
or  otherwise regulated, controlled or giving rise to  liability
under any Environmental Laws.
          
          SECTION   6.2    REPRESENTATIONS AND WARRANTIES ON
                           ---------------------------------
ENVIRONMENTAL MATTERS.  To Borrower's knowledge, except  as  set
---------------------
forth  in  the  Site  Assessments of  each  Individual  Property
delivered in connection with the origination of the Loan, (a) no
Hazardous  Material  is  now  or  was  formerly  used,   stored,
generated, manufactured, installed, treated, discharged, disposed
of  or otherwise present at or about any Individual Property  or
any  property  adjacent to any Individual Property  (except  for
cleaning and other products currently used in connection with the
routine maintenance or repair of an Individual Property  or  the
operation   thereof  as  a  hotel,  in  full   compliance   with
Environmental  Laws) and no Hazardous Material  was  removed  or
transported  from  any  Individual Property,  (b)  all  permits,
licenses,  approvals and filings required by Environmental  Laws
have been obtained, and the use, operation and condition of  any
Individual Property does not, and did not previously, violate any
Environmental  Laws,  (c) no civil, criminal  or  administrative
action,  suit,  claim, hearing, investigation or proceeding  has
been  brought  or,  to  the best of Borrower's  knowledge,  been
threatened, nor have any settlements been reached by or with any
parties  or  any liens imposed in connection with any Individual
Property  concerning Hazardous Materials or Environmental  Laws;
and  (d) no underground storage tanks exist on any part  of  any
Individual Property.
          
          SECTION 6.3  COVENANTS ON ENVIRONMENTAL MATTERS.
                       ----------------------------------
          
          (a)   Borrower shall (i) comply strictly  and  in  all
respects with applicable Environmental Laws; (ii) notify  Lender
immediately  upon Borrower's discovery of any spill,  discharge,
release  or  presence of any Hazardous Material in violation  of
applicable Environmental Laws at, upon, under, within, contiguous
to or otherwise affecting any Individual Property; (iii) promptly
remove  such  Hazardous Materials and remediate  any  Individual
Property  in  full  compliance with  Environmental  Laws  or  as
reasonably required by Lender based upon the recommendations and
specifications   of  an  independent  environmental   consultant
approved by Lender; and (iv) promptly forward to Lender copies of
all orders, notices, permits, applications  or other
communications  and  reports  in  connection  with  any spill,
discharge, release or the presence of any Hazardous Material  or
any  other  matters relating to the Environmental  Laws or  any
similar laws or regulations, as they may affect any Individual
Property or Borrower.
          
          (b)  Borrower shall not cause, shall prohibit any other
Person within the control of Borrower from causing, and shall use
prudent,  commercially  reasonable  efforts  to  prohibit  other
Persons (including tenants) from (i) causing any spill, discharge
or  release,  or  the  use,  storage,  generation,  manufacture,
installation, or disposal, of any Hazardous Materials at,  upon,
under,   within  or  about  any  Individual  Property   or   the
transportation  of  any  Hazardous  Materials  to  or  from  any
Individual Property (except for cleaning and other products used
in   connection  with  routine  maintenance  or  repair  of  any
Individual Property or the operation thereof as a hotel in  full
compliance   with  Environmental  Laws),  (ii)  installing   any
underground  storage  tanks  at  any  Individual  Property,   or
(iii)  conducting any activity that requires a permit  or  other
authorization under Environmental Laws (except in connection with
the  cleaning or routine maintenance of such Individual Property
or  the  operation thereof as a hotel, and then only  in  strict
compliance with such permit or authorization).
          
          (c)   Borrower shall provide to Lender, at  Borrower's
expense, as soon as reasonably practicable following the written
request  of Lender from time to time, a Site Assessment  or,  if
reasonably  required by Lender, an update to any  existing  Site
Assessment,  to assess the presence or absence of any  Hazardous
Materials  and the potential costs in connection with abatement,
cleanup or removal of any Hazardous Materials found on, under, at
or  within any Individual Property.  Borrower shall pay the cost
of  no  more than one such Site Assessment with respect  to  any
Individual  Property  or  update in any  twenty-four  (24)-month
period, unless Lender's request for a Site Assessment is based on
information  received by Lender pursuant to  Section  6.3(a),  a
reasonable  suspicion  of Hazardous Materials  at  or  near  any
Individual   Property,   a  breach  of   representations   under
Section 6.2, or an Event of Default, in which case any such Site
Assessment or update shall be at Borrower's expense.
          
          SECTION  6.4   ALLOCATION OF RISKS AND INDEMNITY.   As
                         ---------------------------------
between  Borrower,  Lender  and Indemnitor,  all  risk  of  loss
associated with non-compliance with Environmental Laws, or  with
the  presence  of  any  Hazardous  Material  at,  upon,  within,
contiguous  to  or otherwise affecting any Individual  Property,
shall  lie  solely  with Borrower and Indemnitor.   Accordingly,
Borrower and Indemnitor shall bear all risks and costs associated
with  any  loss  (including any loss in  value  attributable  to
Hazardous  Materials), damage or liability therefrom,  including
all costs of removal of Hazardous Materials or other remediation
required by Lender or by law.  Borrower shall indemnify,  defend
and  hold  Lender  and  its shareholders,  directors,  officers,
employees  and  agents  harmless  from  and  against  all  loss,
liabilities,  damages,  claims, costs  and  expenses  (including
reasonable  costs of defense and consultant 
fees,investigation and laboratory fees, court costs, and other 
litigation expenses)arising out of or associated, in any way, 
with (a) the non-compliance with Environmental Laws, or (b) the
existence of Hazardous Materials in, on, or about any Individual
Property, (c)any personal injury (including wrongful death) or 
property damage (real  or  personal) arising out of or related 
to Hazardous Materials; (d) any lawsuit brought or threatened, 
settlement reached, or government order relating to such Hazardous
Materials,  (e)  a  breach  of any representation,  warranty  or
covenant contained in this Article 6, whether based in contract,
tort, implied or express warranty, strict liability, criminal or
civil  statute  or  common law, or (f)  the  imposition  of  any
environmental lien encumbering any Individual Property; provided,
however, Borrower shall not be liable under such indemnification
to  the  extent  such loss, liability, damage,  claim,  cost  or
expense results solely from Lender's gross negligence or willful
misconduct.   Except as otherwise specifically provided  in  the
following sentence, Borrower's obligations under this Section 6.4
shall  arise whether or not any Governmental Authority has taken
or  threatened any action in connection with the presence of any
Hazardous Material, and whether or not the existence of any such
Hazardous Material or potential liability on account thereof  is
disclosed   in   the   Site  Assessment   and   shall   continue
notwithstanding the repayment of the Loan or any transfer or sale
of  any right, title and interest in any Individual Property (by
foreclosure,   deed  in  lieu  of  foreclosure  or   otherwise).
Borrower's obligations under this Section 6.4 shall not apply to
any release or presence of Hazardous Materials that (i) occurred
solely  after any payoff of the Note in full or solely  after  a
transfer  resulting  from  a foreclosure  or  deed  in  lieu  of
foreclosure  accepted  by Lender and  (ii)  was  not  caused  by
Borrower  or  any Affiliate of Borrower.  Additionally,  if  any
Hazardous Materials affect or threaten to affect the Properties,
Lender may (but shall not be obligated to) give such notices and
take  such  actions as it deems necessary or  advisable  at  the
expense  of  Borrower  in order to abate the  discharge  of  any
Hazardous  Materials  or  remove the Hazardous  Materials.   Any
amounts  payable to Lender by reason of the application of  this
Section  6.4  shall  become  due and payable  within  three  (3)
Business  Days after Borrower receives notice thereof and  shall
bear interest at the Default Rate from the date loss or damage is
sustained by Lender until paid.  The obligations and liabilities
of Borrower under this Section 6.4 shall survive any termination,
satisfaction, assignment, entry of a judgment of foreclosure  or
delivery of a deed in lieu of foreclosure.
          
          SECTION 6.5  NO WAIVER.  Notwithstanding any provision
                       ---------
in  this  Article 6 or elsewhere in the Loan Documents,  or  any
rights or remedies granted by the Loan Documents, Lender does not
waive  and  expressly reserves all rights and  benefits  now  or
hereafter  accruing to Lender under the "security  interest"  or
"secured creditor" exception under applicable Environmental Laws,
as  the same may be amended.  No action taken by Lender pursuant
to the Loan Documents shall be deemed or construed to be a waiver
or  relinquishment  of  any such rights or  benefits  under  the
"security interest exception."
                       
                                
                            ARTICLE 7
                                
                         LEASING MATTERS
                         ---------------
          
          SECTION 7.1  REPRESENTATIONS AND WARRANTIES ON LEASES.
                       ----------------------------------------
Borrower represents and warrants to Lender with respect  to  the
Leases  of each Individual Property that as of the date  hereof:
(a)  the  Leases  are valid and in and full  force  and  effect;
(b)  the Leases (including amendments) are in writing, and there
are  no oral agreements with respect thereto; (c) the copies  of
the Leases delivered to Lender are true and complete; (d) neither
the  landlord  nor  any tenant is in default under  any  of  the
Leases;  (e)  Borrower  has  no  knowledge  of  any  notice   of
termination  or default with respect to any Lease; (f)  Borrower
has  not assigned or pledged any of the Leases, the rents or any
interests therein except to Lender; (g) no tenant or other party
has an option or right of first refusal or offer, to purchase all
or any portion of the Individual Property; (h) no tenant has the
right  to terminate its Lease prior to expiration of the  stated
term  of  such Lease except upon the happening of a casualty  or
condemnation and in such event only pursuant to and in accordance
with  the  terms and provisions of its Lease; (i) no tenant  has
prepaid  more than one month's rent in advance (except for  bona
fide  security deposits not in excess of an amount equal to  two
month's  rent); (j) no tenant under any Lease has any  right  or
option  for  additional  space;  (k)  all  existing  Leases  are
subordinate to the Mortgage either pursuant to their terms or  a
recorded subordination agreement; and (l) there are no long term
subleases  in effect other than subleases of space for ancillary
hotel uses such as gift shops.
          
          SECTION 7.2  STANDARD LEASE FORM; APPROVAL RIGHTS.  All
                       ------------------------------------
Leases and other rental arrangements executed by Borrower  after
the  date hereof shall be approved by Lender.  Such Lease  shall
provide  that (a) the Lease is subordinate to the Mortgage,  (b)
the tenant shall attorn to Lender, and (c) that any cancellation,
surrender, or amendment of such Lease without the prior  written
consent  of Lender shall be voidable by Lender.  Borrower  shall
hold,  in  trust, all tenant security deposits in  a  segregated
account, and, to the extent required by applicable law, shall not
commingle  any  such  funds with any other  funds  of  Borrower.
Within  ten  (10)  days after Lender's request,  Borrower  shall
furnish  to Lender a statement of all tenant security  deposits,
and copies of all Leases not previously delivered to Lender,  to
the  extent  that  such Leases are in Borrower's  possession  or
Borrower is entitled to receive a copies of such Leases pursuant
to the applicable Operating Lease, certified by Borrower as being
true and correct.  The provisions of this Section 7.2 shall  not
apply to any Operating Leases.
          
          SECTION 7.3  COVENANTS.  Borrower (a) shall perform the
                       ---------
obligations  which  Borrower is required to  perform  under  the
Leases; (b) shall enforce the obligations to be performed by the
tenants;  (c) shall furnish to Lender any notice of  default  or
termination received by Borrower from any tenant, and any notice
of default or termination given by Borrower to any tenant within
three  (3)  Business  Days  after  Borrower's  receipt  thereof;
(d) shall not collect any rents for more than thirty (30) days in
advance  of the time when the same shall become due, except  for
bona fide security deposits not in excess of an amount equal  to
two  months rent; (e) shall not enter into any ground  Lease  or
master Lease of any part of the Properties; (f) shall not further
assign or encumber any Lease; (g) shall not, except with
Lender's prior written consent (which consent shall not be 
unreasonably delayed  or withheld), cancel or accept surrender or 
termination of  any Lease; (h) shall not, except with Lender's 
prior written consent (which consent shall not be unreasonably 
delayed, withheld or conditioned), modify or amend any Lease 
(except for minor modifications and amendments entered into in the 
ordinary course of business, consistent with prudent property 
management practices, not affecting the economic terms of the Lease);
(i)shall not, except with Lender's prior written consent (which
consent   shall  not  be  unreasonably  delayed,  withheld  or
conditioned),  consent to any sublease of space at  any  of the
Properties;  and  (j)  shall maintain all security  deposits  in
accordance with the applicable Leases and the requirements of the
applicable laws of the state in which each Individual Property is
located.  Any action in violation of clauses (e), (f), (g),  (h)
and  (i)  of  this Section 7.3 shall be void at the election  of
Lender.
          
          SECTION  7.4  TENANT ESTOPPELS.  At Lender's  request,
                        ----------------
Borrower shall obtain and furnish to Lender, written estoppels in
the  form attached hereto as Schedule VII  or otherwise in  form
and  substance  reasonably satisfactory to Lender,  executed  by
tenants under Leases and Operating Leases at the Properties  and
confirming  the  term,  rent, and other provisions  and  matters
relating to the Leases.
                                
                                
                            ARTICLE 8
                                
                 REPRESENTATIONS AND WARRANTIES
                 ------------------------------
          
          Borrower  represents  and warrants,  as  of  the  date
hereof, and covenants to Lender that:
          
          SECTION   8.1   ORGANIZATION, POWER AND AUTHORITY.
                          ---------------------------------
Borrower and the Operating Lessee (a) are duly organized, validly
existing  and  in good standing under the laws of the  state  of
their  formation  or existence, (b) are in compliance  with  all
legal  requirements applicable to doing business in  each  state
where  the  Properties  are  located,  and  (c)  to  the  extent
necessary, have the necessary governmental approvals to own  and
operate the Properties and conduct the business now conducted or
to  be  conducted  thereon.  Each Borrower  Party  (a)  is  duly
organized, validly existing and in good standing under the  laws
of the state of its formation or existence and (b) to the extent
necessary,   is  in  compliance  with  all  legal   requirements
applicable  to doing business in each state where the Properties
are located.  Borrower has the full power, authority and right to
execute,  deliver and perform its obligations pursuant  to  this
Loan Agreement and the other Loan Documents, and to mortgage the
Properties pursuant to the terms of the Mortgages and to keep and
observe  all of the terms of this Loan Agreement and  the  other
Loan Documents on Borrower's part to be performed.
          
          SECTION   8.2    VALIDITY OF LOAN DOCUMENTS.    The
                           --------------------------
execution, delivery and performance by Borrower and each Borrower
Party of the Loan Documents:  (a) are duly authorized and do not
require   the  consent  or  approval  of  any  other  party   or
governmental authority which has not been obtained; and (b) will
not  violate  any law or result in the imposition of  any  lien,
charge  or encumbrance upon the assets of any such party, except
as contemplated by the Loan Documents.  The Loan Documents
constitute the legal, valid and binding obligations of Borrower
and each  Borrower Party, enforceable in accordance with their
respective terms, subject to equitable principles and applicable
bankruptcy, insolvency, or similar laws generally affecting  the
enforcement of creditors' rights.
          
          SECTION 8.3  NO CONFLICTS.  The execution, delivery and
                       ------------
performance  of this Agreement and the other Loan  Documents  by
Borrower will not conflict with or result in a breach of any  of
the  terms  or provisions of, or constitute a default under,  or
result  in  the  creation or imposition of any lien,  charge  or
encumbrance (other than pursuant to the Loan Documents) upon any
of  the property or assets of Borrower pursuant to the terms  of
any   indenture,  mortgage,  deed  of  trust,  loan   agreement,
partnership agreement or other agreement or instrument to  which
Borrower  is  a party or by which any of Borrower's property  or
assets  is subject, nor will such action result in any violation
of the provisions of any statute or any order, rule or regulation
of  any court or governmental agency or body having jurisdiction
over Borrower or any of Borrower's properties or assets, and any
consent,   approval,  authorization,  order,   registration   or
qualification  of  or  with any court  or  any  such  regulatory
authority or other governmental agency or body required for  the
execution, delivery and performance by Borrower of this Agreement
or  any  other Loan Documents has been obtained and is  in  full
force and effect.
          
          SECTION 8.4  LIABILITIES; LITIGATION.
                       -----------------------
          
          (a)  All financial data, including, without limitation,
the  statements  of cash flow and income and operating  expense,
that have been delivered by Borrower and each Borrower Party are
(i) are true, complete and correct in all material respects, (ii)
accurately represent the financial condition of the Properties as
of the date of such reports, and (iii) to the extent prepared or
audited by an independent certified public accounting firm, have
been  prepared in accordance with generally accepted  accounting
principles then in effect throughout the periods covered, except
as  disclosed  therein.  Borrower does not have  any  contingent
liabilities, liabilities for taxes, unusual forward or long-term
commitments  or  unrealized  or  anticipated  losses  from   any
unfavorable commitments that are known to Borrower and reasonably
likely to have a materially adverse effect on the Properties  or
the  operation  thereof  as hotels, except  as  referred  to  or
reflected in said financial statements.  Since the date  of  the
financial statements, there has been no materially adverse change
in  the  financial condition, operations or business of Borrower
from  that set forth in said financial statements.  There is  no
litigation,  administrative proceeding, investigation  or  other
legal action (including any proceeding under any state or federal
bankruptcy  or insolvency law) pending or, to the  knowledge  of
Borrower,  threatened, against the Properties, Borrower  or  any
Borrower  Party  which  if  adversely determined  could  have  a
material  adverse  effect on such party, the Properties  or  the
Loan, except as specifically set forth on Schedule IX.
                                          -----------
          
          (b)   Neither  Borrower  nor  any  Borrower  Party  is
contemplating either the filing of a petition by it under  state
or  federal bankruptcy or insolvency laws or the liquidation  of
all  or  a major portion of its assets or property, and  neither
Borrower  nor  any Borrower Party has knowledge  of  any  Person
contemplating the filing of any such petition against it.
          
          SECTION  8.5   TAXES AND ASSESSMENTS.  There  are  no
                         ---------------------
pending  or, to Borrower's best knowledge, proposed, special  or
other assessments for public improvements or otherwise affecting
the  Properties,  nor, to Borrower's knowledge,  are  there  any
contemplated improvements to the Properties that may  result  in
such special or other assessments.
          
          SECTION  8.6   OTHER AGREEMENTS;  DEFAULTS.   Neither
                         ---------------------------
Borrower  nor any Borrower Party is a party to any agreement  or
instrument or subject to any court order, injunction, permit, or
restriction which might materially adversely affect any  of  the
Properties  or the business, operations, or condition (financial
or  otherwise) of Borrower.  Neither Borrower nor  any  Borrower
Party is in violation of any agreement which violation would have
a  materially adverse effect on any of the Properties, Borrower,
or  any  Borrower Party or Borrower's business,  properties,  or
assets, operations or condition, financial or otherwise.
          
          SECTION 8.7  TITLE. Borrower has good, marketable  and
                       -----
insurable  title to the Properties, free and clear of all  Liens
whatsoever except the Permitted Encumbrances, such other Liens as
are  permitted  pursuant  to the Loan Documents  and  the  liens
created  by  the Loan Documents.  Each Mortgage  creates  (i)  a
valid,  perfected  lien on the applicable  Individual  Property,
subject only to Permitted Encumbrances and the liens created  by
the  Loan Documents and (ii) perfected security interests in and
to,  and  perfected  collateral assignments of,  all  personalty
(including the Leases), all in accordance with the terms thereof,
in   each   case  subject  only  to  any  applicable   Permitted
Encumbrances, such other Liens as are permitted pursuant to  the
Loan  Documents  and  the liens created by the  Loan  Documents.
There  are  no  claims for payment for work, labor or  materials
affecting any of Borrower's Properties which are or may become a
lien  prior to, or of equal priority with, the liens created  by
the   Loan  Documents.   None  of  the  Permitted  Encumbrances,
individually or in the aggregate, materially interfere with  the
benefits of the security intended to be provided by the Mortgages
and  this  Loan Agreement, materially and adversely  affect  the
value of any Individual Property, impair the use or operations of
any  Individual Property or impair Borrower's ability to pay its
obligations in a timely manner.
          
          SECTION 8.8  COMPLIANCE WITH LAW.
                       -------------------
          
          (a)  Borrower has or, pursuant to the Operating Lease,
has caused the Operating Lessees to have all requisite licenses,
permits, franchises, qualifications, certificates of occupancy or
other governmental authorizations to own, lease and operate each
of  the  Properties and carry on its business, and each  of  the
Properties is in compliance with applicable legal requirements in
all material respects and is free of material structural defects,
and  all  building systems contained therein are in good working
order, subject to ordinary wear and tear.  Each of the Properties
does   not   constitute,  in  whole  or  in  part,   a   legally
non-conforming use under applicable legal requirements;
          
          (b)   No  condemnation  has  been  commenced  or,   to
Borrower's knowledge, is contemplated with respect to all or any
portion  of  the  Properties or for the relocation  of  roadways
providing access to any of the Properties; and
 
          (c)   Each  of the Properties has adequate  rights  of
access  to  public ways and is served by adequate water,  sewer,
sanitary sewer and storm drain facilities.  All public utilities
necessary  to  the full use and enjoyment of the Properties  are
located  in  the  public  right-of-way  abutting  each  of   the
Properties, and all such utilities are connected so as to  serve
the Properties without passing over other property, except to the
extent such other property is subject to a perpetual easement for
such  utility  benefiting  each of the  Properties.   All  roads
necessary for the full utilization of each of the Properties for
its  current purpose have been completed and dedicated to public
use and accepted by all governmental authorities.
          
          SECTION   8.9    LOCATION OF BORROWER.    Borrower's
                           --------------------
principal  place  of  business and chief executive  offices  are
located at the address stated in Section 15.1.
          
          SECTION 8.10  ERISA.
                        -----
          
          (a)  As of the date hereof and throughout the term  of
the  Loan,  (i)  Borrower is not and will not  be  an  "employee
benefit  plan"  as  defined  in Section  3(3)  of  the  Employee
Retirement  Income  Security Act of 1974, as amended  ("ERISA"),
which  is  subject to Title I of ERISA, and (ii) the  assets  of
Borrower  do  not and will not constitute "plan  assets"  of  an
employee benefit plan for purposes of Title I of ERISA; provided
that the foregoing representation is based on the assumption that
Lender will not satisfy its obligations under the Loan with  the
assets of an "employee benefit plan"; and
          
          (b)  As of the date hereof and throughout the term  of
the  Loan  (i)  Borrower is not and will not be a  "governmental
plan"  within  the meaning of Section 3(32) of  ERISA  and  (ii)
transactions by or with Borrower are not and will not be subject
to  state statutes applicable to Borrower regulating investments
of and fiduciary obligations with respect to governmental plans.
          
          SECTION 8.11  FORFEITURE.  There has not been committed
                        ----------
by  Borrower  or, to Borrower's knowledge, any other  person  in
occupancy of or involved with the operation or use of any of the
Properties  any act or omission affording the federal government
or  any  state  or local government the right of  forfeiture  as
against any of the Properties or any part thereof or any  monies
paid  in performance of Borrower's obligations under any of  the
Loan  Documents.  Borrower hereby covenants and  agrees  not  to
commit,  permit or suffer to exist any act or omission affording
such right of forfeiture.
          
          SECTION  8.12  TAX FILINGS. Borrower and each Borrower
                         -----------
Party  have  filed  (or have obtained effective  extensions  for
filing) all federal, state and local tax returns required to  be
filed and have paid or made adequate provision for the payment of
all  federal,  state  and local taxes, charges  and  assessments
payable  by  Borrower  and  each Borrower  Party,  respectively.
Borrower  and each Borrower Party believe that their  respective
tax returns properly reflect the income and taxes of Borrower and
each  Borrower  Party,  respectively, for  the  periods  covered
thereby, subject only to reasonable adjustments required by  the
Internal Revenue Service or other applicable tax authority  upon
audit.

          SECTION  8.13  SOLVENCY.  Borrower (a) has not entered
into the transaction or any Loan Document with the actual intent
to  hinder,  delay,  or defraud any creditor  and  (b)  received
reasonably equivalent value in exchange for its obligations under
the Loan Documents.  Giving effect to the Loan, the fair saleable
value   of  Borrower's  assets  exceeds  and  will,  immediately
following  the  making  of  the Loan,  exceed  Borrower's  total
liabilities,   including,   without  limitation,   subordinated,
unliquidated,  disputed and contingent  liabilities.   The  fair
saleable  value  of  Borrower's assets is and will,  immediately
following  the  making of the Loan, be greater  than  Borrower's
probable  liabilities,  including  the  maximum  amount  of  its
contingent liabilities on its debts as such debts become absolute
and matured, Borrower's assets do not and, immediately following
the  making of the Loan will not, constitute unreasonably  small
capital to carry out its business as conducted or as proposed to
be conducted.  Borrower does not intend to, and does not believe
that  it  will,  incur  Indebtedness and liabilities  (including
contingent liabilities and other commitments) beyond its ability
to pay such Indebtedness as they mature (taking into account the
timing  and amounts of cash to be received by Borrower  and  the
amounts  to  be  payable  on  or in respect  of  obligations  of
Borrower).  Except as expressly disclosed to Lender in  writing,
no  petition  in  bankruptcy has been  filed  against  Borrower,
Indemnitor, any guarantor or any Borrower Party in the last seven
(7) years, and neither Borrower, Indemnitor, any guarantor or any
Borrower  Party  in the last seven (7) years has  ever  made  an
assignment for the benefit of creditors or taken advantage of any
insolvency act for the benefit of debtors.
          
          SECTION  8.14   FULL AND ACCURATE DISCLOSURE.   All
                          ----------------------------
information submitted by Borrower or any Borrower Party to Lender
in  connection  with the Loan or in satisfaction  of  the  terms
thereof  and  all  statements of fact made by  Borrower  or  any
Borrower  Party in this Agreement or in any other Loan Document,
are accurate, complete and correct in all material respects.  No
statement  of  fact  made by or on behalf  of  Borrower  or  any
Borrower  Party  in this Agreement or in any of the  other  Loan
Documents  contains any untrue statement of a material  fact  or
omits  to  state any material fact necessary to make  statements
contained  herein or therein not misleading.  There is  no  fact
presently  known  to Borrower which has not  been  disclosed  to
Lender  which  adversely affects, nor as  far  as  Borrower  can
reasonably foresee, might materially adversely affect, any of the
Properties or the business, operations or condition (financial or
otherwise) of Borrower or any Borrower Party.
          
          SECTION   8.15   FLOOD ZONE.   Except  as   otherwise
                           ----------
disclosed by the surveys delivered to Lender pursuant to Section
4.1 hereof, no portion of the improvements comprising any of the
Properties is located in an area identified by the Secretary  of
Housing and Urban Development or any successor thereto as an area
having  special  flood hazards pursuant to  the  National  Flood
Insurance Act of 1968, the Flood Disaster Protection Act of 1973
or  the National Flood Insurance Act of 1994, as amended, or any
successor law, or, if located within any such area, Borrower has
obtained  and will maintain the insurance prescribed in  Section
5.1 hereof.
          
          SECTION 8.16  FEDERAL RESERVE REGULATIONS.  No part of
                        ---------------------------
the  proceeds  of  the  Loan will be used  for  the  purpose  of
purchasing or acquiring any "margin stock" within the meaning of
Regulation  U  of the Board of Governors of the Federal  Reserve
System or for any other purpose which would be inconsistent with
such  Regulation  U or any other Regulations of  such  Board  of
Governors,  or for any purposes prohibited by Legal Requirements
or  by  the terms and conditions of this Agreement or the  other
Loan Documents.
          
          SECTION 8.17  NOT A FOREIGH PERSON. Borrower is not  a
                        --------------------
"foreign person" within the meaning of  1445(f)(3) of the Code.
          
          SECTION  8.18  SEPARATE LOTS. Each Individual Property
                         -------------
is  comprised  of  one (1) or more parcels which  constitutes  a
separate tax lot and does not constitute a portion of any  other
tax lot not a part of such Individual Property.
          
          SECTION 8.19  NO PRIOR ASSIGNMENT.  There are no prior
                        -------------------
assignments of the Leases, Operating Leases or any portion of the
Rents  due  and payable or to become due and payable  which  are
presently outstanding.
          
          SECTION 8.20  INSURANCE.  Borrower has obtained, or has
                        ---------
caused  to  be  obtained, and has delivered to Lender  certified
copies  of  all  insurance  policies  reflecting  the  insurance
coverages,  amounts and other requirements  set  forth  in  this
Agreement.  No claims have been made under any such Policy, and,
to  the  best  of  Borrower's knowledge,  no  Person,  including
Borrower,  has  done, by act or omission, anything  which  would
impair the coverage of any such policy.
          
          SECTION  8.21   USE OF PROPERTIES.   Each   of   the
                          -----------------
Individual Properties is used exclusively for hotel purposes and
other appurtenant and related uses including, but not limited to,
restaurants and lounges.
          
          Section 8.22  CERTIFICATE OF OCCUPANCY; LICENSES.  All
                        ----------------------------------
certifications,  permits,  licenses  and  approvals,   including
without  limitation,  certificates of completion  and  occupancy
permits and any applicable liquor license required for the legal
use, occupancy and operation of each of the Individual Properties
as a hotel (collectively, the "LICENSES"), have been obtained and
are  in  full force and effect.  Borrower shall ensure that  all
licenses  necessary for the operation of each of the  Individual
Properties  as a hotel are kept and maintained.  The  use  being
made  of  each  Individual Property is in  conformity  with  the
certificate of occupancy issued for such Individual Property.
          
          SECTION  8.23   PHYSICAL CONDITION.   Each  of  the
                          ------------------
Individual   Properties,  including,  without  limitation,   all
buildings,  improvements, parking facilities,  sidewalks,  storm
drainage  systems, roofs, plumbing systems, HVAC  systems,  fire
protection  systems,  electrical systems, equipment,  elevators,
exterior sidings and doors, landscaping, irrigation systems  and
all  structural  components, are in good  condition,  order  and
repair  in all material respects; there exists no structural  or
other  material  defects or damages in  any  of  the  Individual
Properties,  whether latent or otherwise, and Borrower  has  not
received notice from any insurance company or bonding company of
any defects or inadequacies in any of the Individual Properties,
or   any   part  thereof,  which  would  adversely  affect   the
insurability of the same or cause the imposition of extraordinary
premiums  or charges thereon or of any termination or threatened
termination of any policy of insurance or bond.

          SECTION   8.24   BOUNDARIES.   Except  as  otherwise
                           ----------
disclosed by the surveys delivered to Lender pursuant to Section
4.1  hereof,  all  of the improvements which  were  included  in
determining the appraised value of each Individual Property  lie
wholly  within the boundaries and building restriction lines  of
such  Individual  Property,  and no  improvements  on  adjoining
properties  encroach  upon  such  Individual  Property,  and  no
easements  or other encumbrances upon the applicable  Individual
Property encroach upon any of the improvements, so as to  affect
the value or marketability of the applicable Individual Property
except those which are insured against by title insurance.
          
          SECTION 8.25  INTENTIONALLY OMITTED.
                        ---------------------
          
          SECTION 8.26  INTENTIONALLY OMITTED.
                        ---------------------
          
          SECTION 8.27  FILING AND RECORDING TAXES.   All
                        --------------------------
transfer taxes, deed stamps, intangible taxes or other amounts in
the  nature of transfer taxes required to be paid by any  Person
under  applicable  Legal  Requirements currently  in  effect  in
connection with the transfer of the Properties to Borrower  have
been  paid.  All mortgage, mortgage recording, stamp, intangible
or  other  similar tax required to be paid by any  Person  under
applicable  Legal Requirements currently in effect in connection
with the execution, delivery, recordation, filing, registration,
perfection   or  enforcement  of  any  of  the  Loan  Documents,
including,  without  limitation, the Mortgages  encumbering  the
Properties have been paid, and, under current Legal Requirements,
the  Mortgages  encumbering the Properties  are  enforceable  in
accordance  with  their  respective  terms  by  Lender  (or  any
subsequent holder thereof), subject to equitable principles  and
applicable  bankruptcy,  insolvency or  similar  laws  generally
affecting the enforcement of creditors' rights.
          
          SECTION   8.28   SINGLE PURPOSE ENTITY/SEPARATENESS.
                           ----------------------------------
Borrower represents, warrants and covenants as follows:
          
          (a)   The  purpose for which the Borrower is organized
shall be limited solely to (i) owning, holding, selling, leasing,
transferring, exchanging, operating and managing the Properties,
(ii)  entering  into  this  Agreement  with  the  Lender,  (iii)
refinancing  the  Properties  in  connection  with  a  permitted
repayment  of the Loan and (iv) transacting any and  all  lawful
business  for  which  a  Borrower may  be  organized  under  its
constitutive law that is incident, reasonable and appropriate to
accomplish the foregoing.  Borrower shall conduct its business in
accordance with the foregoing purpose.
          
          (b)   Borrower does not own and will not own any asset
or  property other than (i) the Properties, and (ii)  incidental
personal property necessary for the ownership or operation of the
Properties.  Borrower will not engage in any business other than
the  ownership,  management and operation of the Properties  and
Borrower  will  conduct  and operate its business  as  presently
conducted and operated.
          
          (c)   Borrower  will not enter into  any  contract  or
agreement with any Affiliate of Borrower, any constituent  party
of  Borrower, the guarantors or any Affiliate of any constituent
party  or  guarantor, except upon terms and conditions that  are
substantially similar to those that would be available on an arms-
length basis with third parties other than any such party.
          
          (d)   Borrower has not incurred and will not incur any
Indebtedness other than (i) the Loan, (ii) trade and operational
debt  incurred  in  the  ordinary course of  business  which  is
outstanding for no more than sixty (60) days with trade creditors
and   in  amounts  as  are  normal  and  reasonable  under   the
circumstances, provided such debt is not evidenced by a note, is
paid when due and such debt does not exceed at any one time  one
percent (1%) of the Release Amount for the applicable Individual
Property,  and (iii) debt incurred in the financing of equipment
and  other personal property located at the Properties which  is
not in any way deemed to be real property, secured solely by such
equipment or personal property being financed, not to exceed  at
any  one  time  two percent (2%) of the Release Amount  for  the
applicable Individual Property.  No Indebtedness other than  the
Loan  may  be  secured  (subordinate  or  pari  passu)  by   the
Properties.
          
          (e)  Borrower has not made and will not make any loans
or  advances  to  any third party (including  any  affiliate  or
constituent  party,  any  guarantor  or  any  affiliate  of  any
constituent   party  or  guarantor),  and  shall   not   acquire
obligations  or securities of its affiliates or any  constituent
party.
          
          (f)   Borrower is and will remain solvent and Borrower
will  pay  its debts and liabilities (including, as  applicable,
shared  personnel and overhead expenses) from its assets as  the
same shall become due.
          
          (g)  Borrower has done or caused to be done and will do
all  things necessary to observe organizational formalities  and
preserve its existence, and Borrower will not, nor will Borrower
permit any constituent party or any guarantor to amend, modify or
otherwise   change  the  partnership  certificate,   partnership
agreement,  articles  of  incorporation  and  bylaws,  operating
agreement, trust or other organizational documents of Borrower or
such  constituent party or guarantor without the  prior  written
consent of Lender.
          
          (h)  Borrower will maintain all of its books, records,
financial statements and bank accounts separate from those of its
Affiliates and any constituent party and, to the extent required
by  law, Borrower will file its own tax returns.  Borrower shall
maintain  its  books,  records, resolutions  and  agreements  as
official records.
          
          (i)   Borrower  will be, and at all  times  will  hold
itself out to the public as, a legal entity separate and distinct
from any other entity (including any Affiliate of Borrower,  any
constituent party of Borrower, any guarantor or any Affiliate of
any  constituent  party or guarantor), shall correct  any  known
misunderstanding regarding its status as a separate entity, shall
conduct  business in its own name, shall not identify itself  or
any  of  its Affiliates as a division or part of the  other  and
shall  maintain  and  utilize a separate  telephone  number  and
separate stationery, invoices and checks.

          (j)   Borrower will maintain adequate capital for  the
normal  obligations reasonably foreseeable in a business of  its
size  and  character  and in light of its contemplated  business
operations.
          
          (k)   Neither Borrower nor any constituent party  will
seek the dissolution, winding up, liquidation, consolidation  or
merger in whole or in part, of Borrower.
          
          (l)   Borrower will not commingle the funds and  other
assets  of  Borrower with those of any Affiliate or  constituent
party, any guarantor, or any Affiliate of any constituent  party
or guarantor, or any other person.
          
          (m)  Borrower has and will maintain its assets in such
a  manner  that it will not be costly or difficult to segregate,
ascertain  or identify its individual assets from those  of  any
Affiliate  or constituent party, any guarantor, or any Affiliate
of any constituent party or guarantor, or any other person.
          
          (n)  Borrower does not and will not hold itself out to
be responsible for the debts or obligations of any other person.
          
          (o)  If Borrower is a limited partnership or a limited
liability company, each general partner or managing member (each,
an  "SPC PARTY") shall be a corporation whose sole asset is  its
interest  in Borrower and each such SPC Party will at all  times
comply,  and  will cause Borrower to comply, with  each  of  the
representations,  warranties, and covenants  contained  in  this
Section 8.28 as if such representation, warranty or covenant was
made directly by such SPC Party.
          
          (p)  Borrower shall at all times cause there to be  at
least  one  duly appointed member of the board of directors  (an
"INDEPENDENT DIRECTOR") of each SPC Party in Borrower reasonably
satisfactory to Lender who shall not have been at  the  time  of
such individual's appointment, and may not have been at any time
during  the  preceding five years (i) a shareholder  of,  or  an
officer, director, partner or employee of, Borrower or any of its
shareholders, subsidiaries or affiliates, (ii) a customer of, or
supplier to, Borrower or any of its shareholders, subsidiaries or
affiliates, (iii) a person or other entity controlling or  under
common  control with any such shareholder, partner, supplier  or
customer, or (iv) a member of the immediate family of  any  such
shareholder, officer, director, partner, employee,  supplier  or
customer of Borrower.  As used herein, the term "control"  means
the possession, directly or indirectly, of the power to direct or
cause the direction of the management and policies of a person or
entity,  whether  through  ownership of  voting  securities,  by
contract or otherwise.
          
          (q)   Borrower shall not cause or permit the board  of
directors of each SPC Party in Borrower to take any action which,
under the terms of any certificate of incorporation, by-laws  or
any  voting  trust agreement with respect to any  common  stock,
requires  the vote of the board of directors of Borrower  and/or
any SPC Party in Borrower unless at the time of such action there
shall be at least one member who is an Independent Director.
 
          (r)   Borrower shall conduct its business so that  the
assumptions made with respect to Borrower in that certain opinion
letter of even date herewith (the "INSOLVENCY OPINION") delivered
by  Hunton & Williams in connection with the Loan shall be  true
and correct in all respects.
          
          SECTION 8.29  MANAGEMENT AGREEMENTS.
                        ---------------------
          
          (a)   In the event that any Individual Property is  or
becomes subject to a Management Agreement with a Person that  is
not an "affiliate" (as defined in the applicable Operating Lease)
of  the applicable Operating Lessee, Lender shall have the right
to   reasonably  approve  such  Manager  in  advance  (and   any
replacement  Manager)  and the applicable Management  Agreement.
The  fee  due under any Management Agreement, and the terms  and
provisions of each Management Agreement, shall be subordinate to
this  Agreement  and the applicable Mortgage, and  each  Manager
shall  agree to attorn to Lender.  Borrower shall not terminate,
cancel,  modify,  renew or extend any Management  Agreement,  or
enter into any agreement relating to the management or operation
of the Properties without the express written consent of Lender,
which  consent  shall not be unreasonably withheld,  delayed  or
conditioned;  provided,  however, after a  Securitization,  with
              --------   -------
respect  to  a new Manager such consent may be conditioned  upon
Borrower  delivering  evidence in writing  from  the  applicable
Rating  Agencies  to the effect that such new Manager  will  not
result  in  a  downgrade,  withdrawal or  qualification  of  the
respective ratings then in effect for any Securities  issued  in
connection with a Securitization.  If at any time Lender consents
to  the  appointment  of a new Manager,  such  new  Manager  and
Borrower  or  the Operating Lessee, as applicable, shall,  as  a
condition  of Lender's consent, execute a Manager's Consent  and
Subordination of Management Agreement substantially in the  form
attached  hereto as Schedule X (as such form may be  amended  by
                    ----------
Lender  consistent with prudent underwriting  standards).   Each
Management   Agreement  (and  any  amendments  or  modifications
thereto) must provide that (i) upon a termination of the related
Operating  Lease  or  a termination of Borrower's  or  Operating
Lessee's  right  to  possession  of  the  applicable  Individual
Property  for  any  reason,  such Management  Agreement  may  be
terminated by Lender without liability for any payment due or to
become  due to the Manager thereunder, (ii) any management  fees
shall  be subordinated to payments of Rent thereunder, and (iii)
in  the event Borrower or Operating Lessee, as applicable, is in
default,  such  Manager  shall, at the election  of  Lender  and
provided  that  such Manager continues to be paid,  continue  to
perform under the terms of the Management Agreement for a period
not to exceed ninety (90) days.  No fees or other amounts payable
to  Borrower  by Manager under such Management Agreements  shall
excuse  Borrower  from its obligations to  pay  Rent  and  other
amounts to the Bank (as defined in the Cash Management Agreement)
to  be  held  and applied in accordance with the Cash Management
Agreement.  To the extent that there is no Operating Lessee  and
Borrower  directly enters into a management agreement, it  shall
also  provide that (i) if at any time under the term of the Loan
the  property  manager becomes insolvent  or  a  debtor  in  any
bankruptcy  or  insolvency proceeding or  (ii)  Borrower  is  in
default beyond applicable notice and cure periods under the Loan,
Lender may terminate and remove the property manager and replace
the  manager with a manager acceptable to Lender and any  Rating
Agencies  in their sole discretion; such manger shall receive  a
property management fee not to exceed then current market rates.

          (b)   Borrower, upon the request of Lender  (and  with
respect to the Operating Leases in effect as of the date hereof,
to  the  extent that Borrower is empowered to do so  under  such
Operating  Leases),  shall terminate any Manager  designated  by
Lender,  without penalty or fee, if at any time during the  Loan
(i)  such  Manager shall become insolvent or  a  debtor  in  any
bankruptcy or insolvency proceeding, (ii) there is continuing an
Event  of  Default, or (iii) the Anticipated  Payment  Date  has
occurred  and  the  Loan has not been repaid.   Each  Management
Agreement  entered  into  by Borrower shall  provide  that  such
Manager  may  be terminated, without penalty or  fee,  upon  the
occurrence of any of the foregoing.  At such time as the Manager
may  be removed, a replacement Manager acceptable to Lender  and
the  applicable  Rating Agencies in their sole discretion  shall
assume management of the Properties and shall receive a property
management fee not to exceed then current market rates.

          
          (c)    The  Management  Agreements  more  particularly
described   on  Schedule  XI  hereto  are  the  only  Management
Agreements  currently in effect with respect to the  Properties.
Borrower  is  under no obligation to pay any fees,  expenses  or
other  costs  to  or for any party, or to perform  any  acts  or
services for any party, pursuant to the terms and provisions  of
the Management Agreements more particularly described on Schedule
XI hereto.

          
          SECTION 8.30  FRANCHISE AGREEMENTS; OPERATING LEASES
                        --------------------------------------
          
          (a)   To the best of Borrower's knowledge, each of the
Franchise Agreements between the respective Operating Lessee and
the  Franchisor  listed on Schedule IV, pursuant  to  which  the
applicable Operating Lessee has the right to operate  the  hotel
located  on  the Individual Property under a name  and/or  hotel
system controlled by such Franchisor, is in full force and effect
and there is no default, breach or violation existing thereunder
by  any  party  thereto  and no event has occurred  (other  than
payments  due but not yet delinquent) that, with the passage  of
time  or  the  giving  of notice, or both,  would  constitute  a
default,  breach or violation by any party thereunder.  Borrower
shall not permit, to the extent empowered to do so, or consent to
the  termination, extension or modification or the entering into
of  any  Franchise  Agreement  without  Lender's  prior  written
consent,  which  consent shall not be unreasonably  conditioned,
withheld  or delayed; provided, however, with respect to  a  new
Franchise  Agreement  entered into after a Securitization,  such
consent may be conditioned upon Borrower delivering evidence  in
writing  from the applicable Rating Agencies to the effect  that
such  new  Franchise Agreement will not result in  a  downgrade,
withdrawal  or qualification of the respective ratings  then  in
effect   for  any  Securities  issued  in  connection   with   a
Securitization.  All payments due under the Franchise Agreements
shall  be the sole obligation of the applicable Operating Lessee
and  not  of Borrower; provided, however, that Borrower  may  be
responsible for additional payments with respect to the Franchise
Agreements  more particularly described on Schedule  XII  hereto
                                           -------------
pursuant to the owner's agreements more particularly described on
Schedule XIII hereto.
-------------
          
          (b)   Each  Operating  Lease, pursuant  to  which  the
applicable  Operating Lessee operates the respective  Individual
Property as a hotel, is in full force and effect and there is no
default, breach or violation existing thereunder by Borrower or,
to the best of Borrower's knowledge, any other party thereto and
no  event  has  occurred (other than payments due  but  not  yet
delinquent)  that, with the passage of time  or  the  giving  of
notice, or both, would constitute a default, breach or violation
by any party thereunder.  The fee due under each Operating Lease,
and  the  terms  and  provisions of  the  Operating  Lease,  are
subordinate to this Agreement and the Mortgage.  Borrower  shall
not  terminate,  cancel, modify, renew or extend  any  Operating
Lease  (other  than a termination by Borrower due  to  the  non-
payment  of  Rent  due  thereunder by the  Operating  Lessee  in
accordance  with  the  terms of the applicable  Operating  Lease
beyond any applicable notice and cure periods), or enter into any
agreement  relating  to  the  management  or  operation  of  any
Individual Property with the applicable Operating Lessee or  any
other party without the express written consent of Lender, which
consent  shall  not  be  unreasonably conditioned,  withheld  or
delayed; provided, however, that with respect to a new Operating
Lessee  such consent may be conditioned upon Borrower delivering
evidence in writing from the applicable Rating Agencies  to  the
effect  that  such new Operating Lessee will  not  result  in  a
downgrade, withdrawal or qualification of the respective ratings
then  in effect for any Securities issued in connection  with  a
Securitization.   If  at  any  time  Lender  consents   to   the
appointment of a new Operating Lessee, such new Operating Lessee
and Borrower shall, as a condition of Lender's consent, execute a
Nondisturbance  Agreement.  In the event any one Operating Lessee
operates  more than one Individual Property, each such Operating
Lease shall be cross defaulted with the Operating Leases covering
any  of  the  other Properties entered into with such  Operating
Lessee.
          
          (c)   Neither the execution and delivery of  the  Loan
Documents, Borrower's performance thereunder, nor the exercise of
any  remedies by Lender, will adversely affect Borrower's rights
under the Franchise Agreements, the Operating Leases, or any  of
the Licenses.
          
          SECTION 8.31  INVESTMENT COMPANY ACT.  Borrower is not
                        ----------------------
(a)  an  "investment  company" or a company "controlled"  by  an
"investment  company,"  within the  meaning  of  the  Investment
Company  Act of 1940, as amended; (b) a "holding company"  or  a
"subsidiary company" of a "holding company" or an "affiliate" of
either a "holding company" or a "subsidiary company" within  the
mean  of  the  Public Utility Holding Company Act  of  1935,  as
amended;  or  (c) subject to any other federal or state  law  or
regulation which purports to restrict or regulate its ability to
borrow money.
          
          SECTION 8.32  LEASES.  Borrower is not a party, either
                        ------
directly or as a successor or assignee, to any Leases other than
(i) the Operating Leases set forth on Schedule V hereto and (ii)
that  certain  Lease dated as of October 21, 1992  made  by  and
between Cary Suites, Inc. and Siemens Medical Systems, Inc.,  as
amended  by that certain Amendment to Lease dated as of February
7, 1994 and subsequently assigned to Borrower.
          
          SECTION  8.33  SPE COMPLIANCE.  All of the assumptions
                         --------------
set  forth  in the Insolvency Opinion are true and correct.   In
connection  with  the foregoing, Borrower hereby  covenants  and
agrees  that it will comply with, or cause the compliance  with,
(i) all the assumptions (whether regarding Borrower or any other
persons or entity) set forth in the Insolvency Opinion, (ii) all
the  representations and warranties set forth  in  Section  8.28
hereof,  and (iii) all the organizational documents of  Borrower
and its SPC Party.
                                
                                
                            ARTICLE 9
                                
                       FINANCIAL REPORTING
                       -------------------
          
          SECTION 9.1  FINANCIAL STATEMENTS
                       --------------------
          
          (a)  OBLIGATIONS OF BORROWER.  (i)  Borrower will keep
               -----------------------
and  maintain  or  will  cause to be  kept  and  maintained,  in
accordance with generally accepted accounting principles  proper
and  accurate books, records and accounts reflecting all of  the
financial affairs of Borrower and Operating Lessees, all items of
income  and  expense  in connection with  the  operation  on  an
individual  basis of each of the Individual Properties.   Lender
shall have the right from time to time at all times during normal
business hours to examine such books, records and accounts at the
office of Borrower, Operating Lessee or other Person maintaining
such  books,  records and accounts and to make  such  copies  or
extracts  thereof as Lender shall desire.  After the  occurrence
and  during  the  continuation of an Event of Default,  Borrower
shall  pay any costs and expenses incurred by Lender to  examine
any accounting records with respect to the Properties, as Lender
shall determine to be necessary or appropriate in the protection
of Lender's interest.
          
          (b)   MONTHLY REPORTS.  Within thirty (30) days  after
                ---------------
the  end of each calendar month, Borrower shall furnish or cause
the  Operating Lessees to furnish to Lender current (as  of  the
calendar  month  just  ended)  property-level  balance   sheets,
detailed  property-level operating statements  (showing  monthly
activity and year-to-date) stating Operating Revenues, Operating
Expenses, Net Operating Income and net cash flow for the calendar
month just ended, a general ledger (if so required), a report of
occupancy for the subject month including an average daily rate,
and any and all franchise inspection reports received by Borrower
or  any  Operating  Lessee  during the  subject  month  and,  as
requested  by  Lender, a written statement   setting  forth  any
variance   from   the  annual  budget  and  other  documentation
supporting the information disclosed in the most recent financial
statements.
          
          (c)   QUARTERLY REPORTS.  Within sixty (60) days after
                -----------------
the end of each calendar quarter, Borrower shall furnish or shall
cause  the  Operating  Lessees to  furnish  to  Lender  detailed
property-level operating statements (showing quarterly  activity
and year-to-date) stating Operating Revenues, Operating Expenses,
Net Operating Income, and net cash flow and capital expenditures
for  the  calendar  quarter  just ended.   Borrower's  quarterly
statements  shall  be  accompanied by (i) a  comparison  of  the
budgeted  income and expenses and the actual income and expenses
for  the prior calendar quarter, and (ii) a certificate executed
by the chief financial officer of Borrower or the general partner
of  Borrower  stating  that,  to  the  best  of  such  officer's
knowledge,  each  such quarterly statement presents  fairly  the
financial condition and the results of operations of Borrower and
the  Properties  being reported upon and has  been  prepared  in
accordance   with  generally  accepted  accounting   principles;
provided  that,  with  respect to property-level  reports,  such
quarterly  reports shall be prepared using the  same  accounting
method  used at closing and Borrower agrees to notify Lender  of
any  material changes in the method used for the preparation  of
such  property-level reports upon the receipt of notice of  such
change  from the Operating Lessee.  In addition, such  statement
shall also be accompanied by a certificate of the chief financial
officer of Borrower or the general partner or managing member of
Borrower  stating  that the representations  and  warranties  of
Borrower set forth in Section 8.28 are true and correct as of the
date of such certificate and that there are no trade payables of
Borrower outstanding for more than sixty (60) days.
          
          (d)  ANNUAL REPORTS.  Within ninety (90) days after the
               --------------
end of each calendar year, Borrower will furnish or direct to be
furnished  to  Lender  a complete copy of the  annual  financial
statements  of  Borrower  and  REIT  audited  by  a  "Big  Five"
accounting firm or other independent certified public accountant
acceptable  to  Lender  in  accordance with  generally  accepted
accounting   principles   (which  audited   Borrower   financial
statements  shall contain a supplemental schedule  of  Operating
Lease  revenues on a property-by-property basis;  provided  that
such  supplemental  schedule will not  be  audited  separately).
Within  ninety  (90) days after the end of each  calendar  year,
Borrower shall furnish or cause the Operating Lessees to furnish
to  Lender detailed property-level operating statements (showing
annual activity) stating Operating Revenues, Operating Expenses,
Operating  Income and net cash flow for each of the  Properties.
Such   property-level  annual  financial  statements  shall   be
accompanied  by  (i)  a comparison of the  budgeted  income  and
expenses  and  the  actual income and  expenses  for  the  prior
calendar  year  and  (ii) a certificate executed  by  the  chief
financial officer of Borrower or the general partner of Borrower
stating that, to the best of such officer's knowledge, each such
annual   financial  statement  presents  fairly  the   financial
condition  and  the  results of operations  of  the  Properties;
provided  that,  with  respect to property-level  reports,  such
annual reports shall be prepared using the same accounting method
used  at  closing and Borrower agrees to notify  Lender  of  any
material changes in the method used for the preparation of  such
property-level reports upon the receipt of notice of such change
from  the Operating Lessee.  Annual financial statements of  the
Borrower and REIT shall be accompanied by an unqualified opinion
of  a  "Big Five" accounting firm or other independent certified
public accountant reasonably acceptable to Lender.
          
          (e)   CERTIFICATION;  SUPPORTING DOCUMENTATION.   Each
                ----------------------------------------
such   financial  statement  shall  be  in  scope   and   detail
satisfactory  to  Lender and certified by  the  chief  financial
representative of Borrower.
          
          (f)   ADDITIONAL REPORTS.  Borrower shall  deliver  to
                ------------------
Lender as soon as reasonably available but in no event later than
thirty (30) days after such items become available to Borrower in
final form:
               
               (i)    copies   of   any  final  engineering   or
          environmental reports, if any, prepared for Borrower or
          any  Operating  Lessee with respect to  an  Individual
          Property;

               (ii)  a  copy  of  any notice received  from  any
          environmental  authority having jurisdiction  over  an
          Individual  Property  with  respect  to  a   condition
          existing or alleged to exist or emanate from or at  an
          Individual Property; and
               
               (iii)     copies of any financial statements  and
          reports  required to be delivered to Borrower  by  any
          Operating Lessees pursuant to the Operating Leases.
          
          SECTION  9.2   ACCOUNTING PRINCIPLES .  All  financial
                         ---------------------
statements  shall  be  prepared  in  accordance  with  generally
accepted accounting principles in the United States of America as
in  effect on the date so indicated and consistently applied and
the  Uniform System of Accounts for Hotels, current edition  (or
such other accounting basis reasonably acceptable for Lender).
          
          SECTION 9.3  OTHER INFORMATION; ACCESS.  Borrower shall
                       -------------------------
deliver   to   Lender  such  reasonable  additional  information
regarding Borrower, its subsidiaries, its business, any Borrower
Party,  and any of the Properties within thirty (30) days  after
Lender's  request  therefor.  Borrower shall  permit  Lender  to
examine such records, books and papers of Borrower which reflect
upon its financial condition and the income and expenses of each
of the Properties.
          
          SECTION   9.4   FORMAT OF DELIVERY.   Any   reports,
                          ------------------
statements  or other information required to be delivered  under
this  Agreement shall be delivered (a) in paper form, (b)  on  a
diskette,  when available, and (c) if requested  by  Lender  and
within the capabilities of Borrower's data systems without change
or modification thereto, in electronic form and prepared using a
Microsoft  Word  for Windows or WordPerfect  for  Windows  files
(which  files  may be prepared using a spreadsheet  program  and
saved as word processing files).
                                
                                
                           ARTICLE 10
                                
                           COVENANTS
                           ---------
          
          Borrower covenants and agrees with Lender as follows:
          
          SECTION 10.1  DUE ON SALE AND ENCUMBRANCE; TRANSFERS OF 
                        -----------------------------------------
INTERESTS.
---------
          
          (a)   Subject to the provisions of Sections 2.4,  2.5,
2.6, 8.28(d)(iii), 10.1(b) and 10.1(d), without the prior written
consent of Lender, neither Borrower nor any other Person  having
an  ownership  or  beneficial interest in Borrower  shall  sell,
transfer,  convey,  mortgage, encumber,  pledge  (including  the
exercise  thereof),  or  assign  any  interest  in  any  of  the
Properties  or  any part thereof or further encumber,  alienate,
grant a Lien or grant any other interest in any of the Properties
or  any  part thereof, whether voluntarily or involuntarily,  in
violation  of  the  covenants and conditions set  forth  in  the
Mortgage.
          
          (b)  Notwithstanding anything to the contrary contained
in  this  Agreement, the Mortgages or any other Loan  Documents,
Lender's  consent shall not be required for any of 
the following sales, transfers, assignments, pledges, conveyances or
encumbrances, provided that Lender has received payment in  full
of all its actual expenses incurred in connection therewith:
                    
                    (i)   with  respect  to the  REIT,  (A)  any
          transfer  of  all  or any portion  of  any  shares  of
          beneficial  interests of the REIT for so long  as  the
          shares of the REIT continue to be publicly traded on a
          national  stock  exchange  and  (B)  the  issuance  of
          additional shares of the REIT;
                    
                    (ii)   with   respect   to   the   Operating
          Partnership,  (A) any transfer of limited  partnership
          interests  in the Operating Partnership  and  (B)  the
          issuance  of additional limited partnership  units  or
          other securities, even if such issuance results  in  a
          reduction of the partnership interest of the  REIT  in
          the Operating Partnership, provided that, after giving
          effect   to  such  transfer  or  series  of  transfers
          described in (A) or (B), the REIT owns more than fifty-
          one  percent (51%) of the partnership interests of the
          Operating Partnership; or
                    
                    (iii)     a Fundamental Transaction relating
          to the REIT or the Operating Partnership.
          
          (c)  As used herein, the term "Fundamental Transaction"
shall mean any acquisition by, merger with or consolidation with
or into, or sale of substantially all of its assets to, an entity
(the  "Successor") in which the following conditions  have  been
satisfied as of the consummation of the transaction:
                    
                    (i)    the   Successor  owns,  directly   or
          indirectly,  substantially all the  assets  which  the
          Operating Partnership owned immediately prior  to  the
          effective date of such merger, consolidation or sale;
                    
                    (ii)  the  Successor agrees  in  writing  to
          assume  all  obligations of the Operating  Partnership
          under  the  Loan  Documents  to  which  the  Operating
          Partnership is a party;
                    
                    (iii)      upon  the  consummation  of  such
          transaction,  Successor shall either  be  owned  by  a
          Qualified  Resultant Owner or the Successor  shall  be
          owned   by  the  executive  management  of  the   REIT
          immediately prior to such transfer;
                    
                    (iv)  Lender  shall  have  confirmations  in
          writing  from the Rating Agencies to the  effect  that
          such  transfer  will not result in a re-qualification,
          reduction or withdrawal of any rating then assigned to
          any Securities in a Securitization;
                    
                    (v)  with respect to any Individual Property
          that  is  the  subject of a Management Agreement,  the
          Manager shall be either the Manager immediately  prior
          to  such transfer or a Qualified Manager, and any  new
          Management  Agreement shall be reasonably satisfactory
          to Lender;
                    
                    (vi) with respect to any Individual Property
          that  is  the  subject  of  an  Operating  Lease,  the
          Operating Lessee shall be either the Operating  Lessee
          immediately  prior  to such transfer  or  a  Qualified
          Operating Lessee, and any new Operating Lease shall be
          reasonably satisfactory to Lender;
                    
                    (vii)     Lender shall have received a Legal
          non-consolidation   opinion  of   Borrower's   counsel
          reasonably  acceptable to Lender with respect  to  any
          Successor;
                    
                    (viii)    The Properties will be owned by one
          or more special purpose bankruptcy remote entities and
          a  non-consolidation opinion acceptable to Lender  and
          the Rating Agencies has been delivered; and
                    
                    (ix) Lender has received no less than forty-
          five (45) days' prior written notice of such transfer.
          
          (d)   Lender's consent to the sale or transfer of  all
Properties (and not less than all) to one purchaser will not  be
unreasonably  withheld  after  consideration  of  all   relevant
factors, provided that:
               
               (i)  no  Event of Default or event which with the
                    giving of notice or the passage of time would
                    constitute  an Event of Default  shall  have
                    occurred and remain uncured;
               
               (ii) the  proposed  transferee (the "Transferee")
                    and  each  indemnitor shall be  a  reputable
                    Person of good character, creditworthy, with
                    sufficient  financial worth considering  the
                    obligations   assumed  and  undertaken,   as
                    evidenced by financial statements and  other
                    information reasonably requested by Lender;
               
               (iii)      the  Transferee, each Operating Lessee
                    (if  changed), and any Manager (if  changed)
                    shall  have  sufficient  experience  in  the
                    ownership   and  management  of   properties
                    similar to the Property, and Lender shall be
                    provided with reasonable evidence thereof;
               
               (iv) if  a Securitization has taken place, Lender
                    shall have confirmations in writing from the
                    Rating  Agencies  to the  effect  that  such
                    transfer   will   not  result   in   a   re-
                    qualification, reduction or withdrawal of any
                    rating then assigned to any Securities issued
                    in connection with such Securitization;
               
               (v)  Lender    shall   have   received   evidence
                    satisfactory  to it (which shall  include  a
                    legal non-consolidation opinion of Borrower's
                    counsel reasonably acceptable to Lender) that
                    the  single  purpose nature  and  bankruptcy
                    remoteness  of  Borrower (and the  Operating
                    Lessee,   if   changed)  its   shareholders,
                    partners,  or members, as the case  may  be,
                    following  such transfers are in  accordance
                    with the standards of the Rating Agencies;
               
               (vi) the   Transferee  shall  have  executed  and
                    delivered  to Lender an assumption agreement
                    in  form and substance acceptable to Lender,
                    evidencing  such Transferee's  agreement  to
                    abide and be bound by the terms of the Note,
                    the  Mortgages and the other Loan Documents,
                    together  with such indemnifications,  legal
                    opinions and title insurance endorsements as
                    may  be reasonably requested by Lender,  and
                    Lender  shall  have  received  subordination
                    agreements  in a form acceptable  to  Lender
                    with  respect to any new Operating Lease  or
                    Management Agreement; and
               
               (vii)Lender shall have received an assumption
                    fee  equal to one percent (1%) of  the  then
                    unpaid  principal balance  of  the  Note  in
                    addition  to  the payment of all  costs  and
                    expenses  incurred by Lender  in  connection
                    with  such  assumption (including reasonable
                    attorney's fees and costs).
          
          SECTION 10.2  TAXES; UTILITY CHARGES.  Borrower  shall
                        ----------------------
pay  before  any fine, penalty, interest or cost  may  be  added
thereto,  and shall not enter into any agreement to  defer,  any
real  estate taxes and assessments, franchise taxes and charges,
and  other governmental charges (the "TAXES") that may become  a
Lien upon any of the Properties or become payable during the term
of the Loan; provided, however; Borrower may contest the validity
             --------  -------
of Taxes so long as (a) Borrower notifies Lender that it intends
to  contest  such Taxes, (b) Borrower provides  Lender  with  an
indemnity,  bond  or other security reasonably  satisfactory  to
Lender assuring the discharge of Borrower's obligations for such
Taxes,  including  interest  and  penalties,  (c)  Borrower   is
diligently  contesting the same by appropriate legal proceedings
in  good faith and at its own expense and concludes such contest
prior to the tenth (10th) day preceding the earlier to occur  of
the Maturity Date or the date on which the Individual Property is
scheduled to be sold for non-payment, (d) Borrower promptly upon
final  determination thereof pay the amount of any  such  Taxes,
together  with all costs, interest and penalties  which  may  be
payable  in  connection therewith; and (e)  notwithstanding  the
foregoing, Borrower shall immediately upon request of Lender pay
any such Taxes notwithstanding such contest if, in the opinion of
Lender,  any Individual Property or any part thereof or interest
therein  may  be in danger of being sold, forfeited, foreclosed,
terminated,  cancelled or lost. Lender may  pay  over  any  cash
deposit or part thereof to the claimant entitled thereto at  any
time  when, in the judgment of Lender, the entitlement  of  such
claimant is established.  Borrower's compliance with Section 5.4
of  this  Agreement relating to impounds for Taxes  shall,  with
respect to payment of such Taxes, be deemed compliance with this
Section  10.2.   Borrower shall not suffer or permit  the  joint
assessment of any of the Properties with any other real property
constituting  a  separate tax lot or  with  any  other  real  or
personal property.  Borrower shall promptly pay for all  utility
services provided to each of the Properties.
          
          SECTION 10.3  OPERATING LEASE.  Borrower shall hold and
                        ---------------
maintain, or shall cause Operating Lessees to hold and maintain,
all  necessary licenses, certifications and permits required  by
law.   Borrower  shall  fully  perform  all  of  its  covenants,
agreements and obligations under the Operating Leases.
          
          SECTION   10.4   OPERATION;  MAINTENANCE;  INSPECTION.
                           ------------------------------------
Borrower shall observe and comply, or, pursuant to the Operating
Leases,  cause Operating Lessees to observe and comply,  in  all
material respects, with the legal requirements applicable to the
ownership, use and operation of each of the Properties.  Borrower
shall  maintain  or,  pursuant to the  Operating  Leases,  cause
Operating  Lessees to maintain, each of the Properties  in  good
condition  and repair any damage or casualty within a reasonable
period  of time after such damage or casualty occurs.   Borrower
shall   permit  Lender  and  its  agents,  representatives   and
employees,  during normal business hours, upon reasonable  prior
notice to Borrower, to inspect any of the Properties and conduct
such environmental and engineering studies as Lender may require,
provided such inspections and studies do not materially interfere
with the use and operation of the Properties.
          
          SECTION  10.5  TAXES ON SECURITY.  Borrower shall  pay
                         -----------------
all  taxes,  charges, filing, registration and  recording  fees,
excises and levies payable with respect to the Note or the liens
created  or  secured by the Loan Documents, other  than  income,
franchise and doing business taxes imposed on Lender.  If  there
shall be enacted any law (a) deducting the Loan from the value of
any of the Properties for the purpose of taxation, (b) affecting
any  Lien  on the Properties, or (c) changing existing  laws  of
taxation of mortgages, deeds of trust, security deeds, or  debts
secured  by  real property, or changing the manner of collecting
any  such  taxes, Borrower shall pay to Lender within three  (3)
Business Days all taxes, costs and charges for which Lender is or
may be liable as a result thereof; however, if such payment would
be  prohibited  by law or would render the Loan  usurious,  then
instead  of  collecting  such payment, Lender  may  declare  all
amounts owing under the Loan Documents to be immediately due and
payable,  including, in addition, a payment by  Borrower  of  an
amount  equal  to the Yield Maintenance Premium  that  would  be
required if a Defeasance Event had occurred.
          
          SECTION  10.6  LEGAL EXISTENCE; NAME, ETC..   Borrower
                         ---------------------------
and  each  SPC Party shall preserve and keep in full  force  and
effect its entity status, franchises, rights and privileges under
the  laws of the state of its formation, and all qualifications,
licenses  and  permits  applicable to  the  ownership,  use  and
operation  of the Properties.  Neither Borrower nor any  general
partner or managing member of Borrower shall wind up, liquidate,
dissolve,  reorganize, merge, or consolidate with  or  into,  or
convey,  sell, assign, transfer, Lease, or otherwise dispose  of
all  or  substantially  all of its assets,  or  acquire  all  or
substantially all of the assets of the business of any Person, or
permit  any  subsidiary  or Affiliate  of  Borrower  to  do  so.
Borrower  shall not change its name, identity, or organizational
structure,  or  the  location of its chief executive  office  or
principal  place  of  business unless Borrower  (a)  shall  have
obtained  the  prior written consent of Lender to  such  change,
which  consent  (except with respect to  a proposed change of
Borrower's  organizational structure) shall not be  unreasonably
withheld,  delayed or conditioned, and (b) shall have taken  all
actions  necessary or requested by Lender to file or  amend  any
financing   statement  or  continuation  statement   to   assure
perfection and continuation of perfection of security  interests
under the Loan Documents.
          
          SECTION  10.7   FURTHER ASSURANCES.   Borrower  shall
                          ------------------
promptly  (a) cure any defects in the execution and delivery  of
the Loan Documents, and (b) execute and deliver, or cause to  be
executed and delivered, all such other documents, agreements and
instruments as Lender may reasonably request to further evidence
and  more fully describe the collateral for the Loan, to correct
any  omissions  in  the Loan Documents, to perfect,  protect  or
preserve any liens created under any of the Loan Documents, or to
make any recordings, file any notices, or obtain any consents, as
may   be  necessary  or  appropriate  in  connection  therewith.
Borrower grants Lender an irrevocable power of attorney  coupled
with an interest for the purpose of exercising and perfecting, in
a reasonable manner, any and all rights and remedies available to
Lender  under the Loan Documents, at law and in equity, pursuant
to this Section 10.7, if Borrower shall fail to do so within ten
(10) days after written request by Lender.
          
          SECTION 10.8  ESTOPPEL CERTIFICATES.  Borrower, within
                        ---------------------
ten (10) Business Days after request, shall furnish to Lender  a
written  statement, duly acknowledged, setting forth the  amount
due  on the Loan, the terms of payment of the Loan, the date  to
which  interest has been paid, whether any offsets  or  defenses
exist  against  the Loan and, if any are alleged to  exist,  the
nature  thereof  in  detail, and such other  matters  as  Lender
reasonably may request.
          
          SECTION 10.9  NOTICE OF CERTAIN EVENTS.  Borrower shall
                        ------------------------
promptly notify Lender of (a) any Potential Default or Event  of
Default,  together with a detailed statement of the steps  being
taken to cure such Potential Default or Event of Default; (b) any
notice  of  default received by Borrower under other obligations
relating  to  any  of  the Properties or otherwise  material  to
Borrower's  business; and (c) any threatened or  pending  legal,
judicial or regulatory proceedings, including any dispute between
Borrower  and any governmental authority, affecting Borrower  or
any of the Properties.
          
          SECTION   10.10 INDEMNIFICATION.   Borrower   shall
                          ---------------
protect,  defend,  indemnify  and save  harmless  (collectively,
"INDEMNIFY")  Lender  its  shareholders,  directors,   officers,
employees   and   agents  from  and  against  all   liabilities,
obligations, claims, damages, penalties, causes of action, costs
and expenses (including without limitation reasonable attorneys'
fees and expenses) (collectively, the "CLAIMS"), imposed upon or
incurred by or asserted against Lender by reason of (a) ownership
of  the  Mortgages,  the Properties or any interest  therein  or
receipt  of any rents; (b) any accident, injury to or  death  of
persons  or loss of or damage to property occurring  in,  on  or
about  any  of  the  Properties or any part thereof  or  on  the
adjoining sidewalks, curbs, adjacent property or adjacent parking
areas, streets or ways; (c) any use, nonuse or condition in,  on
or  about  any of the Properties or any part thereof or  on  the
adjoining sidewalks, curbs, adjacent property or adjacent parking
areas, streets or ways; (d) performance of any labor or services
or  the furnishing of any materials or other property in respect
of any of the Properties or any part thereof; and (e) the failure
of any Person to file timely with the Internal Revenue Service an
accurate Form 1099-B, Statement for Recipients of Proceeds  from
Real Estate, Broker and Barter Exchange Transactions, which  may
be  required in connection with this Agreement, or to  supply  a
copy thereof in a timely fashion to the recipient of the proceeds
of  the  transaction in connection with which this Agreement  is
made;  provided  that, notwithstanding the  foregoing,  Borrower
shall not be required to Indemnify Lender to the extent that such
Claims  are  caused  by  Lender's gross  negligence  or  willful
misconduct.   Any  amounts payable to Lender by  reason  of  the
application of this section shall become due and payable  within
three  (3) Business Days after Borrower receives written  notice
that such amounts are due and payable and shall bear interest at
the  Default  Rate from the date loss or damage is sustained  by
Lender until paid.
          
          SECTION   10.11   PAYMENT FOR LABOR AND MATERIALS.
                            -------------------------------
Borrower  will  promptly pay when due all bills  and  costs  for
labor, materials, and specifically fabricated materials incurred
in  connection with any Individual Property and never permit  to
exist  beyond the due date thereof in respect of any  Individual
Property or any part thereof any lien or security interest, even
though  inferior to the liens and the security interest  hereof,
and  in any event never permit to be created or exist in respect
of  any  Individual Property or any part thereof  any  other  or
additional  lien or security interest other than  the  liens  or
security interests hereof, except for the Permitted Encumbrances.
          
          SECTION  10.12   ALTERATIONS.  Borrower  shall  obtain
                           -----------
Lender's  prior  written consent, which  consent  shall  not  be
unreasonably conditioned, withheld or delayed to any alterations
to any Improvements on any Individual Property that may alter the
purposes or significantly detract from the value or significantly
impair   the  revenue-producing  capability  of  the  Individual
Property  or adversely affect the ability of Borrower to  comply
with the provisions hereof or have a material adverse effect  on
Borrower's financial condition, the use, operation or  value  of
any Individual Property or the Net Operating Income with respect
to  the  Individual Property, other than (a) tenant  improvement
work performed pursuant to the terms of any Lease executed on or
before  the  date hereof, (b) tenant improvement work  performed
pursuant to the terms and provisions of a Lease and not adversely
affecting  any  structural component of  any  Improvements,  any
utility  or  HVAC  system contained in any Improvements  or  the
exterior of any building constituting a part of any Improvements,
or  (c) alterations performed in connection with the restoration
of the Individual Property after the occurrence of a casualty in
accordance with the terms and provisions of this Agreement.   If
the  total  unpaid  amounts  due and  payable  with  respect  to
alterations to the Improvements at one Individual Property (other
than such amounts to be paid or reimbursed by tenants under  the
Leases)  shall  at  any time exceed five  percent  (5%)  of  the
Release  Amount  for  such Individual Property  (the  "THRESHOLD
AMOUNT"), Borrower shall promptly deliver to Lender as  security
for  the payment of such amounts and as additional security  for
Borrower's  obligations  under the Loan  Documents  any  of  the
following:  (1) cash, (2) U.S. Obligations, (3) other securities
having  a  rating acceptable to Lender and that  the  applicable
Rating  Agencies have confirmed in writing will not, in  and  of
itself, result in a downgrade, withdrawal or qualification of the
initial,  or,  if  higher,  then  current  ratings  assigned  in
connection with any Securitization, or (4) a completion bond  or
irrevocable letter of credit (payable on sight draft only) issued
by  a financial institution having a rating by Standard & Poor's
Ratings Group of not less than A-1+ if the term of such bond  or
letter of credit is no longer than three (3) months or, if  such
term  is  in  excess of three (3) months, issued by a  financial
institution having a rating that is acceptable to Lender and that
the  applicable Rating Agencies have confirmed in  writing  will
not,  in  and  of itself, result in a downgrade,  withdrawal  or
qualification of the initial, or, if higher, then current ratings
assigned  in connection with any Securitization.  Such  security
shall  be  in an amount equal to the excess of the total  unpaid
amounts with respect to alterations to the Improvements  on  the
applicable  Individual Property (other than such amounts  to  be
paid  or  reimbursed  by  tenants under  the  Leases)  over  the
Threshold Amount and may be reduced from time to time by the cost
estimated  by  Lender  to terminate any of the  alterations  and
restore  the  applicable  Individual  Property  to  the   extent
necessary  to prevent any material adverse effect  on  the  use,
operation or value of the applicable Individual Property or  the
Net Operating Income with respect to the Individual Property.
          
          SECTION 10.13  HANDICAPPED ACCESS.
                         ------------------
          
          (a)  Borrower agrees that the Properties shall, in all
material  respects,  comply to the extent  applicable  with  the
requirements of the Americans with Disabilities Act of 1990, the
Fair Housing Amendments Act of 1988, all state and local laws and
ordinances   related  to  handicapped  access  and  all   rules,
regulations,  and  orders  issued  pursuant  thereto  including,
without   limitation,  the  Americans  with   Disabilities   Act
Accessibility   Guidelines   for   Buildings   and    Facilities
(collectively, "ACCESS LAWS").
          
          (b)  Borrower agrees to give prompt notice to Lender of
the receipt by Borrower of any complaints related to violation of
any  Access  Laws and of the commencement of any proceedings  or
investigations which relate to compliance with applicable Access
Laws.
          
          SECTION   10.14   CERTAIN HOTEL/FRANCHISE COVENANTS.
                            ---------------------------------
Borrower further covenants and agrees with Lender as follows:
          
          (a)    Subject to the provisions of Sections 11.12 and
11.13  hereof,  Borrower shall cause the hotel  located  on  the
Individual  Property to be operated pursuant to each  applicable
Operating Lease, Franchise Agreement and Management Agreement.
          
          (b)  Borrower shall:
                    
                    (i)   to  the extent that Borrower  has  the
          right or ability to do so pursuant to any document  or
          other agreement, not permit the termination, extension
          or  modification  or entering into  of  any  Franchise
          Agreement,  Operating  Lease or  Management  Agreement
          without  Lender's prior written consent, which consent
          shall not be unreasonably withheld or delayed;
                    
                    (ii) notify Lender of any default under  any
          Franchise  Agreement, Operating  Lease  or  Management
          Agreement  of  which  it  is aware  within  three  (3)
          Business Days after receiving notice of such default;
                    
                    (iii)      deliver to Lender a copy of  each
          financial    statement,   business    plan,    capital
          expenditures plan, notice, report and estimate received
          by it under any Franchise Agreement, Operating Lease or
          Management  Agreement within three (3)  Business  Days
          after receiving such items; and
                    
                    (iv)  to  the extent that Borrower  has  the
          right or ability to do so pursuant to any document  or
          other agreement, enforce the performance and observance
          of  all of the covenants and agreements required to be
          performed and/or observed by the Franchisor under each
          Franchise  Agreement, the Operating Lessee under  each
          Operating  Lease and the Manager under each Management
          Agreement within three (3) Business Days after becoming
          aware of a violation of such covenants or agreements.
          
          (c)    Borrower  shall  not,  without  Lender's  prior
consent,  which  consent  shall not  be  unreasonably  withheld,
conditioned  or  delayed,  enter  into  transactions  with   any
Affiliate, including without limitation any arrangement providing
for  the  leasing  or managing of the hotel  on  any  Individual
Property, the rendering or receipt of services or the purchase or
sale  of  inventory, except any such transaction in the ordinary
course  of  business  of Borrower if the  monetary  or  business
consideration  arising  therefrom  would  be  substantially   as
advantageous   to   Borrower  as  the   monetary   or   business
consideration that would obtain in a comparable transaction with
a person not an Affiliate of Borrower.
                                
                                
                           ARTICLE 11
                                
                        EVENTS OF DEFAULT
                        -----------------
          
          Each of the following shall constitute a default (each,
an "EVENT OF DEFAULT") under the Loan:
          
          SECTION 11.1  PAYMENTS.  Borrower's failure to pay any
                        --------
regularly scheduled installment of principal, interest or  other
amount due under the Loan Documents within five (5) days of (and
including) the day it is due, or Borrower's failure to  pay  the
Loan at the Maturity Date, whether by acceleration or otherwise.
          
          SECTION   11.2   INSURANCE.   Borrower's  failure   to
                           ---------
maintain  insurance  as  required  under  Section  5.1  of  this
Agreement,  provided that Borrower's failure  to  maintain  such
insurance is not solely the result of Lender's failure  to  make
funds  available  from  the Tax Insurance  Escrow  Fund  to  pay
insurance premiums as may be required pursuant to Section 5.4.
          
          SECTION  11.3   SINGLE PURPOSE ENTITY.   If  Borrower
                          ---------------------
breaches any of its covenants contained in Section 8.28  hereof;
provided, however, that in the event of a breach of Section 8.28,
such breach shall not constitute an Event of Default in the event
that  (i) such breach is immaterial and (ii) within thirty  (30)
days  of  the request of Lender, Borrower delivers to Lender  an
opinion of counsel, or a modification of the Insolvency Opinion,
to  the  effect  that such breach shall not in any  way  impair,
negate or amend the opinions rendered in such Insolvency Opinion,
which  opinion  or modification and any counsel delivering  such
opinion  or  modification shall be acceptable to Lender  is  its
reasonable discretion.
 
          SECTION  11.4   INSOLVENCY OPINION.   If  any  of  the
                          ------------------
assumptions contained in the insolvency opinion, or in any other
"non-consolidation"  opinion delivered to Lender  in  connection
with  the  Loan,  or  in  any other "non-consolidation"  opinion
delivered  subsequent to the closing of the Loan,  is  or  shall
become untrue in any material respect.
          
          SECTION 11.5  TAXES  If any of the Taxes are not  paid
                        -----
when  the  same  are  due and payable; provided,  however,  that
Borrower's compliance with the provisions of Section 5.4  hereof
relating to impounds for Taxes shall, with respect to payment of
such Taxes, be deemed compliance with this Section 11.5.
          
          SECTION  11.6   SALE,  ENCUMBRANCE,  ETC.  The   sale,
                          ------------------------
transfer, conveyance, pledge, mortgage or assignment of any part
or all of an Individual Property, or any interest therein, or of
any  interest in Borrower, in violation of this Agreement or the
Mortgage.
          
          SECTION  11.7   REPRESENTATIONS AND WARRANTIES.   Any
                          ------------------------------
representation or warranty made in any Loan Document proves to be
untrue  in  any  material  respect when  made  or  deemed  made;
provided,  however,  that  any  such  untrue  representation  or
warranty  shall not constitute an Event of Default in the  event
that such untrue representation or warranty (i) is not material,
(ii) is susceptible of cure and (iii) is cured by Borrower within
thirty (30) days following written notice from Lender to Borrower
setting forth such untrue representation or warranty.
          
          SECTION  11.8  OTHER ENCUMBRANCES.  Any default  while
                         ------------------
continuing under any document or instrument, other than the Loan
Documents,  evidencing  or creating  a  Lien  on  an  Individual
Property or any part thereof to the extent such default  extends
beyond any applicable cure period set forth in such document  or
instrument.
          
          SECTION   11.9    INVOLUNTARY BANKRUPTCY OR OTHER
                            -------------------------------
PROCEEDING.   Commencement  of  an  involuntary  case  or  other
----------
proceeding  against  Borrower or any  Borrower  Party  (each,  a
"Bankruptcy  Party") which seeks liquidation, reorganization  or
other relief with respect to it or its debts or other liabilities
under  any  bankruptcy, insolvency or other similar law  now  or
hereafter  in  effect  or seeks the appointment  of  a  trustee,
receiver, liquidator, custodian or other similar official of  it
or  any  of  its  property, and such involuntary case  or  other
proceeding shall remain undismissed or unstayed for a period  of
60 days; or an order for relief against a Bankruptcy Party shall
be entered in any such case under the Federal Bankruptcy Code.
          
          SECTION 11.10  VOLUNTARY PETITIONS, ETC.  Commencement
                         ------------------------
by  a  Bankruptcy Party of a voluntary case or other  proceeding
seeking liquidation, reorganization or other relief with respect
to itself or its debts or other liabilities under any bankruptcy,
insolvency or other similar law or seeking the appointment of  a
trustee,  receiver,  liquidator,  custodian  or  other   similar
official  for  it  or  any  of its property,  or  consent  by  a
Bankruptcy Party to any such relief or to the appointment of  or
taking possession by any such official in an involuntary case or
other  proceeding  commenced against it,  or  the  making  by  a
Bankruptcy  Party  of a general assignment for  the  benefit  of
creditors, or the failure by a Bankruptcy Party, or the admission
by  a  Bankruptcy Party in writing of its inability, to pay  its
debts generally as they become due, or any action by a Bankruptcy
Party to authorize or effect any of the foregoing.

          SECTION  11.11   COVENANTS.   Borrower's  failure   to
                           ---------
perform or observe any of its agreements and covenants contained
in  this Agreement or in any of the other Loan Documents and not
specified  above in Sections 11.1 to 11.10 or below in  Sections
11.12 to 11.13, and the continuance of such failure for (i)  ten
(10)  days  after notice by Lender to Borrower if  such  failure
involves the failure to make payments on a monetary obligation or
(ii) thirty (30) days after notice by Lender to Borrower if such
failure does not involve a failure to make payments on a monetary
obligation; however, subject to any shorter period for curing any
failure  by  Borrower  as specified in any  of  the  other  Loan
Documents, Borrower shall have an additional sixty (60) days  to
cure  such  failure  if (a) such failure does  not  involve  the
failure  to  make  payments on a monetary obligation;  (b)  such
failure cannot reasonably be cured within thirty (30) days;  and
(c) Borrower is diligently undertaking to cure such default.
          
          SECTION  11.12  OPERATING LEASES.  (a) If there  is  a
                          ----------------
material default by Borrower under an Operating Lease beyond any
applicable  notice  and  cure period  which  default,  alone  or
together  with  any other such defaults, has a material  adverse
affect on the Properties as security for the Loan; provided that
a default alleged by an Operating Lessee shall not constitute an
Event  of  Default if Borrower is diligently and in  good  faith
contesting  such alleged default based upon a good faith,  bona-
fide  dispute with respect thereto, pursuant to legal action  or
arbitration permitted under such Operating Lease or agreed to by
such  Operating Lessee; or (b) if an Operating Lease is amended,
modified or terminated in violation of Section 8.30(b) hereof.
          
          SECTION  11.13   FRANCHISE AGREEMENTS AND MANAGEMENT
                           -----------------------------------
AGREEMENTS.  (a) If there is (A) a material default by Borrower
----------
of  any  material  provision  of  a  Franchise  Agreement  or  a
Management  Agreement  which,  pursuant  to  the  terms  of  the
applicable Operating Lease, is an obligation of Borrower or (B) a
material  default  by  an  Operating Lessee  under  a  Franchise
Agreement  or a Management Agreement (i) which is not  cured  by
Borrower or (ii) which Borrower is not enforcing its rights under
the  applicable Operating Lease with respect to,  in  a  prudent
business  manner  pursuant  to  Borrower's  reasonable   prudent
business  judgment, and which event under (i) or (ii)  alone  or
together with other such defaults has a material adverse  affect
on the Properties as security for the Loan; or (b) if a Franchise
Agreement  or  a  Management  Agreement  is  amended,  modified,
terminated  or entered into in violation of Sections 8.30(a)  or
8.29 hereof, respectively.
                                
                                
                           ARTICLE 12
                                
                            REMEDIES
                            --------
          
          SECTION 12.1  REMEDIES - INSOLVENCY EVENTS.  Upon  the
                        ----------------------------
occurrence of any Event of Default described in Section 11.9  or
11.10, all amounts due under the Loan Documents immediately shall
become  due and payable, all without written notice and  without
presentment,  demand,  protest, notice of protest  or  dishonor,
notice  of intent to accelerate the maturity thereof, notice  of
acceleration  of  the maturity thereof, or any other  notice  of
default of any kind, all of which are hereby expressly waived by
Borrower.
          
          SECTION 12.2  REMEDIES - OTHER EVENTS.
                        -----------------------
          
          (a)   Except as set forth in Section 12.1 above, while
any  Event of Default exists and is continuing, Lender  may  (i)
declare the entire Loan to be immediately due and payable without
presentment,  demand,  protest, notice of protest  or  dishonor,
notice  of intent to accelerate the maturity thereof, notice  of
acceleration of the maturity thereof, or other notice of default
of  any  kind,  all  of  which are hereby  expressly  waived  by
Borrower,  and  (ii) exercise all rights and  remedies  therefor
under the Loan Documents and at law or in equity.
          
          (b)   During the continuation of an Event of  Default,
with  respect to Borrower and the Properties, nothing  contained
herein  or  in  any other Loan Document shall  be  construed  as
requiring  Lender to resort to any Individual Property  for  the
satisfaction of any of the Debt in preference or priority to any
other Individual Property, and Lender may seek satisfaction  out
of  all  of the Properties or any part thereof, in its  absolute
discretion  in  respect of the Debt.  In  addition,  during  the
continuation of an Event of Default, Lender shall have the right
from  time to time to partially foreclose the Mortgages  in  any
manner and for any amounts secured by the Mortgages then due and
payable as determined by Lender in its sole discretion including,
without  limitation, the following circumstances:   (i)  in  the
event Borrower defaults beyond any applicable grace period in the
payment  of  one  or more scheduled payments  of  principal  and
interest,  Lender may foreclose one or more of the Mortgages  to
recover  such  delinquent payments, or (ii) in the event  Lender
elects  to accelerate less than the entire outstanding principal
balance  of  the Loan, Lender may foreclose one or more  of  the
Mortgages to recover so much of the principal balance of the Loan
as  Lender may accelerate and such other sums secured by one  or
more of the Mortgages as Lender may elect.  Notwithstanding  one
or more partial foreclosures, the Properties shall remain subject
to  the  Mortgages  to  secure payment of sums  secured  by  the
Mortgages and not previously recovered.
          
          (c)  During the continuation of an Event of Default or
with the prior written consent of Borrower, Lender shall have the
right  from  time to time to sever the Note and the  other  Loan
Documents  into one or more separate notes, mortgages and  other
security  documents  (the  "SEVERED LOAN DOCUMENTS")  in  such
denominations  as Lender shall determine in its sole  discretion
for purposes of evidencing and enforcing its rights and remedies
provided hereunder.  Borrower shall execute and deliver to Lender
from  time  to  time, promptly after the request  of  Lender,  a
severance  agreement and such other documents  as  Lender  shall
request  in  order  to  effect the severance  described  in  the
preceding   sentence,  all  in  form  and  substance  reasonably
satisfactory   to  Lender.   Borrower  hereby   absolutely   and
irrevocably  appoints  Lender as its true and  lawful  attorney,
coupled  with  an interest, in its name and stead  to  make  and
execute  all  documents  necessary or desirable  to  effect  the
aforesaid  severance,  Borrower  ratifying  all  that  its  said
attorney  shall do by virtue thereof; provided, however,  Lender
shall  not  make or execute any such documents under such  power
until  ten (10) days after notice has been given to Borrower  by
Lender  of  Lender's intent to exercise its  rights  under  such
power.   Except  as  may  be  required  in  connection  with   a
securitization  pursuant to Section 14.1  hereof,  (i)  Borrower
shall not be obligated to pay any costs or expenses incurred  in
connection with the preparation, execution, recording or  filing
of  the  Severed  Loan  Documents, and  (ii)  the  Severed  Loan
Documents  shall not contain any representations, warranties  or
covenants  not  contained in the Loan  Documents  and  any  such
representations  and warranties contained in  the  Severed  Loan
Documents will be given by Borrower only as of the Closing Date.
          
          SECTION   12.3    LENDER'S RIGHT TO PERFORM THE
                            -----------------------------
OBLIGATIONS.  If Borrower shall fail, refuse or neglect to  make
-----------
any payment or perform any act required from Borrower by the Loan
Documents,  then  while  any Event  of  Default  exists  and  is
continuing,  and without notice to or demand upon  Borrower  and
without waiving or releasing any other right, remedy or recourse
Lender may have because of such Event of Default, Lender may (but
shall not be obligated to) make such payment or perform such act
for the account of and at the expense of Borrower, and shall have
the  right to enter upon the applicable Individual Property  for
such purpose and to take all such action thereon and with respect
to the applicable Individual Property as it may deem necessary or
appropriate.   If  Lender shall elect to pay any  sum  due  with
reference to the applicable Individual Property, Lender may do so
in  reliance on any bill, statement or assessment procured  from
the  appropriate governmental authority or other issuer  thereof
without   inquiring  into  the  accuracy  or  validity  thereof.
Similarly,  in  making  any payments  to  protect  the  security
intended  to  be  created  by  the Loan  Documents,  during  the
continuation of an Event of Default, Lender shall not be bound to
inquire  into the validity of any apparent or threatened adverse
title,  lien,  encumbrance, claim or  charge  before  making  an
advance  for  the  purpose of preventing or removing  the  same.
Borrower  shall  indemnify  Lender  for  all  losses,  expenses,
damages,  claims  and  causes  of action,  including  reasonable
attorneys'  fees,  incurred or accruing by reason  of  any  acts
performed  by  Lender  pursuant  to  the  provisions   of   this
Section  12.3.   All  sums  paid  by  Lender  pursuant  to  this
Section 12.3, and all other sums expended by Lender to which  it
shall  be  entitled  to be indemnified, together  with  interest
thereon  at  the Default Rate from the date of such  payment  or
expenditure until paid, shall constitute additions to the  Loan,
shall  be  secured by the Loan Documents and shall  be  paid  by
Borrower to Lender upon demand.
          
          SECTION  12.4  CROSS-DEFAULT; CROSS-COLLATERALIZATION;
                         --------------------------------------
WAIVER OF MARSHALLING OF ASSETS.
-------------------------------
          
          (a)   Borrower acknowledges that Lender has  made  the
Loan to Borrower upon the security of its collective interest in
the  Properties  and  in  reliance upon  the  aggregate  of  the
Properties  taken together being of greater value as  collateral
security  than  the  sum  of  the Properties  taken  separately.
Borrower  agrees  that  the Mortgages are  and  will  be  cross-
collateralized and cross-defaulted with each other so that (i) an
Event of Default under any of the Mortgages shall constitute  an
Event  of Default under each of the other Mortgages which secure
the  Note; (ii) an Event of Default under the Note or this  Loan
Agreement  shall  constitute  an Event  of  Default  under  each
Mortgage; and (iii) each Mortgage shall constitute security  for
the  Note as if a single blanket lien were placed on all of  the
Properties as security for the Note.
          
          (b)  To the fullest extent permitted by law, Borrower,
for itself and its successors and assigns, waives all rights to a
marshalling  of the assets of Borrower, Borrower's partners  and
others with interests in Borrower, and of the Properties, or to a
sale  in inverse order of alienation in the event of foreclosure
of  all  or  any of the Mortgages, and agrees not to assert  any
right under any laws pertaining to the marshalling of assets, the
sale  in  inverse order of alienation, homestead exemption,  the
administration  of  estates of decedents, or any  other  matters
whatsoever to defeat, reduce or affect the right of Lender under
the Loan Documents to a sale of the Properties for the collection
of the Debt without any prior or different resort for collection
or  of the right of Lender to the payment of the Debt out of the
net  proceeds  of the Properties in preference  to  every  other
claimant whatsoever.  In addition, Borrower, for itself and  its
successors and assigns, waives in the event of foreclosure of any
or all of the Mortgages, any equitable right otherwise available
to  Borrower  which  would  require the  separate  sale  of  the
Properties or require Lender to exhaust its remedies against any
Individual Property or any combination of the Properties  before
proceeding  against any other Individual Property or combination
of  Properties;  and  further in the event of  such  foreclosure
Borrower does hereby expressly consents to and authorizes, at the
option of Lender, the foreclosure and sale either separately  or
together of any combination of the Properties.
                                
                                
                           ARTICLE 13
                                
                    LIMITATIONS ON LIABILITY
                    ------------------------
          
          SECTION  13.1   LIMITATION ON LIABILITY.   Except  as
                          -----------------------
provided  below,  Borrower shall not be  personally  liable  for
amounts  due  under  the  Loan  Documents.   Borrower  shall  be
personally liable to Lender for any deficiency, loss  or  damage
suffered by Lender because of:  (a) Borrower's commission  of  a
criminal act, (b) the misapplication by Borrower or any Borrower
Party,  during the continuation of an Event of Default,  of  any
funds  derived  from an Individual Property, including  security
deposits,  insurance proceeds and condemnation awards;  (c)  the
fraud  or material misrepresentation by Borrower or any Borrower
Party  now or hereafter made in or in connection with  the  Loan
Documents  or  the Loan including any statements or certificates
delivered under the Loan Documents; (d) Borrower's collection of
rents  more  than  one  month in advance  or  entering  into  or
modifying  Leases,  or  receipt of monies  by  Borrower  or  any
Borrower Party in connection with the modification of any Leases,
in  violation  of  this  Agreement or  any  of  the  other  Loan
Documents;   (e)  during  the  continuation  of  an   Event   of
Default,  Borrower's failure to apply proceeds of rents  or  any
other  payments in respect of the Leases and other income of  an
Individual  Property or any other collateral  to  the  costs  of
maintenance and operation of an Individual Property and  to  the
payment  of taxes, lien claims, insurance premiums, Debt Service
and  other  amounts due under the Loan Documents; (f) Borrower's
interference  with  Lender's  exercise  of  rights   under   the
Assignment  of  Leases  and Rents; (g)   Borrower's  failure  to
maintain  insurance as required by this Agreement; (h)  physical
waste  to  an  Individual Property caused by the  negligence  or
willful  misconduct  of  Borrower,  its  agents,  employees,  or
contractors;   (i)  Borrower's  obligations  with   respect   to
environmental  matters under Article 6,  within  five  (5)  days
following  demand by Lender, hereof and the Hazardous  Materials
Indemnity Agreement; (j) Borrower's failure to pay for any loss,
liability  or  expense (including attorneys' fees)  incurred  by
Lender  arising out of any claim or allegation made by Borrower,
its successors or assigns, or any creditor of Borrower, that this
Agreement or the transactions contemplated by the Loan Documents
establishes  a  joint  venture,  partnership  or  other  similar
arrangement  between  Borrower and  Lender;  (k)  any  brokerage
commission  or  finder's  fees claimed in  connection  with  the
transactions contemplated by the Loan Documents or (l) Borrower's
indemnification of Lender set forth in Section 14.2 hereafter.
          
          Notwithstanding  anything  to  the  contrary  in  this
Agreement,  the  Note or any of the Loan Documents,  (i)  Lender
shall  not  be deemed to have waived any right which Lender  may
have   under  Section  506(a),  506(b),  1111(b)  or  any  other
provisions of the U.S. Bankruptcy Code to file a claim  for  the
full  amount of the Debt secured by the Mortgages or to  require
that  all  collateral shall continue to secure all of  the  Debt
owing to Lender in accordance with the Loan Documents, and  (ii)
the  Debt shall be fully recourse to Borrower in the event that:
(A) there is a default under Section 11.10 hereof; (B) subject to
Section  8.28(d)(iii), Borrower fails to obtain  Lender's  prior
written  consent to any subordinate financing or other voluntary
lien  encumbering any Individual Property; or (C) Borrower fails
to  obtain  Lender's  prior written consent to  any  assignment,
transfer,  or  conveyance  of  any Individual  Property  or  any
interest therein as required by the Loan Documents.
          
          SECTION  13.2   LIMITATION ON LIABILITY OF LENDER'S 
                          -----------------------------------
OFFICERS, EMPLOYEES, ETC.  Any obligation or liability whatsoever
------------------------
of Lender which may arise at any time under this Agreement or any
other  Loan  Document shall be satisfied,  if  at  all,  out  of
Lender's interest in the Properties only.  No such obligation or
liability shall be personally binding upon, nor shall resort for
the  enforcement  thereof be had to,  the  property  of  any  of
Lender's shareholders, directors, officers, employees or agents,
regardless  of whether such obligation or liability  is  in  the
nature of contract, tort or otherwise.
                                
                                
                           ARTICLE 14
                                
                         SECURITIZATION
          
          SECTION 14.1  SECURITIZATION.
                        --------------
          
          At  the request of the holder of the Note and, to  the
extent not already required to be provided by Borrower under this
Agreement, Borrower shall use reasonable efforts to satisfy  the
market  standards  to which the holder of the  Note  customarily
adheres or which may be reasonably required in the marketplace or
by  the Rating Agencies in connection with the sale of all or  a
portion  of the Note, the participation therein or one  or  more
successful   securitizations  of  rated  single  or  multi-class
securities (the "SECURITIES") secured by or evidencing ownership
interests  in  the  Note and the Mortgages   (such  sale  and/or
securitization,   the  "SECURITIZATION"),   including,   without
limitation, to:
          
          (a)  (i)  provide such financial and other information
with  respect  to  the  Properties,  Borrower,  REIT,  Operating
Partnership, each Operating Lessee and any Manager,
               
               (ii)  provide budgets relating to the Properties,
and
               
               (iii)      to  perform or permit or cause  to  be
performed or permitted such site inspection, appraisals,  market
studies,  environmental reviews and reports (Phase I's  and,  if
appropriate,  Phase  II's), engineering reports  and  other  due
diligence investigations of the Properties, as may be reasonably
requested by the holder of the Note or the Rating Agencies or as
may   be  necessary  or  appropriate  in  connection  with   the
Securitization (the "Securitization Information"), together,  if
customary, with appropriate verification and/or consents of  the
Securitization  Information  through  letters  of  auditors   or
opinions of counsel of independent attorneys acceptable to Lender
and the Rating Agencies;
          
          (b)   cause counsel to render opinions, which  may  be
relied  upon by the holder of the Note, the Rating Agencies  and
their respective counsel, agents and representatives, as to non-
consolidation, fraudulent conveyance, and true sale or any other
opinion customary in securitization transactions with respect to
the Properties and Borrower and its Affiliates, which counsel and
opinions shall be reasonably satisfactory to the holder  of  the
Note and the Rating Agencies;
          
          (c)  make such representations and warranties as of the
closing  date  of  the  Securitization  with  respect   to   the
Properties,  Borrower, and the Loan Documents as are customarily
provided in securitization transactions and as may be reasonably
requested  by the holder of the Note or the Rating Agencies  and
consistent  with  the facts covered by such representations  and
warranties  as  they  exist on the date thereof,  including  the
representations and warranties  made in the Loan Documents; and
          
          (d)  execute such amendments to the Loan Documents and
organizational  documents,  enter  into  a  lockbox  or  similar
arrangement with respect to the Rents and establish and fund such
reserve funds (including, without limitation, reserve funds  for
deferred  maintenance  and  capital  improvements)  as  may   be
requested  by the holder of the Note or the Rating  Agencies  or
otherwise to effect the Securitization; provided, however,  that
Borrower  shall  not be required to modify  or  amend  any  Loan
Document if such modification or amendment would (i) change  the
interest  rate,  the  stated maturity  or  the  amortization  of
principal  set forth in the Note, or (ii) modify  or  amend  any
other material economic term of the Loan.
          
          All reasonable third party costs and expenses incurred
by  Lender in connection with Borrower's complying with requests
made under this Section 14.1 shall be paid by Borrower.
          
          SECTION 14.2  SECURITIZATION INDEMNIFICATION.
                        ------------------------------
          
          (a)    Borrower  understands  that  certain   of   the
Securitization Information and the financial reports relating to
the  Properties  may  be  included in  disclosure  documents  in
connection   with   the   Securitization,   including,   without
limitation,  a  prospectus,  prospectus  supplement  or  private
placement memorandum (each, an "OFFERING DOCUMENT") and may also
be   included  in  filings  with  the  Securities  and  Exchange
Commission  pursuant to the Securities Act of 1933,  as  amended
(the  "SECURITIES ACT"), or the Securities and Exchange  Act  of
1934,  as  amended  (the "EXCHANGE ACT"), or  provided  or  made
available   to  investors  or  prospective  investors   in   the
Securities, the Rating Agencies, and service providers  relating
to  the Securitization.  In the event that the Offering Document
is  required  to be revised prior to the sale of all Securities,
Borrower  will cooperate with the holder of the Note in updating
the  Offering  Document  by providing  all  current  information
necessary to keep the Offering Document accurate and complete in
all material respects.
          
          (b)  Borrower agrees to provide in connection with each
of (i) a preliminary and a private placement memorandum or (ii) a
preliminary  and final prospectus or prospectus  supplement,  as
applicable,  an indemnification certificate (A) certifying  that
Borrower has carefully examined such memorandum or prospectus, as
applicable, and the sections and exhibits therein that  describe
the  Properties, the Loan, the Borrower and the Manager and such
sections   and  exhibits  (and  any  other  sections  reasonably
requested), to the best of Borrower's knowledge, do not  contain
any  untrue  statement of a material fact or  omit  to  state  a
material fact necessary in order to make the statements made, in
the  light of the circumstances under which they were made,  not
misleading,  (B) indemnifying Lender (and for purposes  of  this
Section  14.2, Lender hereunder shall include its  officers  and
directors),  any  Person  that  has  filed  or  may   file   the
registration   statement  relating  to  a  Securitization   (the
"REGISTRATION STATEMENT"), each of its directors,  each  of  its
officers  who  have signed the Registration Statement  and  each
person or entity who controls such Person within the meaning  of
Section  15 of the Securities Act or Section 20 of the  Exchange
Act,  and  Lender, each of its directors and each  person  who
controls  Lender  within  the  meaning  of  Section  15  of  the
Securities Act and Section 20 of the Exchange Act (collectively,
the  "UNDERWRITER GROUP") for any losses,  claims,  damages  or
liabilities  (the  "LIABILITIES")  to  which  Lender,   or   the
Underwriter  Group may become subject insofar as the Liabilities
arise  out of or are based upon any untrue statement or  alleged
untrue statement of any material fact contained in such sections
or  arise  out  of  or  are based upon the omission  or  alleged
omission to state therein a material fact required to be  stated
in such sections or necessary in order to make the statements in
such  sections or in light of the circumstances under which they
were  made, not misleading and (C) agreeing to reimburse  Lender
and  the  Underwriter  Group for any  legal  or  other  expenses
reasonably incurred by Lender in connection with investigating or
defending the Liabilities; provided, however, that Borrower will
                           --------  -------
be  liable in any such case under clauses (A), (B) or (C)  above
only to the extent that any such loss claim, damage or liability
arises  out  of  or is based upon any such untrue  statement  or
omission  made  therein in reliance upon and in conformity  with
information  furnished to Lender by or on behalf of Borrower  in
connection  with the preparation of the memorandum or prospectus
or  in  connection with the underwriting of the debt, including,
without  limitation, financial statements of Borrower, operating
statements, rent rolls, environmental site assessment reports and
property condition reports with respect to the Properties.  This
indemnity  agreement will be in addition to any liability  which
Borrower may otherwise have.
          
          (c)  In connection with filings under the Exchange Act,
Borrower  agrees  to indemnify (i) Lender, and  the  Underwriter
Group  for Liabilities to which Lender, or the Underwriter Group
may become subject insofar as the Liabilities arise out of or are
based  upon  the omission or alleged omission to  state  in  the
Securitization Information or financial reports relating to  the
Properties  a  material  fact  required  to  be  stated  in  the
Securitization Information or financial reports relating to  the
Properties in order to make the statements in the Securitization
Information or financial reports relating to the Properties,  in
light  of  the  circumstances under which  they  were  made  not
misleading and (ii) reimburse Lender or the Underwriter Group for
any legal or other expenses reasonably incurred by Lender or the
Underwriter  Group in connection with defending or investigating
the  Liabilities;  provided,  however,  Borrower  shall  not  be
required  to  indemnify  Lender of  the  Underwriting  Group  in
connection  with any Liability arising from the gross negligence
or willful misconduct of Lender or the Underwriting Group.
          
          (d)   Promptly  after receipt by an indemnified  party
under  this  Section 14.2 of notice of the commencement  of  any
action,  such  indemnified party will, if  a  claim  in  respect
thereof is to be made against the indemnifying party under  this
Section  14.2, notify the indemnifying party in writing  of  the
commencement  thereof,  but  the  omission  to  so  notify   the
indemnifying party will not relieve the indemnifying party  from
any  liability  which the indemnifying party  may  have  to  any
indemnified party hereunder except to the extent that failure to
notify causes prejudice to the indemnifying party.  In the event
that any action is brought against any indemnified party, and it
notifies the indemnifying party of the commencement thereof, the
indemnifying  party  will be entitled, jointly  with  any  other
indemnifying  party, to participate therein and, to  the  extent
that  it (or they) may elect by written notice delivered to  the
indemnified party promptly after receiving the aforesaid  notice
from  such indemnified party, to assume the defense thereof with
counsel  satisfactory to such indemnified party.   After  notice
from the indemnifying party to such indemnified party under this
Section 14.2 the indemnifying party shall be responsible for any
reasonable  legal  or  other  reasonable  expenses  subsequently
incurred by such indemnified party in connection with the defense
thereof  other than reasonable costs of investigation; provided,
                                                       --------
however, that Borrower shall not be required to indemnify Lender
-------
or  the  Underwriting  Group in connection  with  any  Liability
arising from the gross negligence or willful misconduct of Lender
or  the  Underwriting  Group; provided,  further,  that  if  the
                              --------   -------
defendants in any such action include both the indemnified party
and  the indemnifying party and the indemnified party shall have
reasonably concluded that there are any legal defenses available
to it and/or other indemnified parties that are different from or
additional  to  those available to the indemnifying  party,  the
indemnified  party  or parties shall have the  right  to  select
separate  counsel to assert such legal defenses and to otherwise
participate  in  the defense of such action on  behalf  of  such
indemnified party to parties.  The indemnifying party shall  not
be  liable  for  the expenses of more than one separate  counsel
unless an indemnified party shall have reasonably concluded that
there  may  be legal defenses available to it that are different
from  or  additional  to those available to another  indemnified
party.
          
          (e)   In  order  to  provide for  just  and  equitable
contribution  in circumstances in which the indemnity  agreement
provided for in Section 14.2(b) or (c) is for any reason held to
be  unenforceable  by an indemnified party  in  respect  of  any
losses,  claims,  damages or liabilities (or action  in  respect
thereof)   referred   to  therein  which  would   otherwise   be
indemnifiable  under  Section 14.2(b) or (c),  the  indemnifying
party  shall  contribute to the amount paid or  payable  by  the
indemnified party as a result of such losses, claims, damages or
liabilities  (or action in respect thereof); provided,  however,
                                             --------   -------
that no person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled
to  contribution  from any person who was  not  guilty  of  such
fraudulent  misrepresentation.  In  determining  the  amount  of
contribution  to which the respective parties are entitled,  the
following   factors  shall  be  considered:  (i)  Lender's   and
Borrower's   relative  knowledge  and  access   to   information
concerning the matter with respect to which claim was  asserted;
(ii)  the  opportunity to correct and prevent any  statement  or
omission;   and   (iii)   any  other  equitable   considerations
appropriate  in  the circumstances.  Lender and Borrower  hereby
agree  that  it  would not be equitable if the  amount  of  such
contribution  were  determined  by  pro  rata  or   per   capita
allocation.
          
          (f)   The liabilities and obligations of both Borrower
and Lender under this Section 14.2 shall survive the termination
of this Agreement and the satisfaction and discharge of the Debt.
          
          SECTION 14.3  SERVICER.  At the option of Lender,  the
                        --------
Loan may be serviced by a Servicer/Trustee ("SERVICER") selected
by  Lender.   Lender  may delegate all or  any  portion  of  its
responsibilities  under  this  Agreement  and  the  other   Loan
Documents  to  the  Servicer pursuant to a  servicing  agreement
("SERVICING AGREEMENT") between Lender and Servicer.   Borrower
shall  have no obligation to pay any servicing fees to  Servicer
pursuant to the Servicing Agreement.
                                
                                
                           ARTICLE 15
                                
                          MISCELLANEOUS
                          -------------
          
          SECTION   15.1   NOTICES.   Any  notice  required   or
                           -------
permitted  to be given under this Agreement shall be in  writing
and  either shall be mailed by certified mail, postage  prepaid,
return  receipt  requested, or sent  by  overnight  air  courier
service,  or  personally delivered to a  representative  of  the
receiving  party,  or  sent by telecopy (provided  an  identical
notice is also sent simultaneously by mail, overnight courier, or
personal  delivery as otherwise provided in this Section  15.1).
All  such  communications shall be mailed,  sent  or  delivered,
addressed to the party for whom it is intended at its address set
forth below.
          
          If to Borrower:        Winston Hotels, Inc.
                         2209 Century Drive
                         Suite 300
                         Raleigh, North Carolina 27612
                         Attention:                    Joseph V.
                         Green
                         Telecopy:                     (919) 510-
                         6016
          
          With copies to:        Winston Hotels, Inc.
                         c/o Brown & Bunch
                         4900 Falls of Neuse Road
                         Raleigh, North Carolina 27609
                         Attention:                    William W.
                         Bunch, III, Esq.
                         Telecopy:                     (919) 878-
                         8062
          
          and
          
                         Hunton & Williams
                         1900 K Street, N.W.
                         Suite 1200
                         Washington, D.C. 20006-1109
                         Attention:                    Thomas F.
                         Kaufman, Esq.
                         Telecopy:                     (202) 778-
                         2210
          
          If to Lender:  General Electric Capital Corporation
                         
                         209 West Jackson, 2nd Floor
                         Chicago, Illinois  60606
                         Attention:                    Nancy G.
                         Tramulota, Operating Agent
                         Telecopy:                     (203) 316-
                         7410
          
          with a copy to:        General Electric Capital
                         Corporation
                         292 Long Ridge Road
                         Stamford, Connecticut 06927
                         Attention:     Paul Mundinger, Esq.
                         Telecopy:                     (203) 357-
                         6364

Any communication so addressed and mailed shall be deemed to  be
given on the earliest of (a) when actually delivered, (b) on the
first  Business Day after deposit with an overnight air  courier
service, or (c) on the third Business Day after deposit  in  the
United States mail, postage prepaid, in each case to the address
of the intended addressee, and any communication so delivered in
person  shall be deemed to be given when receipted  for  by,  or
actually received by Lender or Borrower, as the case may be.  If
given  by  telecopy, a notice shall be deemed given and received
when  the telecopy is transmitted to the party's telecopy number
specified above confirmation of complete receipt is received  by
the  transmitting party during normal business hours or  on  the
next Business Day if not confirmed during normal business hours.
Either party may designate a change of address by written notice
to  the  other  by giving at least ten (10) days  prior  written
notice of such change of address.
          
          SECTION 15.2  AMENDMENTS AND WAIVERS.  No amendment or
                        ----------------------
waiver of any provision of the Loan Documents shall be effective
unless  in  writing  and  signed  by  the  party  against   whom
enforcement is sought.
          
          SECTION  15.3   LIMITATION ON INTEREST.   It  is  the
                          ----------------------
intention of the parties hereto to conform strictly to applicable
usury  laws.   Accordingly, all agreements between Borrower  and
Lender with respect to the Loan are hereby expressly limited  so
that  in no event, whether by reason of acceleration of maturity
or  otherwise,  shall the amount paid or agreed to  be  paid  to
Lender or charged by Lender for the use, forbearance or detention
of  the  money  to  be lent hereunder or otherwise,  exceed  the
maximum  amount allowed by law.  If the Loan would  be  usurious
under applicable law (including the laws of the state where each
Individual Property is located and the laws of the United States
of  America), then, notwithstanding anything to the contrary  in
the Loan Documents:  (a) the aggregate of all consideration which
constitutes interest under applicable law that is contracted for,
taken,  reserved, charged or received under the  Loan  Documents
shall  under  no  circumstances exceed  the  maximum  amount  of
interest  allowed  by applicable law, and any  excess  shall  be
credited  on the Note by the holder thereof; and (b) if maturity
is  accelerated by reason of an election by Lender,  or  in  the
event of any prepayment, then any consideration which constitutes
interest may never include more than the maximum amount  allowed
by  applicable  law.   In such case, excess  interest,  if  any,
provided  for in the Loan Documents or otherwise, to the  extent
permitted  by  applicable  law, shall  be  amortized,  prorated,
allocated  and spread from the date of advance until payment  in
full so that the actual rate of interest is uniform through  the
term  hereof.   If such amortization, proration, allocation  and
spreading is not permitted under applicable law, then such excess
interest shall be canceled automatically as of the date of  such
acceleration  or prepayment and, if theretofore paid,  shall  be
credited  on  the  Note.   The  terms  and  provisions  of  this
Section 15.3 shall control and supersede every other provision of
the Loan Documents.  The Loan Documents are contracts made under
and  shall be construed in accordance with and governed  by  the
laws  of  the State of New York, except that if at any time  the
laws  of  the United States of America permit Lender to contract
for,  take, reserve, charge or receive a higher rate of interest
than  is  allowed by the laws of the State of New York  (whether
such federal laws directly so provide or refer to the law of any
state), then such federal laws shall to such extent govern as to
the  rate  of  interest  which Lender may  contract  for,  take,
reserve, charge or receive under the Loan Documents.
          
          SECTION 15.4  INVALID PROVISIONS.  If any provision of
                        ------------------
any   Loan   Document  is  held  to  be  illegal,   invalid   or
unenforceable, such provision shall be fully severable; the Loan
Documents  shall be construed and enforced as if  such  illegal,
invalid  or unenforceable provision had never comprised  a  part
thereof; the remaining provisions thereof shall remain  in  full
effect  and  shall not be affected by the illegal,  invalid,  or
unenforceable  provision or by its severance therefrom;  and  in
lieu  of such illegal, invalid or unenforceable provision  there
shall  be added automatically as a part of such Loan Document  a
provision  as  similar  in  terms to such  illegal,  invalid  or
unenforceable provision as may be possible to be legal, valid and
enforceable.
          
          SECTION  15.5   REIMBURSEMENT OF EXPENSES.   Borrower
                          -------------------------
shall pay all expenses incurred by Lender in connection with the
Loan,   including  fees  and  expenses  of  Lender's  attorneys,
environmental,  engineering  and other  consultants,  and  fees,
charges  or taxes for the recording or filing of Loan Documents.
Borrower shall pay all reasonable, third-party expenses of Lender
in  connection  with the administration of the  Loan,  including
settlement of condemnation and casualty awards, and premiums for
title insurance and endorsements thereto.  Borrower shall, within
three (3) Business Days after Lender's demand therefor, reimburse
Lender  for all amounts expended, advanced or incurred by Lender
to enforce the rights of Lender under this Agreement or any other
Loan  Document, or to defend or assert the rights and claims  of
Lender under the Loan Documents or with respect to any Individual
Property (by litigation or other proceedings), which amounts will
include  all court costs, attorneys' fees and expenses, fees  of
auditors and accountants, and investigation expenses as  may  be
reasonably incurred by Lender in connection with any such matters
(whether or not litigation is instituted), together with interest
at  the  Default  Rate  on each such amount  from  the  date  of
disbursement until the date of reimbursement to Lender,  all  of
which shall constitute part of the Loan and shall be secured  by
the  Loan Documents.  Borrower shall not be responsible for  the
monthly servicing fee payable to the Servicer.
          
          SECTION  15.6   APPROVALS; THIRD PARTIES; CONDITIONS.
                          ------------------------------------
All approval rights retained or exercised by Lender with respect
to Leases, contracts, plans, studies and other matters are solely
to  facilitate Lender's credit underwriting, and  shall  not  be
deemed or construed as a determination that Lender has passed on
the adequacy thereof for any other purpose and may not be relied
upon by Borrower or any other Person.  This Agreement is for the
sole  and  exclusive use of Lender and Borrower and may  not  be
enforced,  nor relied upon, by any Person other than Lender  and
Borrower.  All conditions of the obligations of Lender hereunder,
including the obligation to make advances, are imposed solely and
exclusively  for  the  benefit of  Lender,  its  successors  and
assigns,  and  no  other Person shall have standing  to  require
satisfaction  of such conditions or be entitled to  assume  that
Lender  will  refuse to make advances in the absence  of  strict
compliance  with  any or all of such conditions,  and  no  other
Person  shall,  under  any circumstances,  be  deemed  to  be  a
beneficiary  of  such conditions, any and all of  which  may  be
freely  waived  in whole or in part by Lender  at  any  time  in
Lender's sole discretion.
          
          SECTION  15.7   LENDER NOT IN CONTROL; NO PARTNERSHIP.
                          -------------------------------------
None  of  the  covenants or other provisions contained  in  this
Agreement shall, or shall be deemed to, give Lender the right or
power  to  exercise control over the affairs  or  management  of
Borrower,  the  power of Lender being limited to the  rights  to
exercise  the  remedies referred to in the Loan Documents.   The
relationship  between Borrower and Lender is, and at  all  times
shall remain, solely that of debtor and creditor.  No covenant or
provision  of the Loan Documents is intended, nor  shall  it  be
deemed  or  construed, to create a partnership,  joint  venture,
agency or common interest in profits or income between Lender and
Borrower  or  to create an equity in the Individual Property  in
Lender.  Lender neither undertakes nor assumes any responsibility
or  duty to Borrower or to any other person with respect to  the
Individual Property or the Loan, except as expressly provided in
the  Loan Documents; and notwithstanding any other provision  of
the  Loan  Documents:   (a) Lender is  not,  and  shall  not  be
construed  as,  a partner, joint venturer, alter  ego,  manager,
controlling person or other business associate or participant of
any  kind  of Borrower or its stockholders, members, or partners
and Lender does not intend to ever assume such status; (b) Lender
shall  in  no event be liable for any debts, expenses or  losses
incurred or sustained by Borrower; and (c) Lender shall  not  be
deemed responsible for or a participant in any acts, omissions or
decisions of Borrower or its stockholders, members, or partners.
Lender  and  Borrower  disclaim  any  intention  to  create  any
partnership, joint venture, agency or common interest in profits
or income between Lender and Borrower, or to create an equity in
the Individual Property in Lender, or any sharing of liabilities,
losses, costs or expenses.
          
          SECTION  15.8  TIME OF THE ESSENCE.  Time  is  of  the
                         -------------------
essence with respect to this Agreement and all of the other Loan
Documents.
          
          SECTION  15.9  SUCCESSORS AND ASSIGNS.  This Agreement
                         ----------------------
shall  be  binding upon and inure to the benefit of  Lender  and
Borrower  and their respective successors and assigns of  Lender
and  Borrower,  provided that, except as otherwise  specifically
provided  in  Section 10.1(b), neither Borrower  nor  any  other
Borrower  Party  shall,  without the prior  written  consent  of
Lender, assign any rights, duties or obligations hereunder.
          
          SECTION  15.10   RENEWAL, EXTENSION OR REARRANGEMENT.
                           -----------------------------------
All  provisions  of the Loan Documents shall  apply  with  equal
effect  to each and all promissory notes and amendments  thereof
hereinafter  executed  which in whole or  in  part  represent  a
renewal, extension, increase or rearrangement of the Loan.
          
          SECTION 15.11  WAIVERS.  No course of dealing  on  the
                         -------
part  of Lender, its officers, employees, consultants or agents,
nor any failure or delay by Lender with respect to exercising any
right,  power  or  privilege of Lender under  any  of  the  Loan
Documents, shall operate as a waiver thereof.
          
          SECTION  15.12  CUMULATIVE RIGHTS; JOINT AND SEVERAL
                          ------------------------------------
LIABILITY.   Rights  and  remedies  of  Lender  under  the  Loan
---------
Documents  shall  be  cumulative, and the  exercise  or  partial
exercise  of  any  such right or remedy shall not  preclude  the
exercise of any other right or remedy.  If more than one  person
or  entity  has  executed  this  Agreement  as  "Borrower,"  the
obligations of all such persons or entities hereunder  shall  be
joint and several.
          
          SECTION 15.13  SINGULAR AND PLURAL.  Words used in this
                         -------------------
Agreement and the other Loan Documents in the singular, where the
context  so  permits, shall be deemed to include the plural  and
vice  versa.  The definitions of words in the singular  in  this
Agreement and the other Loan Documents shall apply to such words
when  used in the plural where the context so permits  and  vice
versa.
          
          SECTION  15.14  PHRASES.  When used in this  Agreement
                          -------
and  the other Loan Documents, the phrase "including" shall mean
"including,  but  not limited to," the phrase  "satisfactory  to
Lender" shall mean "in form and substance satisfactory to Lender
in  all  respects," the phrase "with Lender's consent" or  "with
Lender's  approval"  shall  mean such  consent  or  approval  at
Lender's discretion, and the phrase "acceptable to Lender" shall
mean "acceptable to Lender at Lender's sole discretion."
          
          SECTION  15.15  EXHIBITS AND SCHEDULES.  The  exhibits
                          ----------------------
and schedules attached to this Agreement are incorporated herein
and shall be considered a part of this Agreement for the purposes
stated herein.
          
          SECTION  15.16  TITLES OF ARTICLES, SECTIONS AND
                          --------------------------------
SUBSECTIONS.   All  titles or headings  to  articles,  sections,
-----------
subsections or other divisions of this Agreement and  the  other
Loan  Documents or the exhibits hereto and thereto are only  for
the convenience of the parties and shall not be construed to have
any  effect or meaning with respect to the other content of such
articles,  sections, subsections or other divisions, such  other
content being controlling as to the agreement between the parties
hereto.
          
          SECTION  15.17   PROMOTIONAL MATERIAL.   Borrower  and
                           --------------------
Lender  may  issue  press  releases,  advertisements  and  other
promotional  materials  in  connection  with  their   respective
promotional  and  marketing activities, and such  materials  may
describe the Loan in general terms or in detail.  All references
to  Lender or the REIT or the Operating Partnership contained in
any  press release, advertisement or promotional material issued
by  Lender or Borrower shall be approved in writing by Lender or
Borrower  as appropriate in advance of issuance.  The provisions
of this Section 15.17 shall not, however, apply to references or
descriptions in disclosure, presentations or promotional material
by  Lender  or  any  other  Person made  in  connection  with  a
Securitization or any other sale or marketing of  the  Loan  for
which  no  consent is required by Borrower or any other  Person.
Lender shall have the right to review and approve all references
to  Lender or Lender's Securitization in Borrower's Registration
Statement  under  the  Securities  Act  and  any  of  Borrower's
documents  relating public or private offering by  the  REIT  or
Operating  Partnership, provided that any of Lender's review  or
approval of the foregoing shall be for Lender's own purposes and
Lender shall have no liability with respect thereto.
          
          SECTION  15.18   SURVIVAL.   All  of  the  indemnities
                           --------
hereunder (including environmental matters under Article 6), and
under the indemnification provisions of the other Loan Documents
shall  survive the repayment in full of the Loan and the release
of  the liens evidencing or securing the Loan, and shall survive
the  transfer  (by  sale, foreclosure,  conveyance  in  lieu  of
foreclosure or otherwise) of any or all right, title and interest
in and to any Individual Property to any party, whether or not an
Affiliate of Borrower.
          
          SECTION  15.19   WAIVER OF JURY TRIAL.   BORROWER  AND
                           --------------------
LENDER  HEREBY AGREE NOT TO ELECT A TRIAL BY JURY OF  ANY  ISSUE
TRIABLE  OF RIGHT BY JURY, AND WAIVE ANY RIGHT TO TRIAL BY  JURY
FULLY  TO  THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER
EXIST   WITH  REGARD  TO  THE  LOAN  DOCUMENTS,  OR  ANY  CLAIM,
COUNTERCLAIM  OR  OTHER ACTION ARISING IN CONNECTION  THEREWITH.
THIS  WAIVER  OF RIGHT TO TRIAL BY JURY IS GIVEN  KNOWINGLY  AND
VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS
INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE  RIGHT
TO  A  TRIAL  BY  JURY  WOULD OTHERWISE ACCRUE.   LENDER  AND/OR
BORROWER  ARE HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH
IN  ANY  PROCEEDING  AS CONCLUSIVE EVIDENCE OF  THIS  WAIVER  BY
BORROWER.
          
          SECTION  15.20  WAIVER OF PUNITIVE OR CONSEQUENTIAL
                          -----------------------------------
DAMAGES.   Neither Lender nor Borrower shall be  responsible  or
-------
liable  to  the  other or to any other Person for any  punitive,
exemplary  or  consequential damages which may be alleged  as  a
result  of  the  Loan  or the transaction  contemplated  hereby,
including any breach or other default by any party hereto.
          
          SECTION 15.21  GOVERNING LAW.
                         -------------
          
          (A)   THE  LOAN  WAS MADE BY LENDER  AND  ACCEPTED  BY
BORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE  NOTE
DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE  OF  NEW
YORK,   WHICH   STATE  THE  PARTIES  AGREE  HAS  A   SUBSTANTIAL
RELATIONSHIP  TO  THE PARTIES AND TO THE UNDERLYING  TRANSACTION
EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING
THE  GENERALITY  OF  THE  FOREGOING,  MATTERS  OF  CONSTRUCTION,
VALIDITY  AND  PERFORMANCE, THIS AGREEMENT AND  THE  OBLIGATIONS
ARISING  HEREUNDER  SHALL  BE  GOVERNED  BY,  AND  CONSTRUED  IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS  MADE AND PERFORMED IN SUCH STATE (WITHOUT  REGARD  TO
PRINCIPLES  OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW  OF  THE
UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS
FOR  THE CREATION, PERFECTION, AND ENFORCEMENT OF THE LIENS  AND
SECURITY INTERESTS CREATED PURSUANT HERETO AND PURSUANT  TO  THE
OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED ACCORDING
TO  THE  LAW  OF  THE  STATE IN WHICH THE APPLICABLE  INDIVIDUAL
PROPERTY  IS  LOCATED, IT BEING UNDERSTOOD THAT, TO THE  FULLEST
EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE  STATE
OF   NEW  YORK  SHALL  GOVERN  THE  CONSTRUCTION,  VALIDITY  AND
ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE  OBLIGATIONS
ARISING HEREUNDER OR THEREUNDER.  TO THE FULLEST EXTENT PERMITTED
BY  LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY  WAIVES
ANY  CLAIM  TO  ASSERT  THAT THE LAW OF ANY  OTHER  JURISDICTION
GOVERNS THIS AGREEMENT AND THE NOTE, AND THIS AGREEMENT AND  THE
NOTE  SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH  THE
LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF  THE
NEW YORK GENERAL OBLIGATIONS LAW.
          
          (B)   ANY  LEGAL  SUIT, ACTION OR  PROCEEDING  AGAINST
LENDER  OR BORROWER ARISING OUT OF OR RELATING TO THIS AGREEMENT
MAY  AT  LENDER'S OPTION BE INSTITUTED IN ANY FEDERAL  OR  STATE
COURT  IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT  TO
SECTION  5-1401  OF  THE NEW YORK GENERAL  OBLIGATIONS  LAW  AND
BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE
BASED  ON  VENUE AND/OR FORUM NON CONVENIENS OF ANY  SUCH  SUIT,
ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO
THE  JURISDICTION  OF  ANY SUCH COURT IN  ANY  SUIT,  ACTION  OR
PROCEEDING.  BORROWER DOES HEREBY DESIGNATE AND APPOINT
               
               CORPORATION SERVICE COMPANY
               80 STATE STREET
               ALBANY, NEW YORK 12207-2543


AS  ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF
SERVICE  OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY  SUCH
SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN  NEW
YORK,  NEW  YORK, AND AGREES THAT SERVICE OF PROCESS  UPON  SAID
AGENT  AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED
OR  DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE
DEEMED  IN  EVERY  RESPECT  EFFECTIVE SERVICE  OF  PROCESS  UPON
BORROWER, IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF
NEW YORK.  BORROWER (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY
CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II)  MAY  AT
ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED
AGENT  WITH  AN  OFFICE IN NEW YORK, NEW YORK (WHICH  SUBSTITUTE
AGENT  AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND  ADDRESS
FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH
A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN
NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.
          
          SECTION  15.22  ENTIRE AGREEMENT.  This Agreement  and
                          ----------------
the  other  Loan  Documents  embody  the  entire  agreement  and
understanding between Lender and Borrower and supersede all prior
agreements  and understandings between such parties relating  to
the  subject matter hereof and thereof.  Accordingly,  the  Loan
Documents  may  not  be  contradicted  by  evidence  of   prior,
contemporaneous, or subsequent oral agreements of  the  parties.
There are no unwritten oral agreements between the parties.
          
          SECTION  15.23  COUNTERPARTS.  This Agreement  may  be
                          ------------
executed in multiple counterparts, each of which shall constitute
an original, but all of which shall constitute one document.
          
          SECTION  15.24  BROKERS AND FINANCIAL ADVISORS.
                          ------------------------------
Borrower  hereby represents that it has dealt with no  financial
advisors,  brokers, underwriters, placement  agents,  agents  or
finders in connection with the transactions contemplated by this
Agreement.  Borrower hereby agrees to indemnify, defend and hold
Lender harmless from and against any and all claims, liabilities,
costs  and  expenses of any kind (including Lender's  attorneys'
fees and expenses) in any way relating to or arising from a claim
by any Person (including Broker) that such Person acted on behalf
of  Borrower  or  Lender  in connection  with  the  transactions
contemplated herein.  The provisions of this Section 15.24 shall
survive the expiration and termination of this Agreement and the
payment of the Debt.
          
          SECTION 15.25  CONFLICTS.  In the event of any conflict
                         ---------
between  the provisions of this Agreement and any of  the  other
Loan Documents, the provisions of this Agreement shall control.
          
          SECTION 15.26  LENDER ESTOPPELS.  Upon written request
                         ----------------
of Borrower, not more frequently than twice in any calendar year,
Lender shall provide Borrower with a written statement certifying
(i) whether any monetary defaults currently exist under the Loan,
(ii)  the  date  of  the last monthly payment of  principal  and
interest  under  the  Loan and (iii) the  outstanding  principal
amount of the Loan as of the date of such certification.
          
          
               
               
          
          EXECUTED under seal as of the date first written above.


LENDER:                       CMF CAPITAL COMPANY, LLC,
                              a Delaware limited liability company
                              
                              
                              By:
                                 ---------------------------
                                 Name:
                                 Title:
                                 
                                 
BORROWER:                WINSTON SPE LLC, a Virginia limited
                              liability company

                              By:  Winston Manager Corporation,
                                     a Virginia corporation,
                                      its managing member

                              By: /s/ Joseph V. Green
                                 ----------------------------
                                       Joseph V. Green
                                       Vice President


                             JOINDER
                             -------
                                
          
          By   executing  this  Joinder  (the  "JOINDER"),   the
undersigned  ("JOINDER PARTIES") jointly and severally  guaranty
the  performance by Borrower of all obligations and  liabilities
for  which Borrower is personally liable under Section  13.1  of
this Agreement.  Subject to the preceding sentence, this Joinder
is  a guaranty of full and complete payment and performance  and
not of collectability.
          
          1.    WAIVERS.   To  the fullest extent  permitted  by
                -------
applicable law, each Joinder Party waives all rights and defenses
of  sureties, guarantors, accommodation parties and/or co-makers
and  agrees  that  its obligations under this Joinder  shall  be
primary,  absolute and unconditional, and that  its  obligations
under this Joinder shall be unaffected by any of such rights  or
defenses, including:
          
          (a)  the unenforceability of any Loan Document against
Borrower and/or any guarantor or other Joinder Party;
          
          (b)  any release or other action or inaction taken  by
Lender  with respect to the collateral, the Loan, Borrower,  any
guarantor and/or other Joinder Party, whether or not the same may
impair or destroy any subrogation rights of any Joinder Party, or
constitute  a  legal or equitable discharge  of  any  surety  or
indemnitor;
          
          (c)  the existence of any collateral or other security
for the Loan, and any requirement that Lender pursue any of such
collateral or other security, or pursue any remedies it may have
against Borrower, any guarantor and/or any other Joinder Party;
          
          (d)  any requirement that Lender provide notice to  or
obtain  a Joinder Party's consent to any modification, increase,
extension  or  other  amendment  of  the  Loan,  including   the
guaranteed obligations;
          
          (e)  any right of subrogation (until payment in full of
the   Loan,  including  the  guaranteed  obligations,  and   the
expiration  of any applicable preference period and  statute  of
limitations for fraudulent conveyance claims);
          
          (f)  Intentionally Omitted;
          
          (g)  any payment by Borrower to Lender if such payment
is  held  to  be  a  preference or fraudulent  conveyance  under
bankruptcy  laws or Lender is otherwise required to refund  such
payment to Borrower or any other party; and
          
          (h)    any   voluntary   or  involuntary   bankruptcy,
receivership,  insolvency, reorganization or similar  proceeding
affecting Borrower or any of its assets.
          
          2.     AGREEMENTS.    Each   Joinder   Party   further
                 ----------
represents, warrants and agrees that:
          
          (a)  The obligations under this Joinder are enforceable
against  each  such party and are not subject to  any  defenses,
offsets or counterclaims;
          
          (b)  The provisions of this Joinder are for the benefit
of Lender and its successors and assigns;
          
          (c)  Lender shall have the right to (i) renew, modify,
extend  or accelerate the Loan, (ii) pursue some or all  of  its
remedies  against Borrower, any guarantor or any Joinder  Party,
(iii) add, release or substitute any collateral for the Loan  or
party  obligated  thereunder, and  (iv)  release  Borrower,  any
guarantor or any Joinder Party from liability, all without notice
to  or consent of any Joinder Party (or other Joinder Party) and
without affecting the obligations of any Joinder Party (or other
Joinder Party) hereunder;
          
          (d)  Each Joinder Party covenants and agrees to furnish
to Lender, within ninety (90) days after the end of each calendar
year of such Joinder Party, the financial statements and reports
required  to  be  furnished for such party pursuant  to  Section
9.1(d) of this Agreement; and
          
          (e)   To  the  maximum extent permitted by  law,  each
Joinder  Party  hereby knowingly, voluntarily and  intentionally
waives the right to a trial by jury in respect of any litigation
based hereon.  This waiver is a material inducement to Lender to
enter into this Agreement.
          
          This Joinder shall be governed by the laws of the State
of New York.
          
          Executed under seal as of  November__, 1998.
                                   
                                   WINSTON HOTELS, INC.,
                                   a North Carolina corporation
                                   
                                   
                                   
                                   By:
                                      --------------------------
                                      Name:
                                      Title:
                                   
                                   
                                   
                                   WINN LIMITED PARTNERSHIP,
                                   a North Carolina limited
                                   partnership
                                   
                                   By:Winston Hotels, Inc.,
                                      a North Carolina
                                      corporation,
                                      its sole general partner
                                      
                                      
                                   By:
                                      --------------------------
                                      Name:
                                      Title:


                           SCHEDULE I
                           ----------
                                
                         RELEASE AMOUNTS
                                
                                                        
PROPERTY            LOCATION                     RELEASE AMOUNT
--------            --------                     --------------
                                                        
COMFORT SUITES      ORLANDO, FLORIDA              $  5,175,000

COMFORT INN         CHARLESTON, SOUTH CAROLINA       1,575,000

COURTYARD BY
  MARRIOTT          ANN ARBOR, MICHIGAN              6,300,000

COURTYARD BY
  MARRIOTT          WILMINGTON, NORTH CAROLINA       4,275,000

HAMPTON INN         ELMSFORD, NEW YORK               7,625,000

HAMPTON INN         RALEIGH, NORTH CAROLINA          5,300,000

HAMPTON INN         PERMITER, GEORGIA                5,000,000

HAMPTON INN         WEST SPRINGFIELD,                3,700,000
                    MASSACHUSETTS

HAMPTON INN         CHARLOTTE, NORTH CAROLINA        4,575,000

HAMPTON INN &
SUITES              DULUTH, GEORGIA (GWINETTE)       5,400,000

HOMEWOOD SUITES     CARY, NORTH CAROLOINA            6,025,000

HOMEWOOD SUITES     CLEARLAKE, TEXAS                 3,450,000

QUALITY SUITES      NORTH CHARLESTON, SOUTH          6,300,000
                    CAROLINA

RESIDENCE INN       PHOENIX, ARIZONA                 6,300,000

TOTALS/AVERAGES                                   $ 71,000,000



                           SCHEDULE II
                           -----------
                                
                        REQUIRED REPAIRS
                                

Hampton Inn                Building Area:      61,950 Square Feet
Charlotte, North Carolina  Property Type:      Limited Service Hotel
August 13, 1998            Total Guestrooms:   125
                           Property Age:       7 Years

                                                      


Physical Condition Summary         Action          Immed. Cost
=================================================================
Substructure & Superstructure
-----------------------------------------------------------------
Exterior Walls                Moisture Analysis           $ 2,800
-----------------------------------------------------------------
Mechanical, Electrical & Plumbing Systems
                                                                 
-----------------------------------------------------------------
Fire Protection and Life Safety Systems
                                                                 
-----------------------------------------------------------------
Other Conditions
-----------------------------------------------------------------
ADA Compliance                Upgrades                    $ 4,700
-----------------------------------------------------------------
                                          TOTAL           $ 7,500
=================================================================


Holdback Summary Today's  $/Room  $/Room/  w/Escalat   Escalated
                 Dollars            Year      ion      $/Room/Year
=================================================================
Immediate
Repairs Cost
Estimate        $ 7,500   $ 60     N/A       N/A         N/A

                                                            


Comfort Inn                Building Area:      59,645 Square Feet
Charleston, South          Property Type:      Hi-Rise Hotel
 Carolina                  Total Guestrooms:   128
July 31, 1998              Property Age:       11 Years
                           


Physical Condition Summary         Action          Immed. Cost
=================================================================
Substructure & Superstructure
-----------------------------------------------------------------
Roofing                       Replace and                 $ 2,500
                              Repair
-----------------------------------------------------------------
Garage/Maintenance Building   Replace door &             $    750
                              frame
-----------------------------------------------------------------
Mechanical, Electrical & Plumbing Systems
                                                                 
-----------------------------------------------------------------
Fire Protection and Life Safety Systems
                                                                 
-----------------------------------------------------------------
Other Conditions
ADA Compliance                Parking & showers           $ 7,300
Year 2000 Building Readiness  Additional Studies          $ 4,500
-----------------------------------------------------------------
                                          TOTAL           $15,050
=================================================================


Holdback Summary Today's  $/Room  $/Room/  w/Escalat   Escalated
                 Dollars            Year      ion      $/Room/Year
=================================================================
Immediate
Repairs Cost
Estimate         $15,050   $118     N/A       N/A         N/A

                                                            



Quality Suites             Building Area:      108,000 Square Feet
North Charleston, South    Property Type:      Hi-Rise Hotel
 Carolina                  Total Guestrooms:   168
August 18, 1998            Property Age:       10 Years
                           
                           


Physical Condition Summary         Action          Immed. Cost
=================================================================
Substructure & Superstructure
                                                                 
-----------------------------------------------------------------
Mechanical, Electrical & Plumbing Systems
Tenant HVAC                                               $10,000
-----------------------------------------------------------------
Fire Protection and Life Safety Systems
                                                                 
-----------------------------------------------------------------
Other Conditions
ADA Compliance                See Report III, G.2         $ 3,540
-----------------------------------------------------------------
                                          TOTAL           $13,540
=================================================================


Holdback Summary Today's  $/Room  $/Room/  w/Escalat   Escalated
                 Dollars            Year      ion      $/Room/Year
=================================================================
Immediate
Repairs Cost
Estimate         $13,540   $ 81     N/A       N/A         N/A

                                                            



Hampton Inn                Building Area:      72,717 Square Feet
Raleigh, North Carolina    Property Type:      Limited Service Hotel
August 7, 1998             Total Guestrooms:   141
                           Property Age:       12 Years
                           
                           


Physical Condition Summary         Action          Immed. Cost
=================================================================
Substructure & Superstructure
Exterior Walls                Patch, repair               $ 2,800
-----------------------------------------------------------------
Mechanical, Electrical & Plumbing Systems
                                                                 
-----------------------------------------------------------------
Fire Protection and Life Safety Systems
                                                                 
-----------------------------------------------------------------
Other Conditions
ADA Compliance                Compliance                  $10,600
-----------------------------------------------------------------
                                          TOTAL           $13,400
=================================================================


Holdback Summary Today's  $/Room  $/Room/  w/Escalat   Escalated
                 Dollars            Year      ion      $/Room/Year
=================================================================
Immediate
Repairs Cost
Estimate         $13,400   $ 95     N/A       N/A         N/A

                                                            



Hampton Inn                Building Area:      48,000 Square Feet
West Springfield,          Property Type:      Convention Hotel
 Massachusetts             Total Guestrooms:   124
August 3, 1998             Property Age:       9 Years
                           


Physical Condition Summary         Action          Immed. Cost
=================================================================
Substructure & Superstructure
Roofing                                                   $ 2,500
Exterior Walls                                            $ 1,000
-----------------------------------------------------------------
Mechanical, Electrical & Plumbing Systems
Building Plumbing and         Water filtration            $ 5,000
Domestic Hot                  system
Water
-----------------------------------------------------------------
Fire Protection and Life Safety Systems
                                                                 
-----------------------------------------------------------------
Other Conditions
ADA Compliance                                            $ 5,150
-----------------------------------------------------------------
                                          TOTAL           $13,650
=================================================================


Holdback Summary Today's  $/Room  $/Room/  w/Escalat   Escalated
                 Dollars            Year      ion      $/Room/Year
=================================================================
Immediate
Repairs Cost
Estimate         $13,650   $110     N/A       N/A         N/A

                                                            



Courtyard by Marriott      Building Area:      71,518 Square Feet
Wilmington, North          Property Type:      Limited Service Hotel
  Carolina                 Total Guestrooms:        128
August 5, 1998             Property Age:       2 Years
                           
                           


Physical Condition Summary         Action          Immed. Cost
=================================================================
Substructure & Superstructure
                                                                 
-----------------------------------------------------------------
Mechanical, Electrical & Plumbing Systems
                                                                 
-----------------------------------------------------------------
Fire Protection and Life Safety Systems
                                                                 
-----------------------------------------------------------------
Other Conditions
ADA Compliance                Van parking sign          $      25
-----------------------------------------------------------------
                                          TOTAL         $      25
=================================================================


Holdback Summary Today's  $/Room  $/Room/  w/Escalat   Escalated
                 Dollars            Year      ion      $/Room/Year
=================================================================
Immediate
Repairs Cost
Estimate          $ 25      $ 0     N/A       N/A         N/A

                                                            



Comfort Suites             Building Area:      85,450 Square Feet
Orlando, Florida           Property Type:      Limited Service Hotel
August 4, 1998             Total Guestrooms:   214
                           Property Age:       8 Years
                           
                           


Physical Condition Summary         Action          Immed. Cost
=================================================================
Substructure & Superstructure
Exterior Walls                Repair                      $ 2,800
Exterior and Interior Stairs  Repair                      $ 8,800
-----------------------------------------------------------------
Mechanical, Electrical & Plumbing Systems
                                                                 
-----------------------------------------------------------------
Fire Protection and Life Safety Systems
                                                                 
-----------------------------------------------------------------
Other Conditions
ADA Compliance                Compliance                  $ 5,270
-----------------------------------------------------------------
                                          TOTAL           $16,870
=================================================================


Holdback Summary Today's  $/Room  $/Room/  w/Escalat   Escalated
                 Dollars            Year      ion      $/Room/Year
=================================================================
Immediate
Repairs Cost
Estimate         $16,870   $ 79     N/A       N/A         N/A

                                                            



Homewood Suites            Building Area:      117,899 Square Feet
Cary, North Carolina       Property Type:      Convention Hotel
August 5, 1998             Total Guestrooms:   120
                           Property Age:       4 Years
                                                      


Physical Condition Summary         Action          Immed. Cost
=================================================================
Substructure & Superstructure
                                                                 
-----------------------------------------------------------------
Mechanical, Electrical & Plumbing Systems
                                                                 
-----------------------------------------------------------------
Fire Protection and Life Safety Systems
                                                                 
-----------------------------------------------------------------
Other Conditions
ADA Compliance                                              $ 700
-----------------------------------------------------------------
                                          TOTAL             $ 700
=================================================================


Holdback Summary Today's  $/Room  $/Room/  w/Escalat   Escalated
                 Dollars            Year      ion      $/Room/Year
=================================================================
Immediate
Repairs Cost
Estimate          $ 700     $ 6     N/A       N/A         N/A

                                                            


Residence Inn              Building Area:      100,800 Square Feet
Phoenix, Arizona           Property Type:      Limited Service Hotel
August 12, 1998            Total Guestrooms:        168
                           Property Age:       10 Years
                           


Physical Condition Summary         Action          Immed. Cost
=================================================================
Substructure & Superstructure
                                                                 
-----------------------------------------------------------------
Mechanical, Electrical & Plumbing Systems
                                                                 
-----------------------------------------------------------------
Fire Protection and Life Safety Systems
Building & Tenant Systems     Repair sprinkler            $32,000
                              heads
-----------------------------------------------------------------
Other Conditions
ADA Compliance                See text                    $ 8,920
-----------------------------------------------------------------
                                          TOTAL           $40,920
=================================================================


Holdback Summary Today's  $/Room  $/Room/  w/Escalat   Escalated
                 Dollars            Year      ion      $/Room/Year
=================================================================
Immediate
Repairs Cost
Estimate         $40,920   $244     N/A       N/A         N/A

                                                            

Courtyard by Marriott      
Ann Arbor, Michigan        
                           
                           


Physical Condition Summary         Action          Immed. Cost
=================================================================
Substructure & Superstructure
                                                                 
-----------------------------------------------------------------
Mechanical, Electrical & Plumbing Systems
                                                                 
-----------------------------------------------------------------
Fire Protection and Life Safety Systems
                                                                 
-----------------------------------------------------------------
Other Conditions
ADA Compliance                See text                      $ 600
-----------------------------------------------------------------
                                          TOTAL             $ 600
=================================================================


                          SCHEDULE III
                          ------------
                                
                      INTENTIONALLY OMITTED
                                


                           SCHEDULE IV
                           -----------
                                
                      FRANCHISE AGREEMENTS
                                

1.   Franchise Agreement between Marriott International, Inc. and
  Hotel II Inc., dated November 9, 1996 for Courtyard Marriott -
  Wilmington, North Carolina as subsequently assinged to Capstar
  Winston Company, L.L.C. on November 17, 1997.

2.   License Agreement between Promus Hotels, L.L.C. and Capstar
  Winston Company, L.L.C., dated November 17, 1997 for Hampton Inn
  - Raleigh, North Carolina.

3.   License Agreement between Promus Hotels, L.L.C. and Capstar
  Winston Company, L.L.C., dated November 24, 1997 for Hampton Inn
  - Charlotte, North Carolina.

4.   License Agreement between Promus Hotels, L.L.C. and Capstar
  Winston Company, L.L.C., dated November 17, 1997 for Homewood
  Suites - Cary, North Carolina.

5.   License Agreement between Promus Hotels, L.L.C. and Capstar
  Winston Company, L.L.C., dated November 17, 1997 for Homewood
  Suites - Clearlake, Texas.

6.   Franchise Agreement between Marriott International, Inc. and
  Capstar Winston Company, L.L.C., dated March 6, 1998 for
  Residence Inn - Phoenix, Arizona.

7.   Franchise Agreement between Choice Hotels International,
  Inc. and Captstar Winston Company, L.L.C., dated November 26,
  1997 for Comfort Suites - Orlando, Florida.

8.   Franchise Agreement between Choice Hotels International,
  Inc. and Captstar Winston Company, L.L.C., dated November 17,
  1997 for Comfort Inn - Charleston, South Carolina.

9.   Franchise Agreement between Choice Hotels International,
  Inc. and Captstar Winston Company, L.L.C., dated November 17,
  1997 for Quality Suites - Charleston, South Carolina.

10.  Franchise Agreement between Marriott International, Inc. and
  White Lodging Services Corporation, dated January 10, 1992 for
  Courtyard Marriott - Ann Arbor, Michigan as subsequently assinged
  to Capstar Winston Company, L.L.C. on November 17, 1997.

11.  License Agreement between Promus Hotels, L.L.C. and Capstar
  Winston Company, L.L.C., dated November 17, 1997 for Hampton Inn
  - White Plains, New York.

12.  License Agreement between Promus Hotels, L.L.C. and Capstar
  Winston Company, L.L.C., dated November 17, 1997 for Hampton Inn
  - Springfield, Massachussetts.

13.  License Agreement between Promus Hotels, L.L.C. and Capstar
  Winston Company, L.L.C., dated November 17, 1997 for Hampton Inn
  - Perimiter, Georgia.

14.  License Agreement between Promus Hotels, L.L.C. and Capstar
  Winston Company, L.L.C., dated November 17, 1997 for Hampton Inn
  - Gwinnett, Georgia.


                           SCHEDULE V
                           ----------
                                
                        OPERATING LEASES
                                
                                
1.   Lease Agreement between WINN Limited Partnership, as Lessor,
  and Winston Hospitality, Inc., as Lessee, for the Comfort Suites,
  Orlando,  Florida,  dated  May 1, 1997,  as  amended  by  First
  Amendment dated November 17, 1997, as subsequently assigned  to
  Winston SPE LLC, as Lessor, and CapStar Winston Company, L.L.C.
  as Lessee.
  
2.   Lease Agreement between WINN Limited Partnership, as Lessor,
  and  Winston  Hospitality, Inc., as Lessee,  for  the  Homewood
  Suites, Cary, North Carolina, dated July 9, 1996, as amended by
  First Amendment dated November 17, 1997, as subsequently assigned
  to  Winston  SPE  LLC, as Lessor, and CapStar Winston  Company,
  L.L.C. as Lessee.
  
3.   Lease Agreement between WINN Limited Partnership, as Lessor,
  and  Winston  Hospitality, Inc., as Lessee,  for  the  Homewood
  Suites, ClearLake, Texas, dated September 13, 1996, as amended by
  First Amendment dated November 17, 1997, as subsequently assigned
  to  Winston  SPE  LLC, as Lessor, and CapStar Winston  Company,
  L.L.C. as Lessee.
  
4.   Lease Agreement between WINN Limited Partnership, as Lessor,
  and Winston Hospitality, Inc., as Lessee, for the Courtyard  by
  Marriott, Wilmington, North Carolina, dated December 19, 1996, as
  amended  by  First  Amendment  dated  November  17,  1997,   as
  subsequently assigned to Winston SPE LLC, as Lessor, and CapStar
  Winston Company, L.L.C. as Lessee.
  
5.   Lease Agreement between WINN Limited Partnership, as Lessor,
  and Winston Hospitality, Inc., as Lessee, for the Courtyard  by
  Marriott,  Ann Arbor, Michigan, dated  September 30,  1997,  as
  amended  by  First  Amendment  dated  November  17,  1997,   as
  subsequently assigned to Winston SPE LLC, as Lessor, and CapStar
  Winston Company, L.L.C. as Lessee.
  
6.   Lease Agreement between WINN Limited Partnership, as Lessor,
  and Winston Hospitality, Inc., as Lessee, for the Quality Suites
  in Charleston, South Carolina, dated May 15, 1995, as amended by
  First Amendment dated November 17, 1997, as subsequently assigned
  to  Winston  SPE  LLC, as Lessor, and CapStar Winston  Company,
  L.L.C. as Lessee.
  
7.   Lease Agreement between WINN Limited Partnership, as Lessor,
and Winston Hospitality, Inc., as Lessee, for the Hampton Inn,
White Plains, New York, dated October 29, 1997, as amended by
First Amendment dated November 17, 1997, as subsequently assigned
to Winston SPE LLC, as Lessor, and CapStar Winston Company,
L.L.C. as Lessee.
8.   Lease Agreement between WINN Limited Partnership, as Lessor,
and Winston Hospitality, Inc., as Lessee, for the Hampton Inn,
Raleigh, North Carolina, dated May 15, 1994, as amended by First
Amendment dated November 17, 1997, as subsequently assigned to
Winston SPE LLC, as Lessor, and CapStar Winston Company, L.L.C.
as Lessee.
9.   Lease Agreement between WINN Limited Partnership, as Lessor,
and Winston Hospitality, Inc., as Lessee, for the Hampton Inn,
Perimeter, Georgia, dated July 19, 1996, as amended by First
Amendment dated November 17, 1997, as subsequently assigned to
Winston SPE LLC, as Lessor, and CapStar Winston Company, L.L.C.
as Lessee.
10.  Lease Agreement between WINN Limited Partnership, as Lessor,
and Winston Hospitality, Inc., as Lessee, for the Hampton Inn,
West Springfield, Massachusetts, dated July 14, 1997, as amended
by First Amendment dated November 17, 1997, as subsequently
assigned to Winston SPE LLC, as Lessor, and CapStar Winston
Company, L.L.C. as Lessee.
11.  Lease Agreement between WINN Limited Partnership, as Lessor,
and Winston Hospitality, Inc., as Lessee, for the Hampton Inn and
Suites, Gwinnett, Georgia, dated July 18, 1996, as amended by
First Amendment dated November 17, 1997, as subsequently assigned
to Winston SPE LLC, as Lessor, and CapStar Winston Company,
L.L.C. as Lessee.
12.  Lease Agreement between WINN Limited Partnership, as Lessor,
and Winston Hospitality, Inc., as Lessee, for the Comfort Inn,
Charleston, South Carolina, dated May 15, 1995, as amended by
First Amendment dated November 17, 1997, as subsequently assigned
to Winston SPE LLC, as Lessor, and CapStar Winston Company,
L.L.C. as Lessee.
13.  Lease Agreement between WINN Limited Partnership, as Lessor,
and Winston Hospitality, Inc., as Lessee, for the Hampton Inn,
Charlotte, North Carolina, dated June 2, 1994, as amended by
First Amendment dated November 24, 1997, as subsequently assigned
to Winston SPE LLC, as Lessor, and CapStar Winston Company,
L.L.C. as Lessee.
14.  Lease Agreement between WINN Limited Partnership, as Lessor,
and Capstar Winston Company, L.L.C. for the Residence Inn,
Phoenix, Arizona, dated March 3, 1998.


                           SCHEDULE VI
                           -----------
                                
                FORM OF NONDISTURBANCE AGREEMENT
                          SCHEDULE VII
                                
            TENANT ESTOPPEL CERTIFICATE AND AGREEMENT


PREMISES (include street address, suite number, and square
footage):
          
------------------------------------------------("PREMISES")

LANDLORD:
         ---------------------------------------("LANDLORD")

LEASE DATED:
            --------------------------------------- ("LEASE")

TENANT (include actual name and any assumed name):

----------------------------------------------------("TENANT")

TENANT'S NOTICE ADDRESS:

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

DATE:
     ---------------------------------------------------------          

          For  and in consideration of the sum of Ten Dollars and
other  good and valuable consideration, the undersigned,  Tenant,
hereby  certifies to and agrees with CMF CAPITAL COMPANY, LLC,  a
Delaware limited liability company that:
          
          1.   Tenant has accepted possession of the Premises pursuant to
               the Lease.  The Lease term commenced on
                                                       ------------------.
               The Lease terminates on                    and the Tenant has
                                       ----------------- 
               the following renewal/extension option(s)
                                                         -----------------.
               The base year for operating expenses and real estate taxes,
               as defined in the Lease, is 
                                           -------------------------------.
               Monthly rent under the Lease is as follows (state basic rent and
               indicate how additional rent, if any, is calculated):

               ----------------------------------------------------------- 
          2.   All work to be performed for Tenant under the Lease has been
               performed as required and has been accepted by the Tenant; and
               any payments, free rent, or other payments, credits, allowances
               or abatements required to be given by Landlord to the Tenant have
               already been received by Tenant, except

               ----------------------------------------------------------------.
          
          3.   The Lease has not been assigned, modified, supplemented or
               amended in any way except as set forth on Schedule A attached
               hereto.  The Lease constitutes the entire agreement between the
               parties and there are no other agreements between Landlord and
               Tenant concerning the Premises.
          
          4.   The Lease is valid and in full force and effect, and, to the
               best of Tenant's knowledge, neither Landlord nor Tenant is in
               default thereunder.  Tenant has no defense, setoff or
               counterclaim against Landlord arising out of the Lease or in any
               way relating thereto, or arising out of any other transaction
               between Tenant and Landlord, and no event has occurred and no
               condition exists, which with the giving of notice or the passage
               of time, or both, will constitute a default under the Lease.
          
          5.   No rent or other sum payable under the Lease has been paid
               more than one month in advance.
          
          6.   The minimum monthly rent presently payable under the Lease
               is            
                  ----------------.
          
          7.   Tenant acknowledges that Tenant has received notice that the
               Lease will be assigned to CMF Capital Company, LLC, and Tenant
               has received no notice of a prior assignment, hypothecation or
               pledge of the Lease or the rents, income, deposits or profits
               arising thereunder.  Tenant understands that under the provisions
               of the assignment, the Lease cannot be terminated (either
               directly or by the exercise of any option which could lead to
               termination) or modified in any of its terms, or consent be given
               to the release of any party having liability thereon, without the
               prior written consent of CMF Capital Company, LLC, that without
               such consent, no rent may be collected or accepted more than one
               month in advance and that the interest of the Landlord in the
               Lease has been assigned to CMF Capital Company, LLC solely as
               security for the purposes specified in the assignment and CMF
               Capital Company, LLC assumes no duty, liability or obligations
               whatever under the Lease or any extension or renewal thereof.
          
          8.   Tenant hereby acknowledges and agrees that if CMF Capital
               Company, LLC shall succeed to the interest of Landlord under the
               Lease, CMF Capital Company, LLC shall assume (only while owner of
               and in possession or control of the building or which the
               Premises are a part) and perform all of Landlord's obligations
               under the Lease, but shall not be liable for any act or omission
               of any prior landlord (including the present landlord), liable
               for the return of any advance rental deposit, subject to any
               offset or defense which Tenant may have against any such prior
               landlord or bound by any rent or additional rent Tenant may have
               paid for more than the current month to any such prior landlord
               or bound by any assignment, surrender, termination, cancellation,
               waiver, release, amendment or modification of the Lease made
               without its express written consent.
          
          9.   Tenant shall give CMF Capital Company, LLC prompt written
               notice of any default of Landlord under the Lease, if such
               default entitles Tenant, under law or otherwise, to terminate the
               Lease, reduce rent or credit or offset any amount against future
               rents and shall give CMF Capital Company, LLC reasonable time
               (but in no event less than 60 days after receipt of such notice)
               to cure or commence curing such default prior to exercising (and
               as a condition precedent to its right to exercise) any right
               Tenant may have to terminate the Lease or to reduce rent or
               credit or offset any amounts against the rent; provided, however,
               that if such default cannot by its nature be cured within thirty
               (30) days, then Lessee shall not terminate the Lease or exercise
               any such right or remedy, provided the curing of such default is
               commenced within such thirty (30) days and is diligently
               prosecuted thereafter.  Tenant shall give written notice to any
               successor in interest of CMF Capital Company, LLC, any purchaser
               at a foreclosure sale under the mortgage, any transferee who
               acquired the property by deed in lieu of foreclosure or any
               successor or assign thereof.
          
          10.  The Tenant's security deposit is $
                                                 -----------------------------.
               Tenant shall not look to CMF Capital Company, LLC, as mortgagee,
               mortgagee in possession, or successor in title to the Mortgaged
               Property, in connection with the return of or accountability with
               respect to any security deposit required by Landlord, unless said
               sums have actually been received by CMF Capital Company, LLC as
               security for Tenant's performance under the Lease.

          11.  If the interests of Landlord in and to the Premises are
               owned by CMF Capital Company, LLC by reason of any deed-in-lieu
               of foreclosure, judicial foreclosure, sale pursuant to any power
               of sale or other proceedings brought by it or by any other
               manner, including, but not limited to, CMF Capital Company, LLC's
               exercise of its rights under any assignment of leases and rents,
               and CMF Capital Company, LLC succeeds to the interest of Landlord
               under the Lease, Tenant shall be bound to CMF Capital Company,
               LLC under all of the terms, covenants and conditions of the Lease
               for the balance of the term thereof remaining and any extension
               thereof duly exercised by Tenant with the same force and effect
               as if CMF Capital Company, LLC were the Landlord under the Lease;
               and Tenant does hereby attorn to CMF Capital Company, LLC, as its
               Landlord, said attornment to be effective and self-operative,
               without the execution of any further instruments on the part of
               any of the parties hereto, immediately upon CMF Capital Company,
               LLC's succeeding to the interest of Landlord under the Lease;
               provided, however, that Tenant shall be under no obligation to
               pay rent to CMF Capital Company, LLC until Tenant receives
               written notice from CMF Capital Company, LLC that CMF Capital
               Company, LLC has succeeded to the interest of the Landlord under
               the Lease or otherwise has the right to receive such rents.  The
               respective rights and obligations of Tenant and CMF Capital
               Company, LLC upon such attornment, to the extent of the then
               remaining balance of the term of the Lease, shall be and are the
               same as now set forth therein, it being the intention of the
               parties hereto for this purpose to incorporate the Lease in this
               agreement by reference, with the same force and effect as if set
               forth in full herein.

          12.  Tenant shall neither suffer nor itself manufacture, store,
               handle, transport, dispose of, spill, leak, dump any toxic or
               hazardous waste, waste product or substance (as they may be
               defined in any federal or state statute, rule or regulation
               pertaining to or governing such wastes, waste products or
               substances) on the Premises at any time during the term, or
               extended term, of the Lease.

          13.  The Tenant has no right or option to purchase all or any
               part of the Premises or the building of which the Premises is a
               part or to occupy any additional space at the related property.

          14.  The Tenant has not assigned the Lease or sublet all or any
               portion of the Premises, the Tenant does not hold the Premises
               under assignment or sublease, nor does anyone except Tenant and
               its employees occupy the Premises except
                                                       -----------------------.

          15.  To the best of Tenant's knowledge, no actions, whether
               voluntary or otherwise, are pending against the Tenant under the
               bankruptcy laws of the United States or any state and there are
               no claims or actions pending against the Tenant which if decided
               against the Tenant would materially and adversely affect the
               Tenant's financial condition or the Tenant's ability to perform
               the tenant's obligations under the Lease;

          16.  Tenant acknowledges that Landlord has assigned to Lender its
               right, title and interest in the Lease and to the rents due
               thereunder, and that Landlord will collect such rents provided no
               event of default has occurred under the Loan.  Tenant agrees to
               pay all rents and other amounts due under the Lease directly to
               Lender upon receipt of written demand by Lender, and Landlord
               hereby consents thereto.  The assignment of the Lease to Lender,
               or collection of rents by Lender pursuant to such assignment,
               shall not obligate Lender to perform Landlord's obligations under
               the Lease.

          17.  All notices and other communications from Tenant to CMF
               Capital Company, LLC shall be in writing and shall be delivered
               or mailed by registered mail, postage paid, return receipt
               requested, addressed to CMF Capital Company, LLC at:
          
                         General Electric Capital Corporation
                         209 West Jackson, 2nd Floor
                         Chicago, Illinois  60606
                         Attention: Nancy G. Tramulota, Operating Agent
                         Telecopy:  (203) 316-7410
          
          or at such other address as , any successor, purchaser
               or transferee shall furnish to Tenant in writing.
          
          1.   This Agreement shall inure to the benefit of and be binding
               upon the parties hereto, their successors and assigns.  This
               Agreement may be executed in several counterparts, and all so
               executed shall constitute one agreement, binding on all parties
               hereto, notwithstanding that all parties are not signatories to
               the original or the same counterpart.
          
          2.   This Estoppel Certificate and Agreement is being executed
               and delivered by Tenant (a) for the benefit of CMF Capital
               Company, LLC in connection with its loan to Landlord which is
               secured or to be secured in part by an assignment to CMF Capital
               Company, LLC of Landlord's interest in the Lease, and (b) with
               the intent and understanding that the above statements will be
               relied upon by GECC and constitute a binding agreement between
               the parties.
                          
                          
TENANT:                   
                          ------------------------------------------------
                          a
                           -----------------------------------------------
                             
                             By:
                                ------------------------------------------
                              Name:
                                   ---------------------------------------
                              Title:
                                    --------------------------------------
                          
CMF Capital Company,      CMF CAPITAL COMPANY, LLC
LLC:                      a Delaware limited liability company
                          
                             
                             By:
                                ------------------------------------------
                              Name:
                                    --------------------------------------
                              Title:
                                    --------------------------------------

                           SCHEDULE A
                           ----------
                                
                   LIST OF AMENDMENTS TO LEASE

                          SCHEDULE VIII
                          -------------
                                
                 SUBORDINATION, NON-DISTURBANCE,
                    AND ATTORNMENT AGREEMENT
          
          THIS AGREEMENT is made and entered into as of the
                                                            -----
day of                , 19  , by and between CMF Capital Company,
       ---------------    --
LLC,  a  Delaware  limited liability company  ("MORTGAGEE"),  and
                                      ,  a                       
--------------------------------------       --------------------
("LESSEE").
                                
                        R E C I T A L S:
          
          A.    Mortgagee  has  made  a loan  in  the  amount  of
$71,000,000  (the "LOAN") to Winston SPE LLC, a Virginia  limited
liability   company  ("BORROWER"),  secured  by  the   Borrower's
interest  in  the real property described in EXHIBIT A  attached
                                             ---------
hereto  and incorporated herein by reference (said real  property
and  improvements being herein called the "Project"),  such  Loan
being  secured by a [Mortgage/Deed of Trust/Deed to Secure  Debt]
and   Security   Agreement   dated                  1998   (the
                                     --------------
"MORTGAGE"),  constituting a lien or encumbrance on the  Project;
and
          
          B.    Lessee is the holder of a leasehold estate in and
to                of              of the Project,  consisting  of
    ------------      -----------
approximately         usable square feet of space  (the  "DEMISED
               -----
PREMISES"),  under  that  Lease  Agreement  (the  "LEASE")  dated
               ,  executed  by Borrower,  as  Landlord  (Borrower
---------------
being  sometimes  hereinafter called "LESSOR"),  and  Lessee,  as
Tenant; and
          
          C.    Lessee  and  Mortgagee desire  to  confirm  their
understandings with respect to the Lease and the Mortgage.
                                
                        A G R E M E N T:
          
          NOW,  THEREFORE, in consideration of the foregoing  and
the  mutual covenants and agreements herein contained, Lessee and
Mortgagee agree and covenant as follows:
          
          1.    Non-Disturbance.  Mortgagee agrees that  it  will
                ---------------
not  disturb  the possession of Lessee under the Lease  upon  any
judicial  or  non-judicial foreclosure of the  Mortgage  or  upon
acquiring title to the Project by deed-in-lieu of foreclosure, or
otherwise, if the Lease is in full force and effect and Lessee is
not  then  in  default under the Lease, and that  Mortgagee  will
accept  the attornment of Lessee thereafter so long as Lessee  is
not in default under the Lease.
          
          2.    Attornment.  If the interests of Lessor in and to
                ----------
the Demised Premises are owned by Mortgagee by reason of any deed-
in-lieu  of  foreclosure, judicial foreclosure, sale pursuant  to
any  power of sale or other proceedings brought by it or  by  any
other manner, including, but not limited to, Mortgagee's exercise
of  its  rights  under any assignment of leases  and  rents,  and
Mortgagee  succeeds to the interest of Lessor  under  the  Lease,
Lessee  shall  be  bound to Mortgagee under  all  of  the  terms,
covenants and conditions of the Lease for the balance of the term
thereof  remaining  and any extension thereof duly  exercised  by
Lessee  with the same force and effect as if Mortgagee  were  the
Lessor  under  the  Lease;  and  Lessee  does  hereby  attorn  to
Mortgagee,  as  its lessor, said attornment to be  effective  and
self-operative, without the execution of any further  instruments
on  the  part  of  any  of the parties hereto,  immediately  upon
Mortgagee's succeeding to the interest of Lessor under the Lease;
provided,  however, that Lessee shall be under no  obligation  to
pay  rent to Mortgagee until Lessee receives written notice  from
Mortgagee  that  Mortgagee has succeeded to the interest  of  the
Lessor under the Lease or otherwise has the right to receive such
rents.   The  respective  rights and obligations  of  Lessee  and
Mortgagee  upon  such  attornment, to  the  extent  of  the  then
remaining balance of the term of the Lease, shall be and are  the
same  as  now  set forth therein, it being the intention  of  the
parties hereto for this purpose to incorporate the Lease in  this
Agreement by reference, with the same force and effect as if  set
forth in full herein.
          
          3.     Mortgagee's  Obligations.   If  Mortgagee  shall
                 ------------------------
succeed  to  the  interest of Lessor under the Lease,  Mortgagee,
subject to the last sentence of this Paragraph 3, shall be  bound
to Lessee under all of the terms, covenants and conditions of the
Lease; provided, however, that Mortgagee shall not be:
               
               (a)   Liable for any act or omission of any  prior
          lessor (including Lessor); or
               
               (b)   Subject  to  the offsets or  defenses  which
          Lessee  might have against any prior lessor  (including
          Lessor); or
               
               (c)   Bound  by  any  rent or additional  rent  or
          advance rent which Lessee might have paid for more than
          the  current  month  to  any  prior  lessor  (including
          Lessor), and all such rent shall remain due and  owing,
          notwithstanding such advance payment; or
               
               (d)   Bound  by  any  security or  advance  rental
          deposit  made by Lessee which is not delivered or  paid
          over  to  Mortgagee and with respect  to  which  Lessee
          shall   look   solely   to   Lessor   for   refund   or
          reimbursement;
               
               (e)   Bound  by  any  termination,  amendment   or
          modification of the Lease made without its consent  and
          written approval;
               
               (f)   Liable  under any warranty  of  construction
          contained  in  the  Lease or any  implied  warranty  of
          construction; or
               
               (g)   Liable for the performance or completion  of
          any construction obligations under the Lease or for any
          loan   or   contribution  or  rent  concession  towards
          construction  of the Demised Premises pursuant  to  the
          Lease.

Neither  CMF  Capital Company, LLC nor any other party  who  from
time  to  time  shall be included in the definition of  Mortgagee
hereunder,  shall have any liability or responsibility  under  or
pursuant to the terms of this Agreement after it ceases to own an
interest  in  the  Project.  Nothing in this Agreement  shall  be
construed to require Mortgagee to see to the application  of  the
proceeds  of  the Loan, and Lessee's agreements set forth  herein
shall  not  be  impaired on account of any  modification  of  the
documents  evidencing and securing the Loan.  Lessee acknowledges
that  Mortgagee is obligated only to Borrower to  make  the  Loan
only  upon the terms and subject to the conditions set  forth  in
the  Loan Agreement between Mortgagee and Borrower pertaining  to
the  Loan.  In no event shall Mortgagee or any purchaser  of  the
Project  at foreclosure sale or any grantee of the Project  named
in   a   deed-in-lieu  of  foreclosure,  nor  any   heir,   legal
representative, successor, or assignee of Mortgagee or  any  such
purchaser or grantee (collectively the Mortgagee, such purchaser,
grantee,  heir, legal representative, successor or assignee,  the
"Subsequent  Landlord")  have  any  personal  liability  for  the
obligations  of Lessor under the Lease and should the  Subsequent
Landlord succeed to the interests of the Lessor under the  Lease,
Tenant  shall look only to the estate and property  of  any  such
Subsequent  Landlord  in  the Project  for  the  satisfaction  of
Tenant's  remedies  for the collection of a  judgment  (or  other
judicial process) requiring the payment of money in the event  of
any  default  by  any Subsequent Landlord as landlord  under  the
Lease, and no other property or assets of any Subsequent Landlord
shall   be  subject  to  levy,  execution  or  other  enforcement
procedure for the satisfaction of Tenant's remedies under or with
respect  to  the  Lease; provided, however, that the  Lessee  may
exercise any other right or remedy provided thereby or by law  in
the  event of any failure by Lessor to perform any such  material
obligation.
          
          4.   Subordination.  The Lease and all rights of Lessee
               -------------
thereunder are subject and subordinate to the lien and the  terms
of  the  Mortgage  and to any deeds of trust,  mortgages,  ground
leases  or  other instruments of security which  do  now  or  may
hereafter  cover  the Project or any interest of  Lessor  therein
(collectively,  the  "Prior Encumbrances") and  to  any  and  all
advances  made  on  the  security thereof  and  to  any  and  all
increases,  renewals, modifications, consolidations, replacements
and   extensions  of  the  Mortgage  or  of  any  of  the   Prior
Encumbrances.   This provision is acknowledged by  Lessee  to  be
self-operative  and no further instrument shall  be  required  to
effect  such subordination of the Lease.  Lessee shall,  however,
upon demand at any time or times execute, acknowledge and deliver
to  Mortgagee  any and all instruments and certificates  that  in
Mortgagee's  judgment may be necessary or proper  to  confirm  or
evidence such subordination.  If Lessee shall fail or neglect  to
execute,   acknowledge  and  deliver  any  such   instrument   or
certificate,  Mortgagee may, in addition to  any  other  remedies
Mortgagee  may  have,  as agent and attorney-in-fact  of  Lessee,
execute,  acknowledge  and deliver the  same  and  Lessee  hereby
irrevocably appoints Mortgagee as Lessee's agent and attorney-in-
fact  for  such purpose.  However, notwithstanding the generality
of the foregoing provisions of this paragraph, Lessee agrees that
Mortgagee  shall  have the right at any time to  subordinate  the
Mortgage,  and  any such other mortgagee or ground  lessor  shall
have  the  right  at  any  time  to subordinate  any  such  Prior
Encumbrances,  to  the Lease on such terms and  subject  to  such
conditions  as Mortgagee, or any such other mortgagee  or  ground
lessor, may deem appropriate in its discretion.
          
          5.    New  Lease.  Upon the written request  of  either
                ----------
Mortgagee  or  Lessee  to the other given  at  the  time  of  any
foreclosure,  trustee's sale or conveyance in lieu  thereof,  the
parties agree to execute a lease of the Demised Premises upon the
same terms and conditions as the Lease between Lessor and Lessee,
which  lease shall cover any unexpired term of the Lease existing
prior  to such foreclosure, trustee's sale or conveyance in  lieu
of foreclosure.
          
          6.    Notice.  Lessee agrees to give written notice  to
                ------
Mortgagee  of any default by Lessor or Borrower under  the  Lease
not less than thirty (30) days prior to terminating the Lease  or
exercising  any other right or remedy thereunder or  provided  by
law.  Lessee further agrees that it shall not terminate the Lease
or  exercise  any such right or remedy provided such  default  is
cured  within such thirty (30) days; provided, however,  that  if
such  default  cannot by its nature be cured within  thirty  (30)
days,  then Lessee shall not terminate the Lease or exercise  any
such  right  or  remedy, provided the curing of such  default  is
commenced   within  such  thirty  (30)  days  and  is  diligently
prosecuted  thereafter.   Such  notices  shall  be  delivered  by
certified mail, return receipt requested to:
         
                     General Electric Capital Corporation
                     209 West Jackson, 2nd Floor
                     Chicago, Illinois  60606
                     Attention: Nancy G. Tramulota, Operating Agent
                     Telecopy: (203) 316-7410
          
          7.    Mortgagee.  The term "Mortgagee" shall be  deemed
                ---------
to include CMF Capital Company, LLC and any of its successors and
assigns,  including anyone who shall have succeeded  to  Lessor's
interest in and to the Lease and the Project by, through or under
judicial foreclosure or sale under any power or other proceedings
brought  pursuant  to  the Mortgage, or  deed  in  lieu  of  such
foreclosure or proceedings, or otherwise.
          
          8.   Estoppel.  Lessee hereby certifies, represents and
               --------
warrants to Mortgagee that:
               
               (a)   That the Lease is a valid lease and in  full
          force and effect.  That there is no existing default in
          any  of  the terms and conditions thereof and no  event
          has  occurred which, with the passing of time or giving
          of  notice  or  both,  would  constitute  an  event  of
          default;
               
               (b)   That the Lease has not be amended, modified,
          supplemented,   extended,  renewed  or  assigned,   and
          represents the entire agreement of the parties;
               
               (c)  That, except as provided in the Lease, Lessee
          is entitled to no rent concessions or abatements;
               
               (d)   That  Lessee shall not pay rental under  the
          Lease  for more than one (1) month in advance.   Lessee
          agrees  that  Lessee  shall,  upon  written  notice  by
          Mortgagee, pay to Mortgagee, when due, all rental under
          the Lease;
               
               (e)  That all obligations and conditions under the
          Lease to be performed to date have been satisfied, free
          of defenses and set-offs; and
               
               (f)   That Lessee has not received written  notice
          of  any  claim, litigation or proceedings,  pending  or
          threatened,  against or relating  to  Lessee,  or  with
          respect to the Demised Premises which would affect  its
          performance  under the Lease.  Lessee has not  received
          written notice of any violations of any federal, state,
          county  or municipal statutes, laws, codes, ordinances,
          rules,   regulations,  orders,  decrees  or  directives
          relating  to  the  use  or  condition  of  the  Demised
          Premises or Lessee's operations thereon.
          
          9.    Modification and Successors.  This Agreement  may
                ---------------------------
not  be  modified  orally  or in any  manner  other  than  by  an
agreement,  in  writing, signed by the parties hereto  and  their
respective successors in interest.  This Agreement shall inure to
the  benefit  of  and be binding upon the parties  hereto,  their
successors and assigns.
          
          10.   Counterparts.  This Agreement may be executed  in
                ------------
several  counterparts, and all so executed shall  constitute  one
agreement,  binding  on all parties hereto, notwithstanding  that
all  parties  are  not signatories to the original  or  the  same
counterpart.
          
          IN  WITNESS  WHEREOF, the parties hereto have  executed
this Agreement as of the day and year first above written.

MORTGAGEE:               CMF CAPITAL COMPANY, LLC,
                          a Delaware limited liability company



                         By:
                             -------------------------------------
                              Name:
                              Title:




LESSEE:               
                        ---------------------------------------,
                             a 
                               --------------------



                         By:
                             -------------------------------------
                              Name:
                              Title:



STATE  OF
          ----------
COUNTY OF 
          ----------
          This  instrument  was acknowledged before  me  on  this
       day of                  , 19  , by                       ,
-----         -----------------    --     ----------------------
                      of                                   ,    a
------------------          -------------------------------
                           , on behalf of said corporation.
---------------------------

(SEAL)
                              Notary Public in and for
                              the State of           
                                           ----------
                              
                              
                              ---------------------------
                              Print name of notary
                              
                              My Commission Expires:
                                                     -------------






STATE OF 
         ----------
COUNTY OF
         ----------
          
          This  instrument  was acknowledged before  me  on  this
       day of                  , 19  , by                       ,
-----         -----------------    --     ----------------------
                   of                                     ,    a
--------------            --------------------------------
           , on behalf of said            .
-----------                    -----------
(SEAL)
                              Notary Public in and for
                              the State of 
                                           -----------
                              
                              -----------------------------------
                              Print name of notary
                              
                              My Commission Expires:
                                                    -------------


                           SCHEDULE IX
                           -----------
                                
                           LITIGATION
                                
                              None



                           SCHEDULE X
                           ----------
                                
               MANAGER'S CONSENT AND SUBORDINATION
                     OF MANAGEMENT AGREEMENT
                     -----------------------
                                
                                
          THIS  MANAGER'S CONSENT AND SUBORDINATION OF MANAGEMENT
AGREEMENT  (this  "AGREEMENT"), dated as  of                    ,
                                              -------------  ---
199  ,  made  by                         , a                 (the
   --             -----------------------     -------------
"MANAGER").

                                
                      W I T N E S S E T H :
                                
          WHEREAS,  _________________________________, a ________
[corporation/partnership] ("BORROWER"),  has  borrowed  from  CMF
Capital  Company, a Delaware limited liability company ("LENDER")
the  sum of $          ,  pursuant to that certain loan agreement
             ----------
dated  as of the date hereof between Borrower and Lender (as  the
same  may  hereafter be modified, amended, restated,  renewed  or
replaced, the "LOAN AGREEMENT").

          WHEREAS,  the  loan is evidenced by that certain  Note,
dated  the date hereof given by Borrower to Lender (as  the  same
may   hereafter  be  modified,  amended,  restated,  renewed   or
replaced,  the  "NOTE"), which Note is secured,  in  part,  by  a
Mortgage, Assignment of Leases and Rents, Security Agreement  and
Fixture  Filing,  dated as of the date hereof (as  the  same  may
hereafter  be  modified, amended, restated, renewed or  replaced,
the "MORTGAGE"), made by Borrower to Lender.  The Mortgage covers
Borrower's   interest   in   the  real   property   situated   in
               ,  as  more particularly  described  therein  (the
---------------
"PROPERTY").

          NOW,  THEREFORE,  for good and valuable  consideration,
the receipt and sufficiency of which are hereby acknowledged, and
in  order  to induce Lender to accept the Mortgage and the  other
Loan  Documents,  Manager hereby represents, warrants,  covenants
and agrees for the benefit of Lender as follows:

          1.    DEFINITIONS.  All capitalized terms not otherwise
                -----------
defined  herein shall have the meanings ascribed thereto  in  the
Loan Agreement.

          2.    MANAGER'S REPRESENTATIONS.  Manager warrants  and
                -------------------------
represents  to Lender, as of the date hereof, that the  following
are true and correct:

               (a)   Manager has agreed to act as manager of  the
Property  pursuant to the Management Agreement, dated           ,
                                                      ----------
199  , between Borrower and Manager (the "MANAGEMENT AGREEMENT").
   --
Attached hereto as Exhibit A is a true, correct and complete copy
                   ---------
of the Management Agreement.

               (b)   The  entire  agreement between  Manager  and
Borrower for the management of the Property is evidenced  by  the
Management Agreement.

               (c)   The  Management  Agreement  constitutes  the
valid and binding agreement of Manager, enforceable in accordance
with  its  terms, and Manager has full authority under all  state
and local laws and regulations, to perform all of its obligations
under the Management Agreement.

               (d)  Borrower is not in default in the performance
of  any of its obligations under the Management Agreement and all
payments  and  fees  required to be paid by Borrower  to  Manager
thereunder have been paid to the date hereof.

          3.    MANAGER'S AGREEMENTS.  Notwithstanding the  terms
                --------------------
of  the  Management  Agreement, Manager hereby  consents  to  and
covenants and agrees as follows:

               (a)    No  Termination  of  Management  Agreement.
                      ------------------------------------------
Manager  shall  not  terminate the Management  Agreement  without
first  obtaining  Lender's written consent.  Notwithstanding  the
foregoing,  Manager  shall  have  the  right  to  terminate   the
Management Agreement for default by Borrower with respect to non-
payment  of  the management fee due thereunder or  any  costs  of
operating   the  Property  in  accordance  with  the   Management
Agreement by giving Lender sixty (60) days' prior written  notice
of  such  termination.  In the event Lender (or  Borrower)  shall
cure  such  non-payment default in the aforesaid sixty  (60)  day
period,  then any termination notice related to such cause  shall
be of no further force or effect.

               (b)  Subordination of Management Agreement to Lien
                    ---------------------------------------------
of  Mortgage.   The Management Agreement and any and  all  liens,
------------
rights  and  interests (whether choate or inchoate and including,
without limitation, all mechanic's and materialmen's liens  under
applicable law) owed, claimed or held, by Manager in and  to  the
Property,  are  and  shall  be in all  respects  subordinate  and
inferior  to the liens and security interests created  or  to  be
created for the benefit of Lender, and securing the repayment  of
the  Note and the obligations under the Loan Agreement including,
without  limitation, those created under the  Mortgage  covering,
among  other  things, the Property, and filed or to be  filed  of
record  in  the  public records maintained for the  recording  of
mortgages in the jurisdiction where the Property is located,  and
all  renewals,  extensions, increases,  supplements,  amendments,
modifications or replacements thereof.

               (c)    Lender's  Right  to  Terminate.   Upon  the
                      ------------------------------
occurrence and continuance of an Event of Default, Manager shall,
at  the  request  of Lender, continue performance  on  behalf  of
Lender  of  all of Manager's obligations under the terms  of  the
Management  Agreement  with  respect to  the  Property,  provided
Lender  sends  to Manager the notice set forth in paragraph  3(g)
hereof and performs or causes to be performed the obligations  of
Borrower  to  Manager under the Management Agreement accruing  or
arising from and after, and with respect to the period commencing
upon,  the effective date of such notice.  Upon, or at  any  time
after  an Event of Default and continuance thereof, Lender  shall
have  the  right to terminate the Management Agreement by  giving
Manager   thirty  (30)  days'  prior  written  notice   of   such
termination,  in which event Manager shall resign as  manager  of
the  Property  effective upon the end of  such  thirty  (30)  day
period and Lender shall neither be bound nor obligated to perform
the  covenants  and obligations of Borrower under the  Management
Agreement.   Without limiting Manager's rights against  Borrower,
Manager  agrees not to look to Lender for payment of any  accrued
but  unpaid  management  fees relating to the  Property  accruing
prior  to the effective date of the notice set forth in paragraph
3(g)  hereof  or  those which may occur prior to  any  notice  of
termination  if such notice is prior to the notice set  forth  in
paragraph 3(g) hereof.

               (d)   No  Modification.  Without  the  consent  of
                     ----------------
Lender,   Manager  shall  not  amend  or  modify  the  Management
Agreement  in  any material respect or terminate  the  Management
Agreement.

               (e)   Further Assurances.  Manager further  agrees
                     ------------------
to  (i) execute such affidavits and certificates as Lender  shall
reasonably  require  to  further evidence the  agreements  herein
contained,  (ii)  on  request from Lender,  furnish  Lender  with
copies  of  such information as Borrower is entitled  to  receive
under the Management Agreement, and (iii) cooperate with Lender's
representative  in any inspection of all or any  portion  of  the
Property.   [Manager  hereby  acknowledges  that  some,  or  all,
permits,  licenses  and  authorizations necessary  for  the  use,
operation  and  maintenance of the Property (the  "Permits")  are
held  by  the Manager.  By executing this Agreement, the  Manager
(A)  agrees  that it is holding all such Permits by and  for  the
benefit  of  the Borrower and (B) hereby agrees that as  security
for  the repayment of the Debt by the Borrower in accordance with
the  Loan  Agreement, to the extent permitted by applicable  law,
the Manager hereby grants to Lender a security interest in and to
the  Permits.  Moreover, the Manager hereby agrees that, upon  an
Event  of Default, it will assign the Permits to Lender  if  such
Permits are assignable or otherwise continue to hold such Permits
for  the  benefit of Lender until such time as Lender can  obtain
such Permits in its own name or the name of a nominee.]

               (f)   Assignment  of  Leases and  Rents.   Manager
                     ---------------------------------
acknowledges that, as further security for the Note, Borrower has
executed  and  delivered to Lender an Assignment  of  Leases  and
Rents,  dated as of the date hereof (the "ASSIGNMENT"), assigning
to Lender, among other things, all of Borrower's right, title and
interest  in and to all of the leases now or hereafter  affecting
the Property.  Manager hereby agrees that upon receipt of written
notice  from Lender that an Event of Default has occurred and  is
continuing,  Manager shall thereafter deliver to the Lender,  for
application  in accordance with the terms and conditions  of  the
Assignment, all income and proceeds relating to the Property then
being  held  by  Manager, and all rents, security deposits  (upon
compliance  with any requirements of applicable law with  respect
thereto)  and other income and proceeds received from  and  after
the  date  thereof  from  any and all tenants  or  other  parties
occupying or using any portion of the Property.

               (g)   No  Joint Venture.  Lender has no obligation
                     -----------------
to  Manager with respect to the Loan Documents and Manager  shall
not  be a third party beneficiary with respect to any of Lender's
obligations  to  Borrower set forth in the Loan  Documents.   The
relationship  of Lender to Borrower, is one of a  creditor  to  a
debtor,  and  Lender  is  not  a joint  venturer  or  partner  of
Borrower.

               (h)    Lender   Not  Obligated  Under   Management
                      -------------------------------------------
Agreement.   Manager  further agrees that  nothing  herein  shall
---------
impose  upon Lender any obligation for payment or performance  in
favor of Manager, unless Lender notifies Manager in writing after
an  Event  of  Default under the Mortgage, that  (i)  Lender  has
elected   to   assert  Borrower's  rights  under  the  Management
Agreement   with  respect  to  the  Property  and   assumes   its
obligations thereunder and (ii) Lender agrees to pay Manager  the
sums due Manager with respect to the Property under the terms  of
the  Management  Agreement from and after the effective  date  of
Lender's notice to Manager.

               (i)    Lender's   Reliance   on   Representations.
                      ------------------------------------------
Manager has executed this Agreement in order to induce Lender  to
accept  the  Mortgage  and  the  Loan  Documents  and  with  full
knowledge  that  Lender  shall  rely  upon  the  representations,
warranties and agreements herein contained, and that but for this
instrument  and  the representations, warranties  and  agreements
therein contained, Lender would not take such actions.

               (j)   Governed by Loan Documents.  Manager  agrees
                     --------------------------
that  until  such  time as the Debt shall  be  paid  in  full  in
accordance  with  its  terms and those  of  the  Loan  Documents,
Manager  shall  comply  with  its  obligations  under  the   Cash
Management  Agreement  and otherwise observe  all  of  Borrower's
obligations  under  the  Loan  Documents  with  respect  to   the
operation,    management   and   leasing   of    the    Property,
notwithstanding anything contained in the Management Agreement to
the  contrary.  Manager confirms that it has received  copies  of
the  Mortgage,  the  Cash  Management Agreement  and  other  Loan
Documents and is fully familiar with the terms thereof.

               (k)    Successors  and  Assigns;   No   Transfers.
                      ------------------------------------------
Manager  understands that Lender intends to assign this Agreement
and  the  Note, the Mortgage, the Assignment and the  other  Loan
Documents.   Manager  agrees that this  Agreement  and  Manager's
obligations  hereunder  shall be binding  upon  Manager  and  its
successors and assigns and shall inure to the benefit  of  Lender
and its successors and assigns including, without limitation, any
parties to whom Lender's interest in the Note, the Loan Agreement
and  the  Mortgage are assigned.  No sale, transfer or assignment
of  any  interest  in  the  Manager shall  be  permitted  without
Lender's consent.

               (l)   Additional  Termination  Rights  of  Lender.
                     -------------------------------------------
[Insert  any other rights under the Loan Documents in  which  the
Lender  may  cause the termination of the Manager,  i.e.  manager
kick out clauses including Section 14.4 of the Loan Agreement.]

               (m)   Manager  Not  Entitled  to  Rents.   Manager
                     ---------------------------------
acknowledges and agrees that it is collecting and processing  the
Rents  solely  as the agent for the Borrower and Manager  has  no
right  to,  or title in, the Rents.  Notwithstanding anything  to
the   contrary   in   the  Management  Agreement,   the   Manager
acknowledges and agrees that the Rents are the sole  property  of
the  Borrower, encumbered by the lien of the Mortgage  and  other
Loan Documents in favor of Lender.  In any bankruptcy, insolvency
or  similar  proceeding  the Manager, or any  trustee  acting  on
behalf  of the Manager, waives any claim to the Rents other  than
as such Rents may be used to pay the fees and compensation of the
Manager  pursuant to the terms and conditions of  the  Management
Agreement.

          4.    BORROWER CONSENT.  Borrower has joined herein  to
                ----------------
evidence  its  consent  to  the terms, covenants  and  conditions
contained in this Agreement.

          5.    COUNTERPARTS.  This Agreement may be executed  in
                ------------
one  or  more  counterparts, each of which  shall  be  deemed  to
constitute  an  original, but all of which, when taken  together,
shall constitute one and the same instrument.

          6.    NOTICES.  Any notice required or permitted to  be
                -------
given  under this Agreement shall be in writing and either  shall
be  mailed  by  certified mail, postage prepaid,  return  receipt
requested,   or  sent  by  overnight  air  courier  service,   or
personally delivered to a representative of the receiving  party,
or  sent  by telecopy (provided an identical notice is also  sent
simultaneously  by mail, overnight courier, or personal  delivery
as   otherwise   provided  in  this   Section   6).    All   such
communications shall be mailed, sent or delivered,  addressed  to
the party for whom it is intended at its address set forth below.

          
          If to Borrower:
                         ----------------------------------------
                         
                         ----------------------------------------
                         
                         Telecopy: (   )    -          
                                    ---  --- ----------
          
          If to Lender:  CMF Capital Company, LLC
                         
                         ----------------------------------------
                         
                         ----------------------------------------
                         
                         Attention:
                                   ------------------------------
                                   CMBS Large Loan Program
                         Telecopy: (   )    -          
                                    ---  --- ----------

Any  communication so addressed and mailed shall be deemed to  be
given on the earliest of (a) when actually delivered, (b) on  the
first  Business Day after deposit with an overnight  air  courier
service,  or (c) on the third Business Day after deposit  in  the
United  States mail, postage prepaid, in each case to the address
of  the intended addressee, and any communication so delivered in
person  shall  be deemed to be given when receipted  for  by,  or
actually received by Lender or Borrower, as the case may be.   If
given  by  telecopy, a notice shall be deemed given and  received
when  the telecopy is transmitted to the party's telecopy  number
specified  above confirmation of complete receipt is received  by
the  transmitting party during normal business hours  or  on  the
next  Business Day if not confirmed during normal business hours.
Either  party may designate a change of address by written notice
to  the  other  by  giving at least ten (10) days  prior  written
notice of such change of address.
          IN WITNESS WHEREOF, the parties hereto have caused this
Agreement   to   be  duly  executed  by  their  duly   authorized
representatives, as of the day and year first above written.

                                   MANAGER:
                                   
                                   [                              ]
                                     -----------------------------
                                   
                                   By
                                     -----------------------------
                                    Name:
                                    Title:
                                    
                         
                         
                                   BORROWER:
                         
                                   [                              ]
                                     -----------------------------
                         
                         
                                   By
                                     -----------------------------
                                    Name:
                                    Title:


                                    
                            EXHIBIT A
                            ---------
                                
                      MANAGEMENT AGREEMENT
                                


                           SCHEDULE XI
                           -----------
                                
                      MANAGEMENT AGREEMENTS

1.   Amended and Restated Management Agreement between Winston
  Hospitality, Inc. and Interstate Management & Investment Corp, as
  Operator, dated November 11, 1996 for Comfort Inn - Charleston,
  North Carolina.

2.   Amended and Restated Management Agreement between Winston
  Hospitality, Inc. and Interstate Management & Investment Corp, as
  Operator, dated November 11, 1996 for Hampton Inn - Raleigh,
  North Carolina.

3.   Amended and Restated Management Agreement between Winston
  Hospitality, Inc. and Interstate Management & Investment Corp, as
  Operator, dated November 11, 1996 for Comfort Inn - Durham, North
  Carolina.

4.   Amended and Restated Management Agreement between Winston
  Hospitality, Inc. and Interstate Management & Investment Corp, as
  Operator, dated November 11, 1996 for Quality Inn - Charleston,
  North Carolina.

                          SCHEDULE XII
                          ------------
                                
                  MARRIOTT FRANCHISE AGREEMENTS

1.   Franchise Agreement between Marriott International, Inc. and
  Hotel II Inc., dated November 9, 1996 for Courtyard Marriott -
  Wilmington, North Carolina as subsequently assigned to Capstar
  Winston Company, L.L.C. on November 17, 1997.

2.   Franchise Agreement between Marriott International, Inc. and
  Capstar Winston Company, L.L.C., dated March 6, 1998 for
  Residence Inn - Phoenix, Arizona.

3.   Franchise Agreement between Marriott International, Inc. and
  White Lodging Services Corporation, dated January 10, 1992 for
  Courtyard Marriott - Ann Arbor, Michigan as subsequently assigned
  to Capstar Winston Company, L.L.C. on November 17, 1997.


                          SCHEDULE XIII
                          -------------
                                
                    MARRIOTT OWNER AGREEMENTS

1.   Courtyard by Marriott Owner Agreement among Marriott
  International, Inc., Winston Hospitality, Inc. and WINN Limited
  Partnership dated September 16, 1997 for Courtyard Marriott -
  Wilmington, North Carolina, as subsequently assigned to CapStar
  Winston Company, L.L.C. on November 17, 1997.
  
2.   Residence Inn by Marriott Owner Agreement among Marriott
  International, Inc., CapStar Winston Company, L.L.C. and WINN
  Limited Partnership dated March    , 1998 for Residence Inn -
                                  ---
  Phoenix, Arizona.
  
3.   Courtyard by Marriott Owner Agreement among Marriott
  International, Inc., Winston Hospitality, Inc. and WINN Limited
  Partnership dated September 30, 1997 for Courtyard Marriott - Ann
  Arbor, Michigan, as subsequently assigned to CapStar Winston
  Company, L.L.C. on November 17, 1997.